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Annual
Report
of the

FEDERAL
TRADE
COMMISSION
For the Fiscal Year Ended
June 30, 1955

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C., 20402 - Price 45 cents (paper cover)

Federal Trade Commission
JOHN W. GWYNNE, Chairman
LOWELL B. MASON
ROBERT T. SECREST
SIGURD ANDERSON
WILLIAM C. KERN
ROBERT M. PARRISH, Secretary
ALEX AKERMAN, JR., Executive Director

II

EXECUTIVE OFFICES OF THE FEDERAL TRADE COMMISSION
Pennsylvania Avenue at Sixth Street Northwest,
Washington 25, D. C.
Room 104, Federal Trade Commission Room 413, Masonic Temple Building, 333
Building, Washington 25, D. C.
St. Charles Street, New Orleans 12, La.
Room 2904, U. S. Courthouse, Foley Room 811, U. S. Courthouse, Seattle 4,
Square, New York 7, N. Y.
Wash.
Room 1310, 266 West Jackson Boulevard, Room 1128, Standard Building, 1370
Chicago 6, Ill.
Ontario Street, Cleveland 13, Ohio.
Room 133, Federal Office Building, Civic
Center, San Francisco 2, Calif.
Field Offices for Wool, Fur, and Flammable Fabrics
Room 2904, U. S. Courthouse, Foley Room 133, Federal Office Building, Civic
Square, New York 7, N. Y.
Center, San Francisco 2, Calif.
Room 401, U. S. Appraisers Stores Room 455, 1031 South Broadway, Los
Building, 408 Atlantic Avenue, Boston
Angeles 14, Calif.
10, Mass.
Room 1128, Standard Building, 1370
Room 1310, 226 West Jackson Boulevard,
Ontario Street, Cleveland 13, Ohio.
Chicago 6, Ill.
Room 3030-A, U. S. Courthouse, Ninth and
Room 1003-C, U. S. Court and Custom
Market Streets, Philadelphia, Pa.
House, 12th and Market Streets, St.
Louis 1, Mo.
Lullwater Building, 312 West Peachtree
Street, Atlanta, Ga
Room 1304, 1114 Commerce Street, Dallas
2, Tex.
III

Letter of Transmittal
FEDERAL TRADE COMMISSION,
Washington, D. C.
To the Congress of the United States:
It is a pleasure to transmit herewith the Forty-first Annual Report of the Federal Trade
Commission, covering its accomplishments during the fiscal year ended June 30, 1955.
By direction of the Commission.
JOHN W. GWYNNE,
Chairman.
THE PRESIDENT OF THE SENATE.
THE SPEAKER OF THE HOUSE OF REPRESENTATIVES

V

CONTENTS
Chapter
Page
1. The Year's Highlights - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1
2. Scope of Authority - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7
3. Administration - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 15
Progress Charts - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 19
4. Investigation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25
Major Investigations - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 26
Scientific Opinions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 28
Wool, Fur, and Flammable Fabrics - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 29
Accounting - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 30
5. Litigation. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 32
Merger Case Work - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 33
Robinson-Patman Act Cases - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 36
Pending Antimonopoly Cases - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 36
Antimonopoly Orders - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 38
Deceptive Practice Cases - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 40
6. Enforcement and Court Work - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 46
Appellate Work - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 47
Compliance - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 48
Division of Special Legal Assistants - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 51
Office of Export Trade - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 51
Antimonopoly Cases in Federal Courts - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 52
Deceptive Practice Cases in Federal Courts - - - - - - - - - - - - - - - - - - - - - - - - - - - 54
7. Economic Analysis and Reporting - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 57
Merger Report - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 58
Assistance in Litigation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 60
8. Cooperation with Industry - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 62
Trade, Practice Conferences - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 62
Administration of Trade Practice Rules - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 65
Stipulations - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 67
Small Business - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 70
9. Appropriations and Financial Obligations - - - - - - - - - - - - - - - - - - - - - - - - - - - - 71
10. APPENDIXES. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 73
FTC Commissioners (1915-55) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 73
Types on Unfair Methods and Practices - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 74
Statutes Pertaining to the FTC - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 80
General Investigations by the Commission Since 1915 - - - - - - - - - - - - - - - - - - 106
VII

Chapter One

THE YEAR'S HIGHLIGHTS

Fiscal 1955 brought to fruition the, new policies and planning of the previous 15 months.
It saw significant results of the Commission's reorganization.
While the most conspicuous actions were the launching of an investigation into the rising
trend of corporate mergers and an attack on misleading advertising of health and accident
insurance companies, the Commission's new vitality was evidenced in the performance of
all of its functions. At the year's end, sharp increases had been achieved in the number of
investigations undertaken and completed, more complaints and orders had been issued in
both antimonopoly and antideceptive cases than for the average of the previous 10 years, and
long and unprecedented strides had been taken in policing compliance with previous orders.
Perhaps even more important was the Commission's determination to serve more
effectively as a guide to business. By issuing opinions with each Commission order, the
Commission's casework achieved a prophylactic value far greater than the effect of the
restraints put on the particular firms involved. Supplementing this effort was the
Commission's broad program for achieving voluntary compliance with those laws designed
to insure fair competition in business. Here a 20-year high in the number of trade practice
rules issued by the Commission to guide industry was reached.
A significant development in the Commission's program to advise and assist business in
obtaining the full protection of the laws of fair competition was the creation of a Small
Business Division. Here for the first time in Commission history, small-business men could
avail themselves of help from attorneys most familiar with their problems and within an
organizational unit designed for that purpose. During the fiscal year, the Division received
1,021 requests for help, of which 971 were completed, the rest being in varying stages of
progress. In addition, more than 300 conferences were held.
The Commission's attack on delay in the handling of casework contributed importantly
to the Commission's overall effectiveness. The phrase: "Delay is the worst enemy of
administrative law," became virtually a slogan. It motivated an internal speedup embracing
1

not only the Commission itself but supervisors along the assembly line of case development.
The staff, aware that the Commission had disciplined itself against prolonged delay in acting
on cases, no longer could indulge in time-consuming and needless formality. For example,
fully half of the procedural steps in the progress of an investigation to the point of
recommendation for issuance of complaint were eliminated at no real cost in efficiency.
At the end of the fiscal year, each Bureau director summarized the effects of the speedup
of that portion of staff work under his supervision.
In the Bureau of Investigation, Director Harry A. Babcock reported an increase of almost
50 percent in the number of investigations completed. In the antimonopoly field alone, 537
investigations were completed as contrasted with 363 in 1953 and 343 in 1951. At the same
time, this Bureau referred 21 violations of the Wool Products Labeling Act and 18 violations
of the Fur Products Labeling Act to the Bureau of Litigation for formal action. In these 2
fields, more than 8,000 violations were adjusted by industry counseling, and voluntary
correction. During the same period, assurance of discontinuance of 281 deceptive practice
matters had been obtained. This number was described by Mr. Babcock as "far in excess of
any previous record."
In the Commission's litigation work, a marked increase in effective action against illegal
monopoly and deception in business was revealed in both complaints and orders issued. The
volume of these not only was greater than in fiscal 1954 but substantially exceeded the
average of the previous 10 years.
Joseph E. Sheehy, Director of the Bureau of Litigation, reported that the total of 36
antimonopoly complaints in fiscal 1955 was 28.6 percent higher than for the average of the
fiscal years from 1944 to 1953 and that 1955's 30 cease and desist orders showed a 40.2percent increase over the average for the same previous period. The total of 125 deceptive
practice complaints in 1955 compared with 92 in 1954 and was 49.3 percent higher than the
1944-53 average year. Deceptive practice orders totaled 82, 2 more than in 1954 and 9
percent higher than the 1944-53 average.
The litigation performance becomes more impressive when the significance of the actions
is considered as well as the volume. Five of the pending cases charged large corporations
with violating section 7 of the Clayton Act (the Antimerger Act). "Through this litigation,"
Mr. Sheehy declared, "the Commission is seeking to halt a growing trend in American
industry toward mergers of formerly competing corporations or other corporate acquisitions
with anticompetitive effects." The five cases are: the requisition by Farm Journal, Inc., of its
rival publication, "Better Farming," from the Curtis Publishing

Co.; the alleged monopolistic control by Union Bag and Paper Corp. Of its competitor, the
Hankins Container Co.; and alleged illegal mergers involving Pillsbury Mills, Inc., the
Nation's second largest flour miller; Crown Zellerbach Corp., one of the world's largest
manufacturers of pulp and paper; and Luria Brothers & Co., the largest scrap steel broker in
the country.
The principal action in the deceptive practice field during fiscal 1955 was the
Commission's nationwide investigation of the advertising of some 1,400 insurance companies
selling health, accident, and hospitalization policies. Twenty-eight complaints were brought,
charging false and misleading advertising of the coverage and benefits to purchasers of the
policies. Four of the complaints were against the four largest companies in the accident and
health insurance business: Mutual Benefit Health & Accident Assn. (Mutual of Omaha),
Bankers Life and Casualty Co. (The “White Cross Plan”), Reserve Life Insurance Co., and
United Insurance Co.
The principal areas of misrepresentation in the advertising of insurance by the 28
companies named in complaints were: (1) policy termination provisions, (2) extent of
coverage, (3) maximum dollar limits, (4) lifetime benefit payments, and (5) limitations on
loss traceable to conditions in existence at the time of policy issuance.
A total of 19 complaints charging violations of the Robinson-Patman Act were issued
during fiscal 1955, a total unsurpassed in the previous 5 years. In addition, 14 such orders
were issued.
Illustrative of the effort in this field was the Commission’s order to manufacturers of
automotive replacement parts selling on a nationwide scale to stop discriminating in price
between jobbers competing in the resale of these parts to garages, filing stations, and repair
shops dealing with the consuming public.
Also conspicuous in the Commission’s antimonopoly efforts we re its orders requiring
the New York Coffee and Sugar Exchange, Inc., to permit futures trading in all types of
coffee in general use in the United States, and requiring 20 manufacturers of metal raincarrying and drainage equipment to stop price-fixing activities. Another major antimonopoly
order was that requiring U. S. Steel, Inland Steel Co., Republic Steel Corp., Jones and
Laughlin Steel Corp., and Rheem Manufacturing Co. to abandon a price-fixing conspiracy
in the sale of steel drums. Still another significant order was that requiring Revlon Products
Corp., a leading manufacturer of cosmetics, to terminate exclusive-dealing contracts with
beauty supply jobbers after the arrangements were found to violate section 3 of the Clayton
Act.
At the year’s end, a group of major antitrust complaints were pending decision. Among
these was one charging conspiracy between American importers of twine and rope and the
Mexican manufacturers.
3

of these products for the purpose of fixing prices and regulating their importation. Among
the products was agricultural bailer and binder twine widely used by American farmers.
Another pending complaint challenged an alleged price-fixing combination in the Puget
Sound salmon-packing industry. Still another attacked alleged restraints on competition in
the food brokerage business by a national trade association and its 1,750 members.
Complaints also were issued against the multimillion dollar sportswear industry in
California alleging an unlawful combination in restraint of trade to produce a rigid price
structure enhancing prices to consumers, and against an alleged conspiracy of tobacco
warehousemen in Wilson, N. C., to preclude expansion of warehouse facilities in the world's
largest flue-cured tobacco market.
Progress was made in the trial of complaints charging eight major ice cream
manufacturers and their subsidiaries with competition unfair to small independent ice cream
producers. Also, exclusive-dealing arrangements were under attack by the Commission as
unlawfully restraining trade in the important liquefied petroleum gas industry, the outboard
motor industry, the hearing aid industry, and the growing business in industrial wiping cloths.
In addition, the Commission maintained steady pressure against misrepresentations
injurious to the health or pocketbook of the American consumer. Several cases involved
widely advertised vitamin and mineral preparations, kidney pills, and preparations for the
hair and scalp, including products making the age-old claim of cure for baldness. False
advertising in the mail order sale of eyeglasses was involved in 2 cases, and the advertising
of oleomargarine as a dairy product brought 1 complaint and 2 cease and desist orders.
In the field of wearing apparel and fabrics, 20 complaints and 18 orders were issued in
the enforcement of the Wool Products Labeling Act, and 14 complaints and 8 orders were
issued to safeguard the public against the misbranding and false advertising of furs and fur
products.
Also, in the field of wearing apparel, six complaints were issued against the sale of
certain Japanese-made silk scarves too flammable to meet tile standards of the Flammable
Fabrics Act. In preventing their sale, the first seizure-condemnation under the Act was
prosecuted successfully, and 90,000 such scarves were condemned as too dangerous.
Supplementing the Commission's broad-scale efforts to improve competitive conditions
by means of formal actions were its programs to foster voluntary compliance with the law.
Charles E. Grandey, Director of the Bureau of Consultation, was able to report that tradepractice rules had been promulgated for 13 industries, more than double the number for
which rules had been issued in fiscal 1904. In addition, the Bureau had negotiated 60 per4

cent more stipulations in which firms and individuals agreed to stop improper business
activities, usually false or misleading advertising. As a result of this speedup in its work, the
Bureau had no stipulation pending that had been in negotiation more than 4 months.
Coupled with the obtaining of new stipulations, a systematic check of some 8,500 existing
stipulations was undertaken. By the end of the fiscal year, the still continuing check had
disclosed 60 violations against which corrective measures were begun.
Of far wider scope, however, was the Commission's full-scale effort to check and insure
compliance with all outstanding orders. This obligation was one which too often in previous
years had been neglected under pressure of more immediate responsibilities. However,
because an unenforced cease and desist order means that the Commission's legal proceedings
have failed their purpose, a major effort was made to bulwark the agency's previous actions.
As a result, a record number of civil penalty suits for violations of FTC cease and desist
order was begun during fiscal 1955, and at the year's end, 26 suits either were pending in
Federal courts or were in the drafting stayed at the Commission. This total contrasts sharply
with the total of 21 civil penalty suits brought in the preceding 8 years.
Under the supervision of General Counsel Earl W. Kintner, the Commission commenced
the first systematic compliance survey of old Commission orders in the Commission's
history. By the year's end, more than 1,200 of 4,600 old orders had been reviewed, and a
separate review of 171 pre-1947 Robinson-Patman Act orders was well underway. These
compliance reviews resulted in the submission of 469 supplementary reports of compliance
and the initiation of 118 compliance investigations. Substantial number of these were
expected to result in formal enforcement proceedings during 1956-57.
During fiscal 1955, an innovation in compliance work was the appointment of a 4-man
advertising "task force" to examine the national and regional advertising of businesses
subject to Commission orders, rules, and stipulations. It was believed that by appointing
qualified attorneys on this "task force" rather than personnel without legal training wasted
effort in selecting material could be avoided.
Not only in casework but in the broad field of economic investigation was achievement
recorded during the fiscal year. Here the major accomplishment was the report on "Recent
Corporate Mergers and Acquisitions,” a comprehensive analysis of merger trends, types,
causes, and dimensions. It revealed that such mergers had increased to 3 times the 1949 rate
and that nearly two-thirds of the acquisitions were made by companies with assets of $10
million or more. Purpose of the report was to provide Congress, the Department of Justice
and the FTC with facts needed to determine what corrective action should be
5

taken. Issuance of the report was a first major step in the Commission’s continuing concern
with the problem of corporate mergers.
At the, close of the fiscal year, the Bureau of Economics also was engaged in a report on
"Corporate Industry Patterns of Production." This study compares various classes of
companies as to overall scale of manufacturing, product structures, and the extent to which
their operations are scattered through many plants or concentrated in a few.
Also, a comprehensive study of the positions of the 1,000 largest manufacturing
companies in the Nation was nearing completion. The companies were being measured in
terms of total shipments, proportion of national output of the particular industries
represented, and diversity or dispersion of their manufacturing activities.
While the Commission's bureaus and divisions were thus engaged in an effort to speed
action on casework while maintaining an aggressive interest in broad economic problems,
the Commission's Hearing Examiners likewise stepped up their activity. Everett F. Haycraft,
director of hearing examiners, reported the examiners had disposed of 124 cases in 611 days
of hearings during the fiscal year. In 1954, the sane staff had disposed of only 94 cases in 325
days of hearings. This improvement can be attributed to the increased authority given hearing
examiners. This derived principally from consent order rule changes which authorized
bearing examiners to accept or reject stipulations contain-in" proposed consent orders with
acceptance subject to Commission review and rejection subject to appeal to the
Commission). Thus, with many costly and time-consuming hearings eliminated, a greater
number of consent orders could be expected, and this proved to be the case. In fiscal 1955,
76 cases were so disclosed of, as compared to only 36 the previous year.
6

Chapter Two

SCOPE OF AUTHORITY
Basic Functions of the FTC

The Federal Trade Commission is composed of five Commissioners appointed by tile
President and confirmed by the Senate, of whom no more than three may be of the same
political party. The Commission is charged with the responsibility for administering and
enforcing laws in the field of antitrust and trade regulation. They deal with prevention of
monopoly, restraints of trade, and unfair trade practices. The Commission also has the duty
of investigating and reporting economic problems and corporate activity, particularly in
relation to the antitrust laws and in aid of legislation. A primary purpose of the laws which
the Commission administers is to protect competition in our private enterprise economy.
These statutes are briefly described below.
The Federal Trade Commission Act of 1914 including the Wheeler Lea Act Amendments of
1938
This legislation confers upon the Commission two broad functions. Under the first, the
Commission, subject to certain exceptions, is "empowered and directed to prevent persons,
partnerships, or corporations,1 * * * from using unfair methods of competition in commerce
and unfair or deceptive acts or practices in commerce," which are declared by the statute to
be unlawful. The Commission is given power to investigate, to hear cases and to make
determination of practices falling within this proscription.
Whenever deemed necessary in the public interest to resort to mandatory proceedings, the
Commission is authorized to issue complaints against persons, partnerships, or corporations
within its jurisdiction which it has reason to believe have been or are using any such unlawful
methods, acts, or practices in commerce. If, upon due processing and
____________
1

Excepted from the Jurisdiction of the Commission under such section are "banks, common carriers subject to the
acts to regulate commerce, air carriers and foreign air carriers subject to the Civil Aeronautics Administration Act of
1938, and persons, partnerships, or corporations subject to the Packers and Stockyards Act, 1921, except as provided
in section 406 (b) of said act. * * *” Specific exemption from such provision against unfair methods of competition and
unfair or deceptive acts or practices in commerce is provided for resale price maintenance contracts or agreements
coming within the Federal Fair Trade Act approved July 14, 1952 (15 U. S. C. 47), also known as the McGuire Act.

7

hearing, the Commission finds that the practices in question violate the act, it is empowered
to issue a cease and desist order against the offending party or parties. Such an order may be
appealed from the Commission to a United States court of appeals, which is authorized to
review the proceeding and to affirm, enforce, modify, or set aside the Commission's order.
Thereafter, the case may be taken to the Supreme Court of the United States upon writ of
certiorari.
Originally, the cease and desist orders issued under the Federal Trade Commission Act
were enforceable only by the appellate court through contempt proceedings, after its action
had transformed the order into a decree of the court. The 1938 Wheeler-Lea amendments
provided for a civil penalty action in the United States district court for violation of such final
cease-and-desist orders. Under this provision the orders become final either through
affirmance by the Court of Appeals or at the end of 60 days in the event no appeal is taken.
If the order is violated after becoming final, a civil penalty suit may be instituted by the
United States. Such an action is brought by the Attorney General at the request of the
Commission, and the district court is authorized to impose civil penalties up to $5,000 for
each offense. Under an amendment enacted in 1950, each day of a continuing violation may
be treated as a separate offense.2
The Wheeler-Lea Act amendments also conferred special authority upon the Commission
for the control of false advertising of foods, drugs, cosmetics and curative or corrective
devices. For such purposes the term "false, advertisement'' is defined to mean "an
advertisement, other than labeling, which is misleading in a material respect;3 * * *." The
term also is employed in section 4 of the Oleomargarine Act to any representations or
suggestions that oleomargarine is a dairy product. In cases of this type, jurisdiction of the
Commission may be grounded in use of the United States mails as well as interstate
commerce. When necessary for protection of the public interest, the Commission is
authorized to obtain temporary injunctions against the false advertising of foods, drugs,
cosmetics or curative devices, pending completion of the cease and desist order proceedings.
Where the commodity advertised is injurious to health or where the advertising is with intent
to defraud or mislead, criminal prosecution may also be kind with maximum penalties of a
$5,000 fine and 6 months' imprisonment, or double this fine and imprisonment in case of
second offenses. The Commission is authorized to certify the facts to the Attorney General
for prosecution whenever it has reason to believe any person, partnership or corporation is
liable under the criminal provision.
______________
1

8

Amendment contained in the Oleomargarine Act (64 Stat. 20)

2

Sec. 15, Federal Trade Commission Act.

The second broad category of functions conferred upon the Commission under the
Federal Trade Commission Act consists of the powers conferred by section 6. This section
empowers the Commission to gather and compile information concerning, and to investigate
from time to time, "the organization, business, conduct, practices, and management of any
corporation engaged in commerce, except banks and common carriers subject to the Act to
regulate commerce, and its relation to other corporations and to individuals, associations, and
partnerships.'' The Commission also is empowered to require such corporations to furnish
information and to file annual and special repots. When directed by the President or
Congress, the Commission is authorized to investigate and report facts relating to any alleged
violations of the antitrust acts by corporations; to investigate for the Attorney General, or on
the Commission's own initiative, the manner in which antitrust decrees against corporations
are being carried out; and further, upon application of the Attorney General, to recommend
readjustments of the business of corporations alleged to be in violation of the antitrust acts
in order to bring the conduct of such business into accord with the requirements of law.
The Commission is further empowered to investigate from time to time trade conditions
in and with foreign countries where associations, combinations, or practices of
manufacturers, merchants, or traders, or other conditions, may affect the foreign trade of the
United States and to make reports thereon to Congress with recommendations. Under those
section 6 powers of investigation and reporting, the Commission serves the executive and
legislative branches of the Government, particularly in antitrust problems and in aid of
legislation.
Section 7 confers authority upon the Commission to act as a master in chancery upon
reference from the court to ascertain and report an appropriate form of antitrust decree in
equity suits brought by or at the direction of the Attorney General.
The act confers visitorial powers upon the Commission, including specifically the right
of access to documentary evidence of corporations, the right to issue subpenas, examine
witnesses, and require the production of testimony and documentary evidence, and the power
to make rules and regulations to carry out provisions of the act.
The Clayton Act4
This antitrust law was enacted in 1914. It designates the Federal Trade Commission as
an enforcing agency for the provisions of sections 2, 3, 7, and 8. Procedures are prescribed
in section 11 by which, upon complaint and due hearing, corrective action may be applied
by the Commission in the form of a cease and desist order or, in merger cases, an order of
divestiture.
____________
4

Approved October 15, 1914 (38 Stat. 730).

382867—56——2
9

Section 2 of the Clayton Act, amended by the Robinson-Patman Act—Discriminatory
Pricing.5—Subject to specified justification and defenses, this section provides that it shall
be illegal to discriminate in price between different purchasers of commodities of like grade
and quality sold for use, consumption, or resale within the United States, where the effect of
the discrimination "may be substantially to lessen competition or tend to create' a monopoly
in any line of commerce, or to injure, destroy, or prevent competition with any person who
either grants or knowingly receives the benefits of such discrimination, or with customers of
either of them."
Exception is provided for differentials which made only due allowance for differences
in cost of manufacture, sale, or delivery resulting from the differing methods or quantities
in which the commodities are sold or delivered. Selection of customers in bona fide
transactions and not in restraint of trade are not prohibited. The section, as amended, also
specifies exceptions respecting sales necessitated by market conditions, disposition on
account of deterioration of perishable goods; obsolescence of seasonal goods; distress sales
under court process, or sales in good faith in discontinuance of business in the goods
concerned. A defense to a charge of discrimination is also specified in regard to sales "made
in good faith to meet an equally low price of a competitor, or the services or facilities
furnished by a competitor."
Quantity-Limit Provision.—This is also contained in section 2 of the amended Clayton
Act. It confers authority upon the Commission, after due investigation and hearing of all
interested parties, to fix and establish quantity limits as to particular commodities or classes
of commodities "where it finds that available purchasers in greater quantities are so few as
to render differentials on account thereof unjustly discriminatory or promotive of monopoly
in any line of commerce."
Brokerages, Commissions, Proportionally Unequal Terms or Facilities.—The RobinsonPatman Act also forbids the payment of certain brokerages and commissions except for
services rendered to the party making the payment, as well as forbidding the payment by
manufacturers or sellers for, or the furnishing of, services or facilities to dealers or resellers
in connection with the processing, handling, sale, or ordering for sale of the products or
commodities sold, unless such payments or the services or facilities furnished are made
available to all competing customers on proportionally equal terms.
Inducement of Discrimination.—Another provision of the Robinson-Patman Act makes
it unlawful for any person in the course of commerce "knowingly to induce or receive" an
illegally discriminatory price.
_____________
5

10

Approved June 19,1936 (49 Stat. 1526).

Tying or Exclusive Dealing Contracts.—Section 3 of the Clayton Act prohibits the lease
or sale in the course of commerce of goods, wares, merchandise, machinery, supplies or other
commodities, for use, consumption or resale within the jurisdiction of the United States on
the condition, agreement or understanding that the lessee or purchaser shall not use or deal
in the goods, wares, merchandise, machinery, supplies, or other commodities of competitors
of the lessor or seller, where the effect thereof "may be to substantially lessen competition
or tend to create a monopoly in any line of commerce."
Anti-Merger Law.—This statute, approved December 29, 1950,6 is in the form of a
revision and restatement of section of the original Clayton Act. It is specific legislation on
the subject of suppression of competition through the merger or consolidation of
corporations. Such conduct is prohibited, whether brought about by the direct or indirect
acquisition of either stock or assets of the acquired corporation, where the effect of the
acquisition or merger may be substantially to lessen competition or tend to create a monopoly
in any line of commerce in any section of the country. Certain exceptions are provided,
including cases in which the stock is purchased solely for investment and not used for voting
or otherwise to bring about or attempt to bring about the substantial lessening of competition.
The Commission is designated as having enforcement responsibility applicable to
commercial enterprises generally but not including specific businesses which are under the
regulatory authority of other agencies, such as banks and common carriers.
Interlocking of Corporate Directorates.—Section 8 of the Clayton Act prohibits a person
from serving at the same time as a director of two or more corporations, any one of which
has capital, surplus, or undivided profits aggregating more than $1,000,000, when such
corporations are or have been competitors under the conditions prescribed, so that the
elimination of competition would constitute a violation of any provisions of the antitrust
laws.
Specifically excluded from the jurisdiction of the Federal Trade Commission under this
as well as other sections of the Clayton Act are certain types of commercial enterprises
subject to other regulatory authority, such as common carriers, air carriers, banks, banking
associations and trust companies.
The Webb-Pomerene Export Trade Act of 19187
This law authorizes limited cooperative activity among American exporters for the
purpose of promoting export trade. Associations engaged solely in export trade are afforded
exemption from the Sherman Act within certain strict boundaries set out in the act. To qualify
____________
6

64 Stat. 1125.

7

40 Stat. 516.

11

for such exemption, an association must file with the Commission copies of its association
papers or articles of incorporation and a complete description of its organizational structure,
and bring this information up to date yearly. The Commission may require submission of
additional information relating to the association's business activities at any time. A
continuing surveillance of association activities is maintained by the Commission's Division
of Export Trade.
Whenever the Commission concludes that an association is not operating within the limits
of the antitrust exemption provided by the act, it may make recommendations to the
association for readjustment of its practices. Upon failure of an association to comply with
such recommendations, the Commission will refer the matter to the Attorney General for
appropriate action.
The act also extends the prohibitions of the Federal Trade Commission Act to unfair
methods of competition used in export trade against export competitors even though the acts
are done outside the territorial jurisdiction of the United States.
Wool Products Labeling Act and Fur Products Labeling Act8
These laws constitute specific labeling legislation for maintaining the integrity of
competition and protection of the buying public against confusion and deception.
Violations are classed as unfair methods of competition and unfair or deceptive acts or
practices, within the Federal Trade Commission Act. Informative labeling of wool products
and fur products is required. Labels on wool products are required to reveal the respective
percentages of "wool," "reprocessed wool," "reused wool" and other constituents of wearing
apparel and other articles containing or purporting to contain woolen fiber in whole or in
part. Labels on fur products, as well as the advertising and invoicing, are required to disclose
to purchasers the true name of the animal from which the fur came. For this purpose, an
official Fur Products Name Guide has been prepared by the Commission. Other significant
information also is required to be disclosed in the label informing the purchaser whether the
fur article is dyed, bleached, damaged, secondhand, or pieced. The country of origin of
foreign furs must likewise be disclosed.
The Commission is specifically authorized to inspect and make tests of the merchandise
covered, and to issue rules and regulations which have the force and effect of law. Then
necessary in the public interest, the Commission may resort to court proceedings for con_____________
8

12

Approved, respectively, October 14, 1940, 54 Stat. 1128, and August 8, 1951, 65 Stat. 175.

demnation of goods seized as violative, and may apply tor temporary injunctions pending
completion of cease-and-desist order proceedings against alleged offenders. Suits to collect
civil penalties for violation of the Commission's final orders are also available in cases under
these acts. For willful violations, misdemeanor prosecutions may be brought by the United
States, and fines of up to $5,000 or 1 year's imprisonment, or both, imposed by the court.
Manufacturers and distributors may issue guaranties of having properly labeled their
merchandise. Members of the trade may use such guaranties as a defense to charges of
misbranding where the particular guaranty in question was relied upon in good faith. Forms
of guaranties are prescribed by the Commission.
Flammable Fabrics Act, approved June 30, 1953, effective July 1, 19549
The purpose of this statute is to afford the public protection from wearing apparel made
of fabrics which are so highly flammable as to be dangerous. Ir the past, such fabrics have
brought death or severe injury to many people.
A flammability test method is prescribed and apparel or fabrics which fail the tests are
considered dangerously inflammable. It is forbidden by statute to introduce or place such
merchandise on the market. In its administration of this act, the Federal Trade Commission
is authorized to issue rules and regulations, to conduct tests, and to make investigations and
inspections. The Commission is authorized to use its power under the Federal Trade
Commission Act, including the cease-and-desist order process, in carrying out its
responsibilities for enforcing the act. Offending goods found in the market may be seized
and condemned through district court action brought by the Commission. Pending
completion of proceedings for issuance of a cease-and-desist order against an alleged
violator, the Commission may apply to the court for temporary injunction. Suits for violation
of a final cease-and-desist order may be brought to recover civil penalties up to $5,000 for
each offense.
Manufacturers and distributors may guarantee their merchandise as having passed
reasonable and representative tests for flammability. Members of the trade who rely in good
faith upon these guaranties are afforded certain protection against prosecution. Willful
violations of the act, whether in placing prohibited products on the market or in issuing a
false guaranty, may be prosecuted by the Government as misdemeanors. Upon conviction,
fines up to $5,000 or 1 year's imprisonment, or both, may be imposed by the court.
___________
9

67 Stat 111.

13

Regulation of Insurance Public Law 15, 79th Congress
This act was passed by Congress after the Supreme Court had ruled that the insurance
business is subject to Federal jurisdiction under the commerce cause of the Constitution.
Under this statute, the Federal Trade Commission and the Clayton lets apply to the
business of insurance to the extent that it is not regulated by State law.
Lanham Trade Mark Act, approved July 5,194612
This authorizes the Commission to proceed before the Patent Office for cancellation of
certain trade-marks improperly registered or improperly used in competition, as provided in
section 14 of this act.
Defense Production Act of 195013 and Small Business Act of 195314
The former statute authorizes the Commission to make surveys at the request of the
Attorney General to determine any factors which my tend to eliminate competition, create
or strengthen monopolies, injure small business, or otherwise promote undue concentration
of economic power in the course of administration of the Defense Production Act of 1950.
The Chairman of the Commission, as provided in section 708, also is consulted regarding
voluntary industry agreements and programs which the President is authorized to utilize to
further the objectives of the act. Similar consultative responsibilities rest upon the Chairman
of the Commission under section 217 of the Small Business Act. After agreements and
programs have been subjected to this consultative review and have received official sanction,
those participating are afforded immunity from the antitrust laws and the Federal Trade
Commission Act.
_____________
10

Approved March 9, 1945, 59 Stat. 33. Effective June 30, 1948, see amendment approved July 25, 1947, 61 Stat.

11

United States v. Southeastern Underwriters Association, 332 U. S. 533, June 5, 1944.

12

60 Stat. 427.

448.

13

14

64 Stat. 798.

14

67 Stat. 232.

Chapter Three

ADMINISTRATION

The effectiveness of the Commission during fiscal 1955 depended vitally on the
organization and competence of its staff. The number and to great extent tho scope of the
Commission's actions were determined by the volume and quality of staff work on
investigations, litigation, and economic analyses. Only from this material could the five
Commissioners fashion the decisions that would stop improper business practices and erect
guideposts to fair competition.
The year marked the first 12 months of operation of the staff reorganization put into
effect by Commission Chairman Edward F. Howrey after approval by the Commission. This
reorganization based on an independent management survey, set up functional lines of
authority. It represented, Mr. Howrey said, "a major change in both concept and structure
* * * enabling the Commission to fulfill its responsibilities with greater dispatch and at less
cost."
The reorganization had placed all investigative activities in a newly formed Bureau of
Investigation, all trial work in a new Bureau of Litigation, and voluntary compliance
procedures in a new Bureau of Consultation. These new bureaus, together with a modified
Bureau of Economics, were placed under the operational supervision of Alex. Akerman, Jr.,
FTC's Executive Director.
Directors of the new bureaus were: Harry A. Babcock, Investigation; Joseph S. Sheehy,
Litigation; and Charles E. Grandey, Consultation. Continuing previous positions under the
new organization were: David C. Murchison, Legal Adviser and Special Assistant to the
Chairman; Earl W. Kintner, General Counsel; Edward F. Haycraft, Director of Hearing
Examiners; and Jesse W. Markham, Acting Director, Bureau of Economics. (See chart 1.)
Under the previous organization, investigation and trial work had been apportioned,
according to the nature of tile case, between the Bureau of Antimonopoly and the Bureau of
Antideceptive Practices. In making the change, Chairman Howrey declared the Commission
should no longer "enjoy the luxury" of two separate trial and investigative staffs. He also
emphasized his belief that the new organization would achieve greater speed by the staff in
its development of cases for Commission action.
15

The principal objectives sought in the new organization were: (1) simplification of the
form of organization, (2) grouping of related functions for most effective administration, (3)
provision for clear-cut centers of responsibility and control, (4) development of the best use
of manpower, and (5) strengthening of various segments of the organization in accordance
with present and probable future needs as dictated by the estimated workload.
The executive director not only served as general manager in coordinating the work of
the star, but he also functioned for the chairman in administrative matters concerning the
general counsel, Secretary, and the Commission's hearing examiners.
The reorganization set up control procedures and provided for close supervision of field
office investigative work. At the same time, improved supervision of casework was assured
by the appointment of project attorneys in the Bureau of Investigation to supervise cases
throughout the Commission's consideration of them. Previously, responsibility for a case had
been reassigned at various stages of its development, with no single attorney continuously
accountable for its progress.
Supplementing this speedup device was a system of time reports for all professional
employees. The system called for recording of the total hours devoted to each case and to
each step in its development. This enabled the Commission and top officials to recognize
quickly where delays were occurring so that corrective action could be taken. further aid to
the general speedup was the elimination of time-consuming and unnecessary reviews of
casework; about half of the former procedural steps were eliminated as needless.
In the field, a new office was established at Cleveland, Ohio, to bring the total to seven.
Others continued to operate at Washington, New York, Chicago, New Orleans, San
Francisco, and Seattle.
As a result of this streamlining throughout the agency, improvements were noted both in
volume and in speed. Investigations pending in branch offices per attorney-investigator rose
to 8.28, nearly double the 4.42 recorded during fiscal 1954. Investigations completed during
the year jumped from a 15.42 average per attorney-investigator in 1954 to 18.13 in 1955.
(See chart 2.)
Antimonopoly investigations pending in branch offices also reflected the speedup. In
fiscal 1954, a total of 16 percent of these investigations had been pending 18 months or more.
In fiscal 1955, the backlog of these older cases had been reduced to just 3 percent of the total.
(See chart 3.) Even more revealing was the age of antimonopoly cases pending in litigation.
In 1954, 52 percent had been in litigation more than 2 years. In 1955, the proportion was cut
to 38 percent. (See chart 4.) In the antideceptive field, the

16

percentage of cases over 2 years old dropped from 19 percent in 1954 to 8 percent in 1954.
(See chart 5.)
The same streamlining produced the issuance of more antimonopoly complaints, 36 in
1955 contrasted to 30 in 1954 (chart 6), and more deceptive practice complaints, 125 in 1955
compared to 93 in 1954. (See chart 7.)
The 5-man Commission itself strove for speedier action with the result that at the year's
end, Commission Secretary Robert M. Parrish reported that not a single formal briefed and
argued case had been awaiting decision by the Commission for more than 30 days. As to
informal matters in which complaints had been recommended, he reported an identical
situation.
17

FEDERAL TRADE COMMISSION
ORGANIZATION OF STAFF FUNCTIONS
ORGANIZATIONAL CHART - SEE IMAGE
18

INVESTIGATIONS PENDING IN
BRANCH OFFICES
PER ATTORNEY- INVESTIGATOR
AT CLOSE OF FISCAL YEAR

INVESTIGATIONS COMPLETED
DURING FISCAL YEAR IN
BRANCH OFFICES
PER ATTORNEY- INVESTIGATOR

GRAPH - SEE IMAGE

GRAPH - SEE IMAGE

19

ANTIMONOPOLY INVESTIGATIONS PENDING IN BRANCH OFFICES
(AGE IS FROM DATE OF RECEIPT IN BRANCH OFFICE)

156 Investigations
Pending June 30, 1953

171 Investigations
Pending May 31, 1954

264 Investigations
Pending June 30, 1955

GRAPH - SEE IMAGE

GRAPH - SEE IMAGE

GRAPH - SEE IMAGE

20

AGE OF ANTIMONOPOLY CASES PENDING IN LITIGATION AS OF JUNE 30
FISCAL YEARS 1952, 1953, 1954, 1955
(AGE IS FROM DATE OF ISSUANCE OF COMPLAINT)

1952
85 Cases
GRAPH SEE IMAGE

1953
75 Cases
GRAPH SEE IMAGE

1954
71 Cases
GRAPH SEE IMAGE

1955
70 Cases
GRAPH SEE IMAGE

21

AGE OF ANTIDECEPTIVE CASES PENDING IN LITIGATION AS OF JUNE 30
FISCAL YEARS 1952, 1953, 1954, 1955
(AGE IS FROM DATE OF ISSUANCE OF COMPLAINT)

1952
127 Cases
GRAPH SEE IMAGE

22

1953
89 Cases
GRAPH - SEE
IMAGE

1954
89 Cases
GRAPH - SEE
IMAGE

1955
127 Cases
GRAPH - SEE
IMAGE

ANTI MONOPOLY
COMPLAINTS ISSUED

CEASE AND DESIST
ORDERS ISSUED

GRAPH - SEE IMAGE

GRAPH - SEE IMAGE

Percentage Increase
Over 1944-53 Average
23

DECEPTIVE PRACTICE

COMPLAINTS ISSUED

CEASE AND DESIST
ORDERS ISSUED

GRAPH - SEE IMAGE

GRAPH - SEE IMAGE

24

Chapter Four

INVESTIGATION

The casework production line—whose end product is public protection—begins with the
Bureau of Investigation. Here facts are gathered and analyzed to determine whether they
contain, in the staff's opinion, violations of the laws administered by the Commission.
The raw materials for this Bureau's work come principally in the form of letters from the
public complaining of business skullduggery or from indignant competitors of business firms
that have been cutting too sharply the corners of fair competition. Telephone calls and
personal visits add to the grist. Indeed, the Congress and the Commission itself can and do
call for investigation of dubious business practices.
Requests received from the public or from business for corrective action by the
Commission are known as questions or applications for complaint to distinguish them from
the formal complaints issued by the Commission against alleged offenders. It readily can be
appreciated that more of these petitions for complaint are received than warrant Commission
action, either formal or informal. Many, for example, lie outside the Commission's
jurisdiction, and some are so trivial or so close to the borderline of legality that it would be
poor utilization of the Commission's resources to pursue these instead of cases invested with
more public concern. Therefore, the first step taken by the Bureau of investigation is to select
from all petitions for complaint those impressed either with the greatest value as guideposts
for all business or corrective of the worst dangers and injustices.
A petition for complaint is assigned to one of the bureau's project attorneys who makes
preliminary report on it. In simple cases, the preliminary investigation can be handled by
mail; the more complex are sent to field offices and assigned to attorney examiners. Reports
by the latter are reviewed by branch managers who submit recommendations to the Bureau.
At this point, the Bureau would reach a decision on whether the case should be closed or
what type of corrective action would be appropriate. decision to close the case is reviewed
first by the Commission's Secretary, and a report of its closing
382867—56——3

25

is reviewed by the Commission itself. If the Bureau's decision is to recommend complaint,
the case moves to the Bureau of Litigation.
Since July 1, 1954, the legal investigation work of the Commission has been under the
general supervision of the Director, Bureau of Investigation, and the guidance of the chief
project attorney and his staff of 22 project attorneys. Each of the latter has primary and
continuing responsibility for the initiation and progress of a complaint from its inception to
its final disposition.
During the investigations, economic, marketing, and accounting data from the
Commission's records and technical and scientific advice from the staff and from other
Government agencies are used. In addition, the party complained against may be interviewed
and called upon to provide information. Frequently, it also is necessary to interview
competitors and members of the general public to find out whether the charges are well
founded and if public interest warrants pursuit of the case.
It is the Commission's policy to withhold the names of specific firms and specific
products during their investigation. The obvious and valid purposes for this is to spare the
firm and its product or service unfavorable publicity until the Commission decides wether
the facts are sufficient to warrant the issuance of a formal complaint. (In the event a case is
settled by informal stipulation, only the stipulation agreement is made a part of the public
record.)
MAJOR INVESTIGATIONS
Most extensive investigations result in formal complaints, and in fiscal 1955, the
following cases entailed considerable investigative time:
Docket
Anheuser-Busch, Inc - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6331
Cross Baking Co - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6334
Magnesium Co. Of America - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6370
Southern Oxygen Company - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6372
Knomark Mfg. Co - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6364
California Sportswear & Dress Association, Inc - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6325
Callaway Mills Company - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6352
National Food Brokers Assn., Inc - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6363
Maryland Baking Company, et al - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6327
Retail Paint and Wallpaper Distributors of America, et al - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6367
United Fishermen of Alaska, et al - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6378
The Union Malleable Manufacturing Company - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6366
Otis Elevator Company, et al - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6350
Wilson Tobacco Board of Trade, et al - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6262
Florida Citrus Exchange - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6255

Other antimonopoly investigations during the year involved charges of price-fixing tiein
sales, price discrimination, payment of discriminatory promotional and advertising
allowances, discrimination in service and facilities, exclusive dealing, boycott, agreements
to elimi26

nate competition and preempt markets, agreements to restrict and limit trading on commodity
markets, and other types of trade restraints,
In the deceptive practice field, the year's principal investigative work dealt with the
following:
False advertising of a mineral and vitamin preparation for treatment of convulsions,
rheumatism typhoid fever, and heart trouble.
False and misleading advertising of another preparation for treatment of gall bladder
trouble, stomach ulcers, eczema, and hemorrhoids.
False and misleading advertising of mail order eyeglasses; representations concerning the
calorie content of food.
False and misleading advertising of oleomargarine as a dairy product.
Disparagement of competing types of cookware.
False and misleading claims concerning usual price of wearing apparel.
False and misleading claims as to effectiveness of agricultural products, fertilizers, and
soil conditioners.
Use of deceptive sales schemes in the distribution of sewing machines and other
household appliances.
Misrepresentations of Government connection in the sale of correspondence courses.
Deceptive practice inquiries conducted during the year also included investigations
among health, accident, and hospitalization insurers, as a continuation of the Commission’s
nationwide treatment of alleged false and misleading advertising in this industry.
Similar practices are covered by stipulations obtained as a result of deceptive practice
investigations completed during fiscal 1955. In addition, correction of questioned practices
permitting termination of investigation was effected in 231 cases through receipt of prompt
and voluntary assurances that such practices had been discontinued without intent to resume,
where it was found that this method of disposition would be in the public interest. Eighty-two
investigations were closed for the reason that the practice had been abandoned.
In addition to the foregoing, 21,259 man-hours of attorney time were spent in the
investigation of 196 matters to determine compliance with orders to cease and desist,
including 11,047 hours on 42 antimonopoly matters and 10,212 hours on 154 deceptive
practice matters. Also, 36,764 man-hours were spent conducting investigations in aid of
litigating 153 cases where formal complaint had issued.
Incoming applications for complaint numbered 2,513 during fiscal 1955, including 537
antimonopoly and 1,976 deceptive practices. There is no decrease in the flow of these
incoming matters, and prompt attention to them is required in discharging the Commission's
responsibility to protect businessmen and the public from injurious effects
27

of unfair competitive practices. It is expected industry-wide treatment will continue to be
necessary in many cases.
Issuance of an order prohibiting certain practices by one industry member quite often
brings forth additional complaints from other members of the affected industry who had
previously been indifferent to the existence of such practices or unaware of their illegality.
Publicity given to Commission proceedings in the press and in trade journals has a tendency,
therefore, to generate additional work and to increase the investigative caseload beyond
normal expectations. This is particularly true of industries composed of numerous small
independent business entities, such as ice cream manufacturers, food retailers, bakeries,
dairies, and gasoline retailers, selling staple commodities in keenly competitive market.
SCIENTIFIC OPINIONS
The function of the Division of Scientific Opinions is largely advisory. Its workload is
dependent largely upon the number of requests for opinions, consultations, and assistance in
connection with formal and informal cases made by other divisions and bureaus of the
Commission.
The vast majority of today's advertised products contain ingredients which have some
merit, but this limited merit is often exaggerated and misrepresented in the advertising. This
makes it necessary to define and delimit the value of the preparations in order to protect the
public from misrepresentation and at the same time avoid denying advertisers the right to
make valid claims. In many instances the drugs or cosmetics contain one or more relatively
new ingredients regarding whose virtues and limitations the published medical and scientific
literature frequently provides only fragmentary and inconclusive reports. These situations
make it essential that the Division confer with the medical specialists and other scientists
who have first-hand knowledge based on use of the drugs or cosmetics under conditions
which demonstrate their therapeutic or other properties.
It is not possible accurately to determine the truth or falsity of the claims made for the
new ingredients without having them subjected to clinical and hospital tests. In some cases
the advertisers have had clinical tests conducted using their products. Some of these clinical
tests are genuine contributions to science and assist materially in delimiting the value of the
products whereas others are designed merely to provide a specious or spurious defense in the
event of challenge. Distinguishing the one type of test from the other requires a painstaking
study of the reports of tests submitted in connection with the investigation or litigation of
many of the current false advertising cases. In some instances this study points to the
necessity of having further clinical tests conducted for the Commission by competent
28

experts in order to demonstrate the fallacy of the tests sponsored by the advertisers and to
establish definitely the virtues and limitations of the products advertised.
A total of 319 written and 622 oral medical and scientific opinions were prepared in this
Division during the fiscal year.
WOOL, FUR, AND FLAMMABLE FABRICS
This Division is charged with administering the Wool Products Labeling Act of 1939, and
the Fur Products Labeling Act, and the Flammable Fabrics Act. The purpose of the acts are
to protect consumers, manufacturers, and distributors from misbranded wool and fur products
and from false invoicing and advertising of fur products and furs, as well as from dangers
attending the use and marketing of highly flammable wearing apparel.
The Wool Products Labeling Act in general provides for mandatory disclosure of the fiber
content of products containing or purporting to contain woolen fibers which are subject to
its provisions. The name or identification of the manufacturer or concern responsible for this
content disclosure also must appear on the required label.
The Fur Products Labeling Act provides in substance that purchasers of furs and fur
products shall be informed of the true name of the animal that produced the fur as set forth
in the Fur Products Name Guide. It also requires disclosure whenever the fur or fur products
is composed of used fur, is bleached or dyed, or is composed in whole or in substantial part
of paws, tails, bellies, or waste fur. It further requires the name or registered identification
number of the manufacturer or distributor of the fur product, and the name of the country of
origin of any imported fur used in a fur product. This act covers the labeling of fur products
and the advertising and invoicing of furs and fur products.
The Flammable Fabrics Act, which became effective July 1, 1954, seeks to protect the
public against hazards incurred in the use of highly flammable fabrics as wearing apparel.
Each of the three acts provides for the filing of continued guaranties with the Federal
Trade Commission. public register for such documents is maintained by the Division.
Registered identification numbers force on required labels also are issued by the Division
upon proper application Substantive rules and regulations which amplify and explain the
basic statutes have been promulgated under each of the three acts. These rules and
regulations which have the force and effect of law are necessarily complex and technical.
Continuing economic and technological advances require amendments and new rules
whenever necessary in the public interest.
Approximately 70 industries manufacture products subject to the Wool Act, involving
some 25,000 manufacturers and 260,000 distribu29

tors Subject to the Fur Act are approximately 7,500 manufacturers of fur products which are
distributed through some 175,000 distributors.
The Flammable Fabrics Act applies to virtually the entire textile and garment
manufacturing industry and to the corresponding distributing trades including converters,
wholesalers, and retailers. Fabric and wearing apparel manufacturers in the United States
number almost 40,000. Distributors and dealers of wearing apparel number over 300,000.
The fact that Congress has placed the Flammable Fabrics Act in the hands of an
administrative agency such as the Commission for enforcement clearly shows that the Act
is intended to be prophylactic, with emphasis on industry counseling and early detection of
incipient violations. The law would bee of little value if it were to be administered simply
from a punitive standpoint and with corrective measures taken against violators only after
someone is burned.
There has been a heavy consumer demand for fabrics made from specialty fibers such as
cashmere, vicuna, camel hair, alpaca, and llama. In addition, fur fibers such as mink, leaver,
and guanaco, are now being blended with wool in the manufacture of fabrics. These specialty
fur fabrics are in short supply and consequently command a premium price, resulting in
increasing instances where manufacturers have tried to pass off inferior substitute fibers.
Workload Statistics for Fiscal 1955
Flammable
Fabrics
Act
Commercial establishments covered in industry compliance investigations - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Products examined for compliance (sampling methods used in wool
products) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Fur advertisements examined for deficiencies - - - - - - - - - - - - - - - - Matters involving questionable practices which were disposed of by
the acceptance of assurances of discontinuance - - - - - - - - - - - - - - - Opinions and interpretations rendered under the respective acts and
regulations - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Registered identification numbers issued - - - - - - - - - - - - - - - - - - - Continuing guaranties accepted for public register - - - - - - - - - - - - Number of matters investigated and referred for complaint or stipulation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Compliance investigations of concerns under cease and desist orders
or stipulations - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Wool Act

Fur Act

2,598

4,315

1,326

7,511,468
---------

7,260,868
---------

154,513
17,974

---------

6,192

1,955

4,530
--------3,954

2,822
512
1,297

1,994
328
777

7

26

21

---------

15

------

ACCOUNTING
This Division furnishes accounting services in connection with the investigation and trial
of legal cases and in general economic investigations.
The Division's work consists of accounting analyses and studies of the pricing policies
of respondents or proposed respondents to: (1) establish evidence of alleged price
discrimination under section 2 of
30

the Clayton Act as amended by the Robinson-Patman Act; (2) evaluate cost data submitted
by respondents in justification of alleged price discrimination, under the Robinson-Patman
Act; (3) establish evidence of alleged price-fixing in cases arising under section of the
Federal Trade Commission Act; (4) establish evidence of sales below cost in violation of
section of the Federal Trade Commission Act; (5) compile production and sales statistics and
analyzing financial data of companies and their competitors involved in mergers, in cases
arising under section of the Clayton Act; and (6) compile statistics concerning costs, prices.
and profits, and the financial position of companies under section 6 of the Federal Trade
Commission Act.
During the year accounting services were furnished in connection with 55 legal cases and
investigations. These included 33 Robinson-Patman cases, 4 other Clayton Act cases, and 18
section Federal Trade Commission Act cases.
31

Chapter Five

LITIGATION

The Bureau of Litigation prepares and tries all types of cases brought under the trade
regulation statutes administered by the Commission. These cases are concerned with
practices ranging from false advertising by a single firm to price fixing conspiracies
involving entire industries.
The cases fall into three major categories:
1. Monopolistic practices alleged to violate section of the Federal Trade Commission Act
or sections 2, 3, 7, or 8 of the Clayton Antitrust Act, as amended by the Robinson-Patman
Act.
2. False and misleading advertising and other unfair and deceptive acts and practices
alleged to violate sections 5,12, or 15 of the Federal Trade Commission Act.
3. Violations of special acts, namely, the Wool Products Labeling, Fur Products Labeling,
and Flammable Fabrics Acts. In addition, the Bureau may be called on to participate in
proceedings under the Export Trade Act, as well as under certain provisions of the Lanham
Trademark Act.
In connection with casework, Litigation Bureau attorneys:
1. Study investigational files and engage in legal research us the basis for a report
summarizing and analyzing the evidence, applying the applicable law and recommending
disposition of the case.
2. Draft complaints and comprehensive trial briefs.
3. Handle the trial of cases in which complaints are issued. This function includes the
usual duties of any trial lawyer, such as legal research, preparation of the necessary legal
documents; participation in conferences with parties, witnesses and attorneys; participation
in settlement negotiations and other pretrial procedures; the conduct of hearings; preparation
of briefs; and presentation of oral argument. The conduct of hearings involves, of course, the
examination of witnesses for the purpose of presenting oral testimony and the introduction
of documentary evidence, the cross-examination of defense witnesses and the presentation
of rebuttal evidence. Other duties are the preparation of applications for subpenas duces
tecum and other compulsory process, as well as the necessary steps to enforce them;
32

preparation and filing of answers to defense motions, petitions, and appeals.
In many cases, this work requires tine-consuming studies and conferences. It requires
intimate and detailed knowledge of the voluminous material in investigational files and
reports. It frequently calls for consideration of complex legal, medical, business, and
economic factors.
The Bureau is headed by a director who exercises general supervision over its work. He
is assisted by an assistant director who directly supervises the work of the trial attorneys. In
addition, there are 5 legal advisers—who are specialists in the field of antimonopoly law and
2 who are specialists in the field of law dealing with misrepresentation and other deceptive
practices. They provide advice and assistance to the director and assistant director, as well
as the trial staff, at all stages of the litigatory process. They also serve as trial attorneys in
cases of major importance involving a high degree of complexity and difficulty.
Statistical comparison of fiscal 1954 with fiscal 1955 shows an increasing caseload and
increasing output by the Bureau staff. Note, for example, the increase in the number of
hearings held in :1955, as well as in the number of complaints issued.
Antimonopoly
1954
Complaints issued - - - - - - - - - - - - - - - - - - - - Findings and orders - - - - - - - - - - - - - - - - - - - Cases dismissed - - - - - - - - - - - - - - - - - - - - - - Other dispositions - - - - - - - - - - - - - - - - - - - - Hearings held - - - - - - - - - - - - - - - - - - - - - - - Arguments - - - - - - - - - - - - - - - - - - - - - - - - - Briefs or exceptions field - - - - - - - - - - - - - - - - -

30
25
10
4
121
15
26

1955
36
30
8
7
261
9
21

Antideceptive
practices
1954
92
80
13
1
213
4
17

1955
125
82
5
20
323
17
40

Totals
1954
122
105
23
5
334
19
43

1955
161
112
13
27
584
26
61

But statistics can't tell the whole story. The cases cited below illustrate the great variety
of practices which the Commission is undertaking to halt as prejudicial to the public interest,
either because they restrain competition or tend to mislead or deceive the consuming public.
MERGER CASEWORK
The merger cases, brought under section 7 of the Clayton Act, are among the most
complicated cases handled by the Commission. They invariably require extensive hearings.
The test of legality in merger cases is the competitive effect reasonably to be expected.
The Commission has pending 5 complaints charging corporations with violating section
7 through their acquisition, in whole or in part,
33

of the stock or other share capital or the assets of one or more corporations engaged in
commerce where, in any line of commerce, in any section of the country, the effect may be
substantially to lessen competition or to tend to create a monopoly.
Through such litigation, the Commission is seeking to halt a growing trend in American
industry toward mergers of formerly competing corporations.
In every case where a complaint of this type has been issued, it has resulted in hardfought litigation.
The respondents in these merger cases are large corporations which generally are well
prepared for any legal attack upon them. Thus, in litigating merger cases, counsel supporting
the complaints are required to offer extensive proof, generally of an economic character, to
establish their burden under the statute.
Under the law, the Commission institutes its proceeding against a merger or acquisition
after its consummation. In view of the complications inherent in undertaking to restore, as
near as practicable, the status quo ante, the order of divestiture must be issued as soon after
the unlawful act as due process permits.
Pending cases in this field are described below:
1. Pillsbury Mills, Inc., Docket No. 6000
One of the principal pending merger cases involves Pillsbury Mills, Inc., the second
largest flour milling company in the Unites States. Pillsbury operates flour mills throughout
the Untied States and is also engaged in the manufacture of packaged food products having
a grain base.
During the 10-year period ending May 31, 1950, Pillsbury acquired some or all of the
assets of 6 companies, including flour and feed mills, soybean processing plants and grain
elevators. Its net sales grew form approximately $47 million to about $201 million, its local
assets from $30 million to approximately $59 million and its net worth form approximately
$23 million to $41 million.
The complaint alleges that in 1951 and 1952 Pillsbury acquired all or substantially all of
the assets of two competitors, Ballard & Ballard Flour Milling Co., and the Duff Baking Mix
Division of American Home Foods, Inc., and that the effect may be substantially to lessen
competition or to create a monopoly.
Counsel supporting the complaint have rested their case, and the presentation of defense
evidence is now in progress.
2. Crown Zellerbach Corp., Docket No. 6180
Another pending complaint charging violation of section 7 is directed against Crown
Zellerbach Corp., one of the largest manufacturers of pulp and paper in the world. The
complaint charges that
34

Crown acquired the assets, valued at over $15 million, of St. Helen’s Pulp & Paper Co., 1 of
its 2 principal competitors in the sale of kraft paper and paper products in the Western States.
One of the results of the acquisition, the complaint charges, is that paper jobbers and paper
converters in the Pacific Coast States have had their already limited sources of supply further
diminished.
The presentation of the case in support of the complaint was nearing completion as the
year ended.
3. Luria Brothers & Co., Inc., et al., Docket No. 6156
A series of allegedly unlawful mergers is among the practices in the iron and steel scrap
industry challenged by this complaint. Besides attacking the mergers, the complaint charges
that the dominant scrap brokers and nearly 20 steel manufacturers, including the major
producers, have engaged in various unfair methods of competition. It also alleges that the
dominant scrap broker and an export firm are engaged in a conspiracy in restraint of export
trade.
Hearings are under way in this case.
4. Union Bag & Paper Corp., et al., Docket No. 6391
Monopolistic control of a competitor is charged in a complaint against Union Bag &
Paper Corp., one of the Nation’s oldest and largest manufacturers of container board, which
also manufactures corrugated boxes made from such board.
The complaint alleges that Union has illegally acquired a substantial part of the shares of
the stock in the Hankins Container Co., with which it competes in the eastern area of the
United States in selling corrugated boxes and that the challenged stock agreement is but 1
of several which were entered into between these 2 companies whereby, for all practical
effects, Union Bag dominates and controls Hankins. The complaint points out that this
control has been acquired by several means, in addition to the purchase of the stock,
including the placing in the board of Hankins 2 officials of Union, 1 of whom is a member
of Union’s board of directors.
The complaint alleges that the effect of these agreements is to monopolize or to tend to
monopolize in Union the production, sale and distribution in interstate commerce of
container board and corrugated boxes and sheets. The complaint charges violation of section
5 of the Federal Trade Commission Act and sections 7 and 8 of the Clayton Act.
5. Farm Journal, Inc., Docket No. 6388
This complaint charges that Farm Journal, Inc., which publishes and distributes the
publication “Farm Journal,” violated section 7 of the Clayton Act by acquiring the
publication “Better farming,”
35

along with certain tangible and intangible property, from Curtis Publishing Company.
The complaint alleges that there are only six farm magazines with circulation of
1,000,000 or more and that only the Farm Journal and Better Farming provide any substantial
type of national coverage for the farm reader or advertiser. The complaint states that for the
year 1953 advertising revenues for farm magazines were approximately $41,000,000 of
which Farm Journal and Better Farming received approximately 38 percent.
The complaint charges that through the acquisition, actual and potential competition
between Farm Journal and Curtis Publishing Co., the first and second publishers in the
agricultural field, has been eliminated. Elimination of the magazine Better Farming, it says,
is prejudicial to both advertisers and subscribers.
ROBINSON-PATMAN ACT CASES
Section 2 of the Clayton Act, as amended by the Robinson-Patman Act' accounts for
many of the Commission's cases.
This section of the Clayton Act is designed to safeguard the competitive order against the
effects of a seller's unjustified discriminatory pricing. It also prohibits a buyer from
knowingly inducing and receiving discriminatory prices; a seller from discriminating in the
payment for, or furnishing of services or facilities as between competing buyers; and the
payment or receipt of brokerage fees, commissions, or other compensation under certain
conditions.
Illustrative of current enforcement is the corrective action taken in the import ant
multimillion-dollar automotive replacement parts field. The Commission issued during fiscal
1955 orders prohibiting four manufacturers of automotive replacement parts, selling on a
nationwide scale, from charging substantially higher prices to some jobbers or wholesaler
customers than to other customers competing in the resale of these parts to garages, filling
stations, and repair shops dealing with the consuming public.
There are pending before hearing examiners several cases relating to food, beverage, and
industrial activities in which charges are made that major manufacturers have engaged in
discriminatory pricing to the injury of unfavored customers or to the injury of competitors.
The litigation of these various matters will, in all probability, extend through 1956 into 1957.
PENDING ANTIMONOPOLY CASES
In addition to the cases listed under sections 2 and 7 of the Clayton Act, there are pending
numerous cases involving other types of monop36

olistic and trade-restraining practices, violating other sections of the Clayton Act and
violating section of the Federal Trade Commission Act. Following are examples of some of
the significant restraint of trade cases currently in litigation.
1. Cordage Importers Association, Inc., Docket No. 6389
After a thorough investigation of the importation into the United States from Mexico of
various forms of twine and rope which are manufactured from henequin fiber or sisal grown
in Mexico, the Commission issued this complaint against the Cordage Importers Association,
Inc., its officers and members, and one importer who is not a member of the association. The
complaint charged that these respondents conspired with the Mexican manufacturers of such
twine for the purpose of regulating its importation and fixing the prices paid by importers,
as well as resale prices. The complaint alleges that to carry out such an agreement, the
respondents set up a system for enforcing the resale prices of this Mexican twine after it is
imported. Among other things, it says, they reported to the Mexican twine manufacturers'
association any sales by importers, wholesalers, and retailers high are not in accordance with
the fixed prices, and the sources of supply of the offending importers were cut off for certain
periods.
2. Retail Paint and Wallpaper Distributors of America, Inc., et al., Docket No. 6367
The Commission has instituted this proceeding against two trade associations of paint and
wallpaper dealers. The complaint alleges a conspiracy to force paint manufacturers to confide
their sale to "recognized" dealers of paint, wallpaper, and allied products. It charges that the
respondents have acted collectively to induce manufacturers and other suppliers to
discontinue selling to certain retailers, including the use of boycott.
3. Paget Sound Salmon Canners, Inc., et al., Docket No. 6376
This complaint names an association of salmon packers, engaged in the business of
canning and packing salmon caught in the Paget Sound area of the United States, the union
to which the fishermen who catch the salmon belong and the association of boatowners who
own or control the boats from which the salmon fishing is conducted. Charging that all these
respondents have combined to fix the prices at which the fish caught in this area is bought
and sold, the complaint says this is accomplished by a series of contracts or agreements
between the union and the boatowners and the union and the canners. The complaint alleges
that this conspiracy has the capacity and tendency to substantially increase the cost of food.
37

4. California Sportswear and Dress Association, Inc., et al., Docket No. 6325
This complaint is directed against the concerted activities of three associations, the
California Sportswear and Dress Association, Inc., Associated Sportswear Manufacturers of
Los Angeles, and the California Apparel Contractors Association, as well as the International
Ladies' Garment Workers' Union and the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers, together with the members of these associations
and unions. The complaint charges an unlawful combination in restraint of trade in
sportswear and dresses.
The Los Angeles area, here the combination is allegedly centered, accounts for $40
million of the $200 million in total annual sales by sportswear manufacturers.
The complaint alleges that competition between ladies' sportswear manufacturers in the
area has been adversely affected by the conspiracy. It says the effect has been to create a
rigidity in the price structure which is reflected in enhanced prices to consumers.
5. Wilson Tobacco Board of Trade, Inc., et al., Docket No. 6262
This case involves one of the world's largest flue-cured tobacco markets which supplies
the tobacco used chiefly in the manufacture of cigarettes. The respondents, Wilson Tobacco
Board of Trade, Inc., and the Wilson Warehouse Association, together with approximately
78 individual respondents, are charged with unlawful conspiracy to exclude new warehouses
from the tobacco auction warehouse business in the Wilson market and to preclude expansion
of existing facilities.
The complaint charges that the effect has been the creation of a virtual monopoly in the
tobacco auction warehouse business in the Wilson market, thus clogging the channel through
which some 97 million pounces of tobacco annually f Low in interstate and foreign
commerce.
ANTIMONOPOLY ORDERS
To illustrate further the scope and significance of the Commission's case work, a
sampling of antimonopoly proceedings in which orders were issued in fiscal 1955 is
revealing:
1. Barnes Metal Products Co., et al., Docket No. 6225
In this case, Barnes Metal Products; Co., and 19 other manufacturers of "rain goods"
(conductor pipe, gutter, eaves trough, elbows, etc.) were required to abstain from a planned
common course of action to restrict, restrain, and eliminate price competition in the industry.
The respondents cited in the order sell more than 50 percent of the dollar volume of the entire
industry.
38

2. Stenographic Machines, Inc., et al., Docket No. 6076
The only two distributors of shorthand machines in the United States were ordered to
refrain from carrying out any agreement to divide the market, between them. They were
forbidden to allocate customers for shorthand machines or to restrict any manner the sale and
distribution of the machines.
3. New York Coffee and Sugar Exchange, Inc., Docket No. 6235
Pursuant to a consent order, the respondents in this case were required to permit futures
trading in all types of coffee which are in general use in the United States. The order outlaws
a restrictive contract which specified only coffee from certain Brazilian port for futures
trading in the United States. This restrictive arrangement was pointed out by the
Commission in its economic report on coffee as one of the causes for the high coffee prices
of 1953-54.
4. United States Steel Corp., et al., Docket No. 6078
This corporation, together with Jones & Laughlin, Inland steel Co., Rheems
Manufacturing Co., and Republic Steel Corp., consented to the entry of an order requiring
the discontinuance of any planned common course of action among themselves or with others
to fix the prices of steel drums. These 5 major manufacturers control about 75 percent of the
domestic steel drum business.
5. Whitaker Cable Corp., Docket No. 5722; C. E. Niehoff & Co., docket No. 5768; Moog
Industries, docket No. 5723; and E. Edelmann & Co., Docket No. 5770
These respondents were found to have violated section 2 (a) of the Clayton Act, as
amended by the Robinson-Patman Act, and ordered to cease price discrimination in the sale
of automotive replacement parts to buyers who compete in their resale.
6. Topco Associates, Inc., Docket No. 6160
This respondent, one of the largest distributors of food products in the Middle West,
whose purchases for the year 1951 are estimated at $22 million, consented to the entry of an
order prohibiting the receipt of brokerage fees in violation of section 2 (c ) of the RobinsonPatman amendment to the Clayton Act. Two other brokerage cases involved K. C. Snow
Crop Distributors, Inc., Docket No. 6210, and Lafayette Foods, Inc., Docket No. 6223.
7. Kay Windsor Frocks, Docket No. 5735
This respondent, a large manufacturer of women's cotton dresses, which granted
advertising allowances to some of its customers, was required, under section 2 (d) of the
Clayton Act, to inform competing
39

customers of the terms upon which they too might receive such compensation.
8. Revlon Products Corp., Docket No, 5685
This corporation, a dominant manufacturer of lipsticks, nail products, and other cosmetic
products, was required to terminate its exclusive-dealing contracts with beauty supply jobbers
since the arrangements were found to violate section 3 of the Clayton Act.
DECEPTIVE PRACTICE CASES
That part of the Commission's work most readily understood and appreciated by the
ordinary citizen concerns its fight against false advertising and deception. The health and
accident insurance cases provided fiscal 1905's most conspicuous activity in this field, but
they by no means represented all of it. Some 100 complaints were issued against other firms
for unfair and deceptive practices, and 82 orders to cease and desist were meted out to
offenders.
There follows a synopsis of some of the fiscal year's significant cases designed to stop
misrepresentation injurious to consumers' health or pocketbooks
INSURANCE CASES
As a result of the Commission's investigation of the advertising practices of the
approximately 1,400 insurance companies issuing accident and health policies, and hundreds
of letters of complaints received from policyholders, formal complaints were issued against
28 insurance companies. The complaints allege these companies have disseminated false and
misleading advertising.
It is the custom to write the majority of this type of insurance coverage on a 1 year term
basis, renewable at the option of the company, and to issue it without requiring medical
examinations but with liability limited to exclude losses whose cause can be traced to any
condition existing prior to the issuance of the policy. The purchasing public, in the absence
of a disclosure of these facts, expects to be able to renew their accident and health policies,
as long as they pay their premiums, in the same manner as standard life insurance. They also
expect to be paid in cases where the loss due to sickness occurs after the policy is in effect,
regardless of whether the loss is due to an unknown preexisting condition. If prospective
insureds are clearly informed that the policies can be canceled at will by the company or that
they do not cover losses due to all sickness, many will not purchase. Policies containing
noncancellable, guaranteed renewable, provisions and incontestable clauses relating to
preexisting conditions of health, are necessarily more costly.
40

These circumstances created a strong temptation to advertise the advantages of the insurance
in large type and list the qualifying provisions in the legalistic fine print of the policies.
In addition, there has been an extremely rapid growth in this field. Many companies have
doubled and tripled their premium income in recent years. Under these conditions of rapid
change and fierce competition, a situation developed which, due to loose language in some
cases and clear misrepresentation in others, resulted in an unusual amount of false and
misleading advertising.
The companies against whom complaints were issued included the largest in this field.
Collectively they received a substantial part of the estimated $1 billion premium payments
for all individual accident and health policies in effect in the United States. Their combined
premium income from accident and health insurance in 1'353 totaled over $400 million.
Partly because these companies believe that the States and not the Federal Government
have jurisdiction to regulate insurance advertising, the great majority are fully contesting
these proceedings. They also contended that the complained of advertising was not
misleading when considered in context with the rest of their advertising.
Examples of the companies fully contesting these proceedings are:
Mutual Benefit Health & Accident Association (Mutual of Omaha), Docket No. 6248
This company is the largest in the accident and health insurance field. It issues 11 percent
of the total insurance carried on an individual basis in this field. Its premium receipts for
1953 totaled $117,981,038.66. It is licensed to do business in all of the United States.
Bankers Life and Casualty Co., Docket No. 6240
This is the second largest of the accident and health insurance companies. It advertises
its policies under the name "The White Cross Plan." Its premium income in this field in 1953
totaled $90,850,469.02.
Reserve Life Insurance Co., Docket No. 6250
This is the third largest. Its premium income from this type of insurance totaled
$37,707,192.96 in 1953. It is licensed to do business in most of the States of the United
States.
Two of the 28 insurance cases have resulted in the issuance of cease and desist orders on
the basis of consent settlements.
FOOD, DRUGS AND DEVICES
1. LeBlanc Medicine Co., Docket No. 6390
This complaint challenged the advertising claims of a mineral and vitamin preparation
known as "Kary-On." Contrary to published
382867—56——4

41

and broadcast advertisements, the complaint charged that Kary-On is of no value in the
treatment of a long list of ailments including convulsions, rheumatism, erysipelas, cellulitis,
typhoid fever, heart trouble, diabetes, ulcers, epilepsy, and asthma.
The complaint also attacked as deceptive unqualified claims that Kary-On is of value in
the treatment of indigestion, stomach trouble, digestive disturbances, constipation, loss of
appetite, insomnia, aches and pains in various parts of the body, neuritis, nervousness,
headache, dizziness, swollen knees, breathing difficulties, and accelerated aging process. It
said the product is of no value except where such symptoms or conditions are caused by
vitamin B1, B2, niacin, or iron. deficiencies. It added that each of these conditions and
symptoms may result from any one of a number of causes that have no connection with
deficiencies of vitamin B1, B2, niacin, or iron.
Other cases involving misrepresentation of vitamin and mineral preparations include:
General Products Corp., Docket No. 6303; Nutrition Enterprises, Docket No. 6359; ChesterKent, Inc., Docket No. 6374.
2. Foster-Milburn Co. et al., Docket No.5937
In this case, the Commission issued a cease and desist order prohibiting nationally
advertised claims for Doan's Pills. The order forbids representations that Doan's Pills have
any therapeutic value in the treatment of any disease, disorder, or dysfunction of the kidneys,
or any beneficia effect upon any symptom or condition which may arise by reason of any
disease, disorder, or dysfunction of the kidneys.
3. Loesch Hair Experts, et al., Docket No. 6305; Merit Pharmacal Co., Inc., Docket No.
6314; Ward Laboratories, Docket No. 6346
These cases illustrate a project designed to protect the public from false claims of
remedies for and prevention of baldness and for treatment of the hair and scalp.
4. C. G. Optical Co. Docket No.6260; Advance Spectacle Co., Docket No.6285
These complaints, which grew out of another project investigation, charged false
advertising in the mail-order sale of eyeglasses. Cease and desist orders were issued in both
cases.
5. Oleomargarine Cases
One complaint and two orders to cease and desist were issued against the advertising of
oleomargarine as a dairy product in violation of section 15 (a) (2) of the Federal Trade
Commission Act.
42

WEARING APPAREL AND FABRICS
Twenty complaints and 18 orders to cease and desist were issued in the enforcement of
the Wool Products Labeling Act during the fiscal year 1955. The vigorous enforcement of
this statute provides protection to the public aga-inst false labeling of wool products as to
fiber content.
The respondents in case (Broadmore Fashions, Inc., et al., Docket No. 6231) were
prosecuted criminally under section 10 of the Wool Act; the respondents were jointly fined
$5,000, and 1 was placed on probation for a year.
Also, during the year 14 complaints and 8 orders to cease and desist were issued under
the Fur Products Labeling Act in safeguarding the public against misbranding and false
advertising and invoicing of furs and fur products.
Six complaints were issued under the new Flammable Fabrics Act. These involved silk
scarves manufactured in Japan.
The first seizure-condemnation case under the act was successfully prosecuted. Under a
libel of information filed by the Commission, a decree was entered in the United States
District Court for the Southern District of New York condemning as dangerously flammable
nearly 90,000 scarves imported from Japan valued at more than $20,000.
HOUSEHOLD APPLIANCES
1. Permanent Stainless Steel, Inc., et al., Docket No. 6010; American Stainless Kitchen Co.,
Docket No. 6294, Flavor-Seal Corp., Docket No. 6348
False advertising of stainless steel cookingware, including disparagement of
aluminumware, was the subject matter of these cases. An order was issued in the Permanent
case; the other two were pending at the close of the fiscal year.
2. Better Living, Inc., Docket No. 6290, Masterline Corp., Docket No. 6291
False and deceptive claims for price and installation of aluminum storm doors and
windows were challenged by these complaints. An order was issued in a similar case.
3. Sewing Machine Cases
Misrepresentation in the sale of sewing machines demands continuing attention. Six
orders were issued requiring clear disclosure of the country of origin of imported sewing
machine heads. These sewing machine heads, when imported, disclose the country of origin
in compliance with Customs requirements but such markings are frequently obliterated or
covered in the process of assembling.
43

MISCELLANEOUS
1. Trade Union Courier Publishing Co., Docket No. 5966
In this case, the Commission ordered a halt to false claims that a newspaper is sponsored
by or affiliated with the American Federation of Labor. The order also forbids the company
to publish or collect for advertisements not authorized.
2. Fashion Academy, Docket No. 6194
The order in this case prohibits false or deceptive representations that a product has been
presented with an award or other distinction as the result of a competitive contest.
3. Fabricon Company, Docket No. 6282; National Training Service, Inc., Docket No. 6283,
Wm. H. Wise Co., Inc., et al., Docket No. 6288; Universal Training Service Docket No.
6345
Four complaints were issued in a continuing project to prevent false advertising by
correspondence schools, including representations of being connected with the United States
Civil Service Commission. Cease and desist orders were issued in three of these cases Three
additional orders were issued in similar cases.
4. Orchids, et al., Docket No. 6129; Loamium Company of America, Docket No. 6130; RaPid-Gro Corp., Docket No. 6267; Burkleigh Co., et al., Docket No. 6270
In the Orchids case, false claims for a soil conditioner called "Loamium" were prohibited.
The Loamium Company was barred from using false representations for a chemical grass and
plant inhibitor. The Ra-Pid-Gro and Burkleigh cases involved false and exaggerated claims
for fertilizers.
5. Evis Manufacturing Co., Docket No. 6168
The complaint challenged claims that a "water conditioner" will cause hard water to "act"
like softwater and will eliminate and prevent the formation of scales and rust in water
systems. Scientists and the water softening industry, as well as industrial users of water,
manifested great interest in this case.
PROSPECTIVE DECEPTIVE PRACTICES CASE LOAD
On July 1, 1955, there were pending 127 formal cases involving deceptive practices.
Some of these cases remain to be tried in their entirety; the trial of others is in advanced
stages. Also pending were 33 formal matters, either for review or for drafting of complaint.
These cases involved a wide variety of commodities and charges.
44

Summarizing the Commission's performance, Commission Chairman Edward F. Howrey
declared:
In the present fiscal year the Commission has brought more cases in the field of deceptive practices than
in any single year during the last years. At the same time, we have avoided the peripheral or fringe type of
test case—which tor so many years depleted and diverted the energies of the Commission.

45

Chapter Six

ENFORCEMENT AND COURT WORK

The effectiveness of the Commission’s work in investigation and litigation depends
ultimately on how well compliance with orders, stipulations, and rules is policed. Laxity in
their enforcement would nullify to a great degree the Commission’s capacity to foster fair
competition.
Compliance work as well as other important legal duties are handled by the general
counsel, who is chief law officer for the Commission, and his staff. They have responsibility
for:
(a) All appellate and court work of the Commission;
(b) All matters of compliance with Commission orders against respondents including
preparation of penalty suits for their violation; as well as responsibility for coordinating the
integrated compliance program with cease and desist orders, voluntary stipulations and trade
practice rules, including a continuing compliance check of advertising in newspapers and
periodicals, and on radio and television;
(c) Supervision and direction of all functions of the Commission in operation of the
Export Trade Act;
(d) Responsibility for analyzing and advising the Commission on new legislation and
handling congressional liaison generally.
Clearance by the Chairman of the Commission, upon consultation, of voluntary industry
agreements and programs sponsored by other agencies of the Government is a specialized
activity of the Commission assigned to the general counsel's office. These voluntary
agreements and programs generally have a wide effect on industrial activities throughout the
country. They are designed to aid in defense production and related governmental
undertakings required by statutes administered by other agencies, such as the Defense
Production Act and the Small Business Act of 1953. Thirty-three such industry programs and
agreements were in operation at the close of the fiscal year.
In addition, the Commission's business consultative services are subject to the general
counsel's scrutiny from the standpoint of Commission policy and coordination of legal action.
Members of
46

his staff are available for informal conferences with small businessmen, attorneys, and others
requesting informal advice on the staff level. Particularly is this guidance important to the
Small Business and Trade Practice Conference Divisions. It affords assurance against
conflicting interpretation or application of the law and provides unity of action essential to
effective functioning of the Commission.
Divisions within the Office of the General Counsel carry out the following functions:
APPELLATE WORK
The principal work of this division is to defend or prosecute proceedings instituted in
Federal courts in which the Con mission is a party. Any party against whom a cease-anddesist order is issued has a right to test the validity of the order by filing a petition for its
review in a United States court of appeals, and any person aggrieved by any final action taken
by the Commission for which review is not specifically provided by statute may challenge
that action by appropriate proceedings in a United States district court. In cases under the
Clayton Act, if the Commission's order is not obeyed, the Commission may seek affirmance
and enforcement of the order in a United States court of appeals. This division handles all
phases of such litigation, including the briefing and oral argument before the courts. It also
participates with the solicitor general whenever these reach the Supreme Court of the United
States on petition for writ of certiorari.
This division prepares drafts of reports by the Commission upon legislative proposals on
which committees of the Congress or the Bureau of the Budget request the Commission's
views. It also drafts legislative proposals which the Commission may wish to submit to the
Congress. The division also makes recommendations on questions involving substantive and
administrative law and procedure arising from both Commission and court proceedings.
During fiscal 1955 the division carried 20 court cases to completion, 9 of which were
antimonopoly cases and 17 were antideceptive practice cases. Of these, 20 were upon
petitions for review of orders to cease and desist; 2 were petitions by the Commission for
enforcement of orders to cease and desist; and 2 were proceedings initiated by the
Commission for modification of orders previously affirmed by the courts. Five of the 26
cases went to the Supreme Court, on petition of the Commission in which certiorari was
granted and the modification made by the lower court in the Commission's order was
reversed, and 4 were petitions for certiorari by parties who were respondents before the
Commission, all of which were denied by the court.
47

At the close of the fiscal year the workload consisted of 1 case pending in the Supreme
Court on petition for rehearing, 30 proceedings pending in United States courts of appeals
or on remand to the Commission, and 1 pending in district court. Of the 32 pending cases,
22 are antimonopoly matters, 9 are antideceptive, and pertains to employment rights.
During the fiscal year the division prepared draft reports upon 44 legislative proposals.
COMPLIANCE
The Compliance Division s assignment is to obtain and maintain compliance with cease
and desist orders issued by the Commission.
Violation of an order issued under the Federal Trade Commission Act makes a respondent
liable to civil penalty in a suit brought in a United States district court up to $5,000 for each
violation. Where the violation continues, each day of its continuance is a separate offense.
This is particularly applicable to continuing conspiracies in restraint of trade.
Penalty proceedings for the period July 1, 1954, to June 30, 1955 were as follows:
Pending July 1, 1954 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5
Filed during year - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9
Total for disposition - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 14
Disposed during year - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3
Pending July 30, 1955 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11
Certified, not yet filed - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3
Complaints being prepared, including 1 on suspense at direction of commission - - - - - - - - - - - - - - - - 11

Since the institution of this division in 1947 the record of civil penalty suits is:
Fiscal year

Total Judgments and
settlements

Number of
suits certified to the
Attorney
General

Fiscal year

$38,000.00
1 1953 - - - - - - - - - - - - 1947 - - - - - - - - - - - - --------0 1954 - - - - - - - - - - - - 1948 - - - - - - - - - - - - 16,900.00
0 1955 - - - - - - - - - - - - 1949 - - - - - - - - - - - - 7,000.00
9
1950 - - - - - - - - - - - - 1
1
Total - - - - - - - - 1951 - - - - - - - - - - - - 80,000.00
5
1952 - - - - - - - - - - - - 11,600.00
1
Morton Salt case—$100 day penalty, failure to obey order to report.

Total judgments and
settlements

Number of
suits certified to the
Attorney
General

$59,538.20
8,950.00
40,132.69
_________
262,110.89

3
2
11
_________
--------

The primary objective is to secure and maintain compliance rather than a large number
of civil penalty judgments. This cannot be attained without judicious and prompt application
of civil penalty procedures where after every reasonable effort, compliance apparently cannot
be obtained otherwise.
The conduct of investigations is necessary to discover which of its cease and desist orders
are being violated and by whom.
48

Where millions of dollars of the taxpayers' money are being expended annually o obtain
orders in the public interest, adequate financial arrangements ought to be made to see that
these orders are obeyed. These orders look to the future and have no termination. Experience
shows that a respondent may be in compliance today and in violation 3 or 4 years hence, and
that without the reasonable and continued surveillance conducted by the Commission through
this division, approximately 70 percent of such orders would have no meaning or effect. In
at least 70 percent of the compliance cases handled it is unnecessary to do more than analyze
and file a compliance report.
The total amount of all civil penalty judgments prior to 1947 was $74,715. This was 11
years from the date of the Wheeler-Lea Act in 1930 when civil penalties were first authorized
by statute for violation of Commission orders. Since 1947 (8 years), civil penalty judgments
have totaled $261,988.20. This is approximately 40 percent of the total operative cost of the
Compliance Division over the same period.
In cases involving deceptive practices there is some reason to assume that usually in the
absence of a complaint by a competitor or the public, either that; the order is being obeyed
or that there is no public interest in the expenditure of time or funds. But the same
considerations do not apply to orders of the great complexity involved where business
concerns have been ordered to cease and desist from price fixing or other conspiracy and
monopolistic practices. Those affected ordinarily do not have sufficient information to enable
them to file a complaint, and the general public feels the results of, but does not understand
the matter.
Legal Difference
Most orders involving restraints of trade are issued under the Clayton Act, have no
finality until enforced by decree of the United States court of appeals after proof of violation,
and proof of a further violation is necessary for a fine in criminal contempt. Since 1947 there
have been no such fines, and previously only 3 judgments have been recovered, 1 in 1937,
1 in 1940, and 1 in 1945.
Orders now on the books cover nearly all industries. Through effective enforcement such
orders are of great benefit to the public.
Since its organization, the Commission has issued approximately 4,600 cease and desist
orders. The Compliance Division from its establishment in 1947 to the close of the fiscal year
1954 had been able to deal adequately with the respondents' methods of compliance in less
than 700 of such orders.
With a small staff increase in August 1954 the division undertook a survey of older
orders. Review of more than 1,200 of these was
49

accomplished; 469 supplemental report of compliance were requested, and in about 450 cases
respondents are known to be presently in compliance. Out of this review grew 1 civil penalty
proceeding and 5 civil penalty investigations. In addition 26 compliance general
investigations were instituted. The foregoing relates to antideceptive cases only. No
antimonopoly compliance investigations were instituted as a result of the survey during the
year, but 71 supplemental reports were requested in such cases and one was received and
filed as satisfactory. These reports are nearly always voluminous and complicated, requiring
many man-hours of analysis.
A special survey of 171 Robinson-Patman Act orders issued before 1947 also was
initiated. In 42 of these cases compliance was found to be current, 22 were screened out as
requiring no further present attention, 17 supplemental reports were received and 5 have been
filed as satisfactory. The rest are still being actively studied. Also voluminous supplemental
compliance reports from the 70 respondents in the Cement case were under study.
A substantial number of the approximately 2,800 outstanding orders with respect to which
no investigation or examination whatsoever has been made, proscribed industrywide
pricefixing and restraint of trade practices and discriminatory practices violative of the
Clayton Act. These orders are directed against numerous evils in many of the country’s most
vital industries.
Among these 2,800 orders, more than 500 involve restraints of trade and Clayton Act
violations, price-fixing conspiracies, and other complicated problems. Many of these cases
involve a large number of respondents. For instance, in fiscal 1955 there were 565
respondents in 30 such orders; in the order against the Dental Trade Association there are
145 respondents; in the American Iron & Steel case 89 respondents; and named in the order
against the Advertising Specialty National Association, were 294 respondents. In these cases
the Complaint Division must ascertain that each respondent is in complaint.
In less than 30 percent of these cases can the reports of complaint be processed, received
and filed without further negotiations. These statistics are typical, not exceptional. During
the year 118 compliance investigations were instituted and supervised by the division.
To facilitate checking up on complaint with the 4,600 orders, 8,500 stipulations, and 160
sets of trade practice rules relating to advertising, a special task force of 4 attorneys was
detailed to examine national and regional advertising by respondents subject to the orders,
stipulations and rules. During the fiscal year 1955 this task force turned up 6 cases which
went to investigation, 3 of which were being investigated for the institution of civil penalty
proceeding.
50

DIVISION OF SPECIAL LEGAL ASSISTANTS
The principal function of the Division of Special Legal Assistants is to formulate and prepare
documents necessary to implement the decisions of the Commission in all of its adjudicative
proceedings. Attorneys in the division also are available for general consultation and
research on questions of law, policy and procedures in connection with all phases of the
Commission’s work
During fiscal 1955 this division prepared drafts of 32 final decisions and 157
interlocutory orders and opinions; and 63 reports, recommendations, and miscellaneous
orders. Advisory assistance was rendered in the drafting of 57 proposed orders to be
included in new complaints
OFFICE OF EXPORT TRADE
The office of Export Trade performs those staff functions related to the Commission’s
administration of the Webb-Pomerene (Export Trade) act, which authorize cooperative
activity among American exporters for the purpose of promoting American export trade, and
exempts such groups, when operating within specific statutory bounds, from the prohibitions
of the Sherman Act. Export trade associations formed pursuant to the act are required to file
organizational papers with the Commission and to supplement these submissions annually.
The Commission is charged with supervisory authority over the associations and with the
corollary duty of inquiring into, and recommending reform of, activities outside the act’s
permissive area. Where an association fails to comply with the Commission’s
recommendations for readjustment of its practices, the Commission will refer the matter to
the Attorney General for appropriate action.
In fiscal 1955, 42 export trade associations, representing 436 members, were registered
with the Commission. Their total exports during the year, by commodity classes, were as
follows:
Metal and metals products - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $84,021,332
Mines and wells, products - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 23,618,855
Lumber and wood products - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5,625,932
Foodstuffs - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 108,357,541
Miscellaneous - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 619,840,517
___________
Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 841,464,177

In addition to its specific administrative duties under the Webb-Pomerene Act, the Office
of Export Trade maintains comprehensive contemporaneous files of general information
relating to foreign trade, advises other components of the Commission on foreign trade
matters, performs necessary investigative functions in connection with the Commission’s
general authority under section 6 (h) of the Federal Trade Commission Act to inquire into
foreign trade conditions, and
51

serves as liaison between the Commission and other agencies of Government administering
natters related to United States foreign trade.
ANTIMONOPOLY CASES IN FEDERAL COURTS
In the Supreme Court
Petition for certiorari was filed by Dictograph Products, Inc., New York, N. Y., seeking
review of decision of the United States Court of Appeals for the Second Circuit affirming
the Commission's order prohibiting exclusive dealing contracts in the sale of hearing aids.
This petition was denied and the case was pending on petition for rehearing at the close of
the fiscal year.
In the United States Courts of Appeals
At the beginning of the fiscal year there were 10 antimonopoly cases pending in the
courts, 18 new cases were instituted during the year, 7 were decided, leaving 20 pending in
United States courts of appeals and 1 in the Supreme Court. Of the 7 decisions, 4 affirmed
the Commission’s orders in full, 1 affirmed its order in part,1 and 2 were dismissed because
petitioners did not desire to proceed.
Decisions
Binney & Smith Company, New York, N. Y. (Second Circuit ). Discriminations in price
and promotional allowances in sale of school supplies. Consent decree was entered by court
affirming and enforcing the Commission’s order.
Dictograph Products, Inc., New York, N. Y. (Second Circuit). Affirmed the
Commission’s order prohibiting the use of exclusive dealing contracts.
Anchor Serum Company, South St. Joseph, Mo. (Seventh Circuit). Affirmed the
Commission’s order prohibiting the use of exclusive dealing contracts in the sale of hog
cholera serum, virus, and related products.
American Crayon Company, Sandusky, Ohio (Sixth circuit). Modified, and affirmed and
enforced as modified, the Commission’s order prohibiting discriminations in price and
promotional allowances in the sale of school supplies.
Whitney & Co., Seattle, Washington (Ninth Circuit). Consent decree enforcing the
Commission’s order prohibiting brokerage payments in violation of section 2 (c) of the
Clayton Act.
Revlon Products Corporation, New York, N. Y. (Second Circuit). Petition to review
Commission order prohibiting exclusive dealing contracts was dismissed because petitioner
did not desire to proceed.
____________
1

The Supreme Court on December 5, 1955, reversed that part of the judgment of the Sixth Circuit which set aside
a portion of the Commission's order.

52

Barton, Duer & Koch Paper Company, Baltimore, Md. (Fourth Circuit). Petition for
review of order prohibiting price-fixing and other restraints of trade in the sale of paper and
paper products was dismissed because petitioner did not wish to proceed.
Pending Cases
National Lead Company, New York, N. Y.; Anaconda Copper Mining Company and
International Smelting and Refinding Company, New York, N. Y.; Eagle-Picher Company
and Eagle-Picher Sales Company, Cincinnati, Ohio; the Sherwin-Williams Company,
Cleveland, Ohio. Pending in the Seventh Circuit on 4 separate petitions (consolidated by the
court for hearing) to review and set aside an order prohibiting, pursuant to section of the
Federal Trade Commission Act, price-fixing and related practices by the several companies
and prohibiting further acquisitions of competitors by National Lead Company; and also
prohibiting each company, individually from discriminating in price in violation of section
2 of the Clayton Act, all with respect to lead pigments.
Chain Institute, Inc., et al., Chicago, Illinois (Eighth Circuit). Petition for review of order
prohibiting price-fixing and price discrimination in the sale of claim and claim products.
Bradner Smith & Company, Chicago, Illinois (Seventh Circuit; Nackie Paper Company,
Milwaukee, Wisconsin (Seventh Circuit); Harlem Paper Products Corporation, et al., Bronx,
N. Y. (Second Circuit); Metropolitan Bag & paper Distributors Association, Inc., New York,
N. Y. (Second Circuit); Robins Paper Company of Baltimore City, Baltimore, Md. (Fourth
Circuit); and The National Paper Trade Association, Inc., et al., New York, N. Y. (Second
Circuit). Petitions for review of order prohibiting price-fixing and other restraints of trade
in the sale of paper and paper products.
Standard Oil Company, Chicago, Illinois (Seventh Circuit). Petition for review of order
to cease and desist from discriminating in price in the sale of gasoline.
Union Circulation Company, Inc., et al., New York, N. Y. (Second Circuit). Petition for
review of order prohibiting agreements in restraint of trade in distribution of magazines.
Advertising Specialty National Association, et al., Washington, D.C. (First Circuit).
Petition for review of order prohibiting agreements in restraint of trade in the sale of
novelties used for advertising purposes.
LaSalle Extension University, et al., Chicago, Ill. (Seventh Circuit) and Stenographic
Machines, Inc., Chicago, Ill. (Seventh Circuit). Pending on petitions for review of order
prohibiting agreements in restraint of trade in mechanical shorthand machines.
53

Whitaker Cable Corporation, North Kansas City, Mo. (Seventh Circuit). Petition for review
of order to cease and desist prohibiting price discrimination in the sale of automotive parts.
E. Edelmann & Company, Chicago, Illinois (Seventh Circuit). Petition for review of
order to cease and desist prohibiting price discrimination in the sale of automotive parts.
Moog Industries, Inc., St. Louis Mo. (Eighth Circuit). Petition for review of order to
cease and desist prohibiting price discrimination in the sale of automotive parts.
American Crayon Company, Sandusky, Ohio (Sixth Circuit). Discrimination in price and
promotional allowances in the sale of school supplies. Review by the Supreme Court of part
of judgment of Court of Appeals for the Sixth Circuit being sought.
DECEPTIVE PRACTICE CASES IN FEDERAL COURTS
In the Supreme Court
The Rhodes Pharmacal Co., case was pending at the beginning of the fiscal year on
petition for certiorari to review that part of the judgment of the Court of Appeals for the
Seventh Circuit which modified one provision of the Commission's order prohibiting false
claims for a drug product. The petition was granted, the lower court was reversed, and the
Commission’s original order restored. Petitions for certiorari were filed during the year by
Perry Halseth (lottery), Seymour Sales Co. (lottery), and Dolcin Corporation (false claims
for a drug product), to review decisions of lower court affirming orders of the Commission.
All three were denied.
In the United States Courts of Appeals
In addition to the 1 case pending in the Supreme Court there were 13 deceptive practice
cases pending in the United States Courts of Appeals at the beginning of the fiscal year. Five
new petitions to review and set aside Commission orders and 3 motions for modification of
decrees were filed during the year and 13 such proceedings were completed. Five cases were
decided. In 4 the orders were affirmed and enforced without change; and in 1 the order was
modified and affirmed. Two cases were dismissed for lack of prosecution, 1 case on remand
was closed by the Commission, and in 2 the original proceedings were completed, but further
litigation was instituted.
Decisions
Cases in which the Commission’s orders were affirmed and enforced without change are:
Perry Halseth, et al., Chicago, Ill. (Seventh Circuit). Lottery devices.
54

Marlene’s Inc., Chicago, Ill. (Seventh Circuit). False advertisements of a weightreducing tablet.
Seymour Sales Company, Chicago, Ill. (District of Columbia Circuit). Lottery devices.
Doris Savitch, et al. (Personal Drug Company) New York, N. Y. (Second Circuit). False
advertisements of a drug product.
Cases in which Commission orders to cease and desist were, after modification, affirmed
and enforced are:
Dolcin Corporation, et al., New York, N. Y. (District of Columbia Circuit). False
advertisements of “Dolcin,” a medicinal product offered for arthritic and rheumatic
conditions. The Court modified one provision of the order and remanded the case to the
Commission to allow Dolcin to introduce new evidence.
Two petitions to review commission orders were dismissed because the parties did not
desire to proceed, as follows:
Astor Industries, Inc., et al., New York, N. Y. (Second Circuit). Failure to disclose
foreign origin of sewing machine heads and unfair an deceptive practices in the use of brand
or trade name.
LaSalle Extension University, Chicago, Ill. (Seventh Circuit). False and misleading
advertising and unfair and deceptive acts and practices in the sale of a home-study course in
law.
Miscellaneous
Joseph Rosenblum, New York, N. Y. (Second Circuit); Standard Distributors, Chicago,
Ill. (Second Circuit); and Lustberg, Nast & Company, Inc., New York, N. Y. (Second
Circuit). Joint motions to modify court decrees to conform to modifications subsequently
made by the Commission in its orders were granted.
The New American Library of World Literature, Inc., New York, N. Y. (Second Circuit).
Deceptive failure to disclose abridgment or change of title in the sale of book reprints. The
Commission issued a new order to cease and desist pursuant to remand by the Court.
Philip Morris & Company, Ltd., Inc., New York, N. Y. (District of Columbia Circuit).
False and misleading advertising of cigarettes. The Commission accepted a stipulation to
cease and desist and further proceedings pursuant to the remand became unnecessary.
American Tack Company, Inc., New York, N. Y. (Second Circuit). Failure to disclose
foreign origin of goods. This proceeding was closed when the company failed to seek review
of the judgement of the Court of Appeals affirming and enforcing the Commission’s order.
Pending Cases
Tractor Training Service, et al., Portland, Oreg. (Ninth Circuit). False representations
in advertising of correspondence study course in diesel engines and heavy equipment.
55

James H. Sewell, Santa Ana, Calif. (Ninth Circuit). False advertisements of a device for
insertion in shoes for corrective purposes
Standard Distributors, Inc., Chicago, Ill. (Second Circuit). Misrepresentation of an
encyclopedia. The Commission directed institution of proceeding to obtain modification of
court decree to conform with modified order of Commission.
Marshall Maltz, Chicago, Ill. (Seventh Circuit). Lottery devices.
The New American Library of World Literature, Inc., et al., New N. Y. (Second Circuit).
Misrepresentation of book reprints and condensations. Petition to review modified order of
Commission.
U. S. Industries, Inc., New York, N. Y. and Chicago, Ill. (Fifth Circuit). False
representation and unfair practices in the sale of cookware.
Clean-Rite Vacuum Stores, Inc., Washington, D. C. (District of Columbia Circuit). False
advertising in the sale of vacuum cleaners.
Pending on Remand to the Commission
Carter Products, Inc., New York, N. Y. (Ninth Circuit). False advertisements of a drug
product.
Dolcin Corporation, et al., New York, N. Y. (District of Columbia Circuit). False
advertisements of a drug product.
In the United States District Courts
One suit was pending in a United States district court at the beginning of the fiscal year,
and one was filed in a district court during the year. One suit was dismissed for lack of
jurisdiction, and one remained pending at the close of the year:
Reubin Berkowitz, et al. (District of Columbia.) Suit by petitioners filed under the
Declaratory Judgments Act seeking a determination that the Commissioner's orders against
them do not apply to blank punch boards and push cards, was dismissed for lack of
jurisdiction.
Oliver W. Toll, Washington, D. C. (District of Columbia). Suit for a declaratory judgment
determining employment rights.
56

Chapter Seven

ECONOMIC ANALYSIS
AND REPORTING

The role of economic analysis as part of the Commission's law enforcement function
assumed increasing importance during the year. This shift in emphasis was accelerated by
close cooperation of the economic staff with the Merger Task Force appointed in April 1955,
as well as by increased participation of the economic staff in the preparation and trial of cases
arising under enactments other than section 7 of the Clayton Act as amended. More of the
resources of the Bureau of Economics thus were directed to pretrial and trial work with the
result that at least 60 percent of the time of the combined professional staff of the Bureaus
Division of Economic Evidence and Reports and the Division of Financial Statistics was
spent in law enforcement during the year. The other 40 percent was spent on the
Commission's financial reporting service on United States manufacturing corporations, on
preparation of the May 1955 merger report, and on other general and special assignments.
The Bureau's function in casework includes work on both section 7 and other cases. On
section 7 matters, the work includes the recording, screening, preliminary investigation, and
economic evaluation of the effects of particular acquisitions and mergers prior to the issuance
of complaint and also the preparation and presentation of evidentiary material in formal
proceedings. Economic analysis also is performed both before and after complaint in cases
arising under other laws administered by the Commission.
Financial Reports of United States Manufacturing Corporations
Balance sheets and income and expense statements of United States manufacturing
corporations are statistically consolidated by the Financial Statistics Division of the Bureau
of Economics. This work is carried on in cooperation with the Securities and Exchange
Commission which furnishes data on registered corporations.
This quarterly series was inaugurated in 1947 to:
( 1 ) Provide authoritative data for Government agencies that need statistics on the
consolidated financial condition of manufacturing corporations in the United States on a
current and continuing basis, and
382867—56——5

57

(2) Eliminate duplicate reporting to Government agencies and thereby reduce
inconvenience to industry.
The major Government users of the data are the Joint Committee on the Economic
Report, the Treasury Department, the Department of Commerce, the Board of Governors of
the Federal Reserve System, and the Executive Office of the President. The data are
published and are also widely used by business organizations and other private users.
Coffee Price Investigation
The Commission’s report on coffee prices prepared during 19541 was generally accepted
as the most comprehensive and timely economic study on the coffee situation in 1953 and
1954 when retail coffee prices rose as high as $1.32 per pound. The publication of the report
and the subsequent complaint and order against the New York Coffee and Sugar Exchange
were accompanied by a reversal of the precipitous coffee price spiral of 1953-54. The
accuracy of the report’s forecast of coffee production for 1955 has been borne out.
Industrial Concentration and Product Diversification in the 1,000 Largest Manufacturing
Companies
A comprehensive study of the positions of the 1,000 largest manufacturing companies in
the national economy has been made by the Commission's economic staff and a report on the
subject was nearing completion al the end of the year. The principal subjects of this inquiry
are: (l) the position of these companies among all manufacturing companies of the United
States measured in terms of total shipments; (2) the part of the national output of particular
industries that is supplied by companies included among the 1,000; and (3) the diversity, or
dispersion, of their manufacturing activities among commodity lines or industries. Detailed
comparisons of the importance of groups of these large companies in particular industries is
a unique feature of this report. Another is a series of tables slowing the number of companies
principally engaged in a given industry that shipped products primary to other industries.
MERGER REPORT
Work on other problems was interrupted to prepare Report on Corporate Mergers and
Acquisitions, issued in May.2 Based on data in the Commission's files, the first part of this
study carried forward
__________
1

The report, entitled Economic Report on the Investigation of Coffee Prices, as published under date of July 30,
1954. Copies may be obtained from the Superintendent of Documents, Government Printing Office, Washington, D. C.,
532 pp. $2.
2
Report on Mergers and Acquisitions, issued May 1955. Copies from Superintendent of Documents, Government
Printing Office, Washington, D. C., 210 pp. 55 cents.

58

through 1954 the long-term statistical series on disappearance of manufacturing and mining
concerns through mergers and acquisitions that was begun by the Temporary National
Economic Committee.3 The Commission found that since 1949 the pace of important
mergers and acquisitions had been rising; in 1954 the number in manufacturing and mining
reported in financial manuals was three times that of 1949, and just slightly less than the
number reported for each of the years 1946 and 1947 when merger activity reacted postwar
peak. Nevertheless, mergers and acquisitions were occurring at substantially lower rate in
1954 than during the later twenties.
A second statistical analysis in the merger report is based on a sample of all acquisitions
and mergers falling within the Commission’s jurisdiction and recorded by the Commission
during the first 43 months of the Anti-Merger Act of 1950.4 This analysis showed that
companies with assets of at least $10 million had made approximately 1,000 acquisitions
during this period, and that about 100 were of properties valued at $10 million or more.
Considerable attention was devoted to the "who-how-why” of current merger activity. In
discussing the "who” the report pointed out that the most common type of merger originates
with the acquiring company. Other mergers originate with smaller companies that wish to sell
out. On occasion a large company seeks a buyer for part of its property or business. Still
another important agent often present is an outside financial or other interest.
Dealing with the “how” of mergers, the report states that important acquisitions usually
involve either the exchange of stock between companies, or the purchase of stock of the
acquired company from individuals and firms either privately or in the open market. The
report describes the several forms of organization used in both acquisitions and mergers.
Turning to the “why” of mergers, the report lists six advantages to the acquirer which
frequently were apparent. These are: additional capacity, noted in 2 out of 5 acquisitions; a
longer line of products in the same business, noted in 1 out of 4; diversification of the
business, also 1 out of 4; vertical mergers looking toward sources of supply, 1 out of 8;
vertical mergers looking toward ultimate sale to consumers, 1 out of 10; and additional
capacity located in new markets, 1 out of 10.
The report concludes with a survey of the statutory standards of the Anti-Merger Act, and
of the problems of determining the probable competitive consequences of a merger or
acquisition. Important matters considered are the market facts relevant to an appraisal of
competitive consequences. This, of course, depends on the character of the
_________
3
4

TNEC Monograph No. 27, Part III, the Structure of Industry, by Willard L. Thorp, 1941.
Amendment to section 7 of the Clayton Act.

59

merger and the nature of the markets affected. The final chapter includes a survey of the
very limited amount of information generally available for compiling market share estimates
of evidentiary value.
Preparation of the Report on Corporate Mergers and Acquisitions was limited to 4 months
in order that "it should not divert so many of the Commission's staff members from their
continuing task of analyzing specific mergers that the administration of section 7 of the
Clayton Act would be impaired." It was designed to inform the Commission, the Department
of Justice, Congress, and the public on the important events concerning mergers.
Aid in Screening and Investigation of Mergers
Care in the selection of merger investigations requires that decisions on matters for study
be made as part of a series of steps rather than immediately upon the recording of an
acquisition. The first screening operation seeks to sift out: (a) acquisitions where the
Commission definitely does not have jurisdiction, (b) acquisitions where the acquired
company is in failing or bankrupt condition, (c) acquisitions by a small company of another
small company in markets where there are many competitors, and (d) other acquisitions
which, on the basis of the briefest information, can be shown to be insignificant.
Letters of inquiry are sent to companies where the acquisition appears likely to have
significant competitive consequences. These inquiries seek to establish such matters as the
name, date of incorporation, location, plants, or other real property, products, markets, and
in some cases principal suppliers and customers of these companies. Inquiry letters also
request such documents as the purchase or merger agreement, annual reports, and registration
statements.
If, after inquiry, there appears to be evidence that substantial lessening of competition
may result from the acquisition, the economics staff recommends either a field investigation
a survey of other companies operating in the same markets, or that a complaint be filed at
once.
ASSISTANCE IN LITIGATION
Aid to the legal staff in hearings on formal complaints is an important and continuing part
of the economic evidence work of the Bureau. Three cases accounted for a major amount
of the economic staff’s time, Crown-Zellerbach Corp., Pillsbury Mills, Inc., and Luria
Brothers and Co., Inc. (These cases are discussed in the summary of the work of the Bureau
of Litigation.) The principal work on them by the Bureau of Economics included the
following:
Crown-Zellerbach Corp.—Prior to the initiation of the case, the economic staff made a
preliminary analysis of the market positions of Crown-Zellerbach Corp. and St. Helens Pulp
Paper Co., which became the basis for the allegations in the complaint. Subsequently,
60

a survey of jobber and converter markets for coarse papers was conducted in the 11 Western
States, the results of which have been submitted in evidence. During the trial of the case, the
economic sta, assisted by accountants from the Division of Accounting of the Bureau of
Investigation, prepared a number of exhibits; supplied expert testimony; served as economic
advisers to the trial staff, both in presenting the Commission's case and in analyzing the
evidence offered by respondent; and assisted in the preparation of interim briefs.
Pillsbury Mills, Inc.—During the year extensive hearings were held largely for the
presentation of testimony by the respondent, the formal trial having begun in Minneapolis,
Minn., Sept. 23, 1952. This phase of the case required the full time assistance of one
economist and several months' time of specialist in connection with the evaluation of the
testimony presented and preparations for cross examination. At the close of the year
testimony from the respondent was still being received.
Luria Bros. & Co., Inc.—The formal trial in this matter began with hearings in
Philadelphia, January 12, 1955. Prior to this date the economic staff had carried out, in
conjunction with the legal staff, a comprehensive inquiry into the market positions in the iron
and steel scrap industry of Luria Bros. & Co., Inc. and other leading suppliers of scrap to the
steel industry. Analyses by the economic staff of the results of this inquiry provided the
economic base for allegations in the complaint and for developing evidence through
testimony in the hearings. During the trial a member of the economic staff has assisted the
trial staff in appraising economic evidence, made field investigations on economic aspects
of the proceedings, and testified on the economic significance of the evidence presented.
61

Chapter Eight

COOPERATION WITH INDUSTRY

In addition to formal actions against unfair competitive methods and illegal business
practices, the Commission provides an extensive program of voluntary and cooperative
procedures to avoid or correct trade practices harmful to industry and the public.
This program is administered by the Bureau of Consultation, consisting of the Divisions
of Trade Practice Conferences, Stipulations and small Business. Its purpose is to aid and
guide industry to achieve voluntary compliance with the laws enforced by the Commission.
The program is accomplished through trade practice rules interpretative of the laws,
settlement by stipulation of certain types of cases, informal hearings and consultative and
informal advisory services to members of the industry and small business. These cooperative
procedures save time and money for the Government and for business by avoiding formal
litigation.
TRADE PRACTICE CONFERENCES
The Trade Practice Conference Division assists in obtaining voluntary observance of law
on an industry-wide basis by working with members of industry and other interested persons
or groups to formulate trade practice rules. These define and prescribe business practices that
are unfair, deceptive, or otherwise unlawful. They guide industry by spelling out what
practices the Commission considers unlawful under the statutes it administers, and enable
industry voluntarily to bring its practices into compliance with the law.
Rules are revised or supplemented to keep them current with new legislation, subsequent
decisions of the Commission and the courts, new Commission policy and new industry
practices.
Procedure
Trade practice conference proceedings for an industry may be instituted by the
Commission on its own motion, or in response to an application by a trade association of the
industry or any interested
62

person or group. The great majority of proceedings culminating in rules have been
commenced in response to such applications.1
The Commission grants applications for trade practice conference proceedings only when
it appears likely that the proceedings will constructively advance the best interest of the
industry on sound competitive principles, or result in substantial improvement in voluntary
compliance with the law, or otherwise protect or advance the public interest.
After the Commission authorizes a trade practice conference proceeding for an industry,
a conference is scheduled in a city convenient to a majority of its members, and all known
members of the industry are invited.
At the conference, unfair trade practices within the industry are discussed, suggested rules
are considered and ample opportunity is given industry members to present their views. If
necessary, additional conference sessions may be held.
Following the conference, the Commission staff studies all the suggestions made, orally
and in writing, and prepares a draft of proposed rules. This is submitted to the Commission
with recommendation that these rules be released for public hearing. If the Commission
agrees, a public hearing is scheduled and copies of the proposed rules are mailed to all know
industry members and other interested parties.
Comments and suggestions made by industry members and others at the haring are
considered, and a draft of recommended final rules is submitted to the Commission for
approval and promulgation. When approved, they are published in the Federal Register and
become effective, usually 30 days after promulgation. Copies are sent to each member of the
industry, accompanied by an acceptance card which the member may use to signify his
intention to comply with them.
Classification of Rules
Trade practice rules for an industry may be wholly of the Group I classification, or also
may include rules in Group II.
Group I rules embrace trade practices which are considered illegal under laws
administered by the Commission. Appropriate proceedings in the public interest will be taken
by the Commission to prevent the use of such unlawful practices in commerce by any person
or organization subject to its jurisdiction.
Group II rules embrace industry practices that may be recommended by industry members
as suitable guides for sound business
____________
1

The method for Instituting trade practice conference proceedings for industries is set forth in subpart (c) of Part
2 of the Commission's "Rules of Practice, Procedure, Organization and Acts" published by the Commission in May of
1955.

63

methods. Since these practices are not required by law compliance with Group II rules is
wholly voluntary.
Conference Proceedings
More trade practice rules (new and revised) were promulgated by the Commission during
fiscal 1955 than in any year during the previous 2 decades.
A summary of the rulemaking work of the division during the year follows:
Conference proceedings pending July 1, 1954
Conferences authorized—new and revised rules - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 26
Applications for conferences—new and revised rules - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12
_____
Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 38
Applications for Conference proceedings received during the year - - - - - - - - - - - - - - - - - - - - - - - - - 14
_____
Total Conference proceedings in process July 1, 1954 to June 30, 1955 - - - - - - - - - - - - - - - - 52
Conference proceedings disposed of July 1, 1954 to June 30, 1955:
By Closing
By promulgation of new rules
By promulgation of revised rules

2
6
7
_______

15
_______

Total proceedings pending June 30, 1955 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 37
======
Trade Practice rules in force July 1, 1954 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 163
New Trade Practice rules promulgated - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6
_______
Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 169
Trade Practice rules rescinded during year - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 16
_______
Trade Practice rules in force June 30, 1955 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 153

During the year, rules were promulgated for the following industries: Radio and
Television (Revision), Wholesale Plumbing and Heating (Revision), Cosmetic and Toilet
Preparations (Revision), Bedding Manufacturing and Wholesale Distributing (Revision),
Waterproof Paper (Asphaltic Type), Library Binding, Chemical Soil Conditioner, Orthopedic
Appliance, Millinery (Revision), Fire Extinguishing Appliance (Revision), Tobacco Smoking
Pipe, Cigar and Cigarette Holder, Fountain Pen and Mechanical Pencil (Revision), Gummed
Paper and Sealing Tape.
The radio and television industry rules provide an outstanding example of the guidance
given an expanding industry with difficult trade practice problems. These rules include an
important definitive one relating to false and misleading descriptions of cabinet composition
as well as others designed to prevent deception respecting the size of pictures and picture
tubes of television sets. They also prohibit alteration of identifying names or marks;
deceptive use or change of cabinets; alteration or removal of serial numbers; deception
64

as to the convertibility of a television set to services other than those for which it was
originally manufactured; deception concerning being "new"; misuse of terms "discontinued
model," "floor sample," "demonstrator," etc.; deception concerning identity of products when
products are repaired, reconditioned, or rebuilt by other than the original manufacturer;
misuse of terms "factory rebuilt"; and misrepresentation of the effectiveness of television
antennas.
The trade practice rules for the Chemical Soil Conditioner Industry provide needed
clarification of legal requirements for this comparatively new industry. The rules deal with
a variety of misrepresentations and will assist in the elimination of unfair practices. They
prohibit, for example, claims that an industry product will help produce good crops in every
type of soil, or that it offers a significant substitute for nutrient material. The rules also
require disclosure of applicable conditions and limitations in claims that a product will treat
effectively a specified area; will effectively form or stabilize soil aggregates; will, when
mixed with a plant nutrient, serve as a soil conditioner or fertilizer, or will "condition" soil
when used as a surface application only on uncultivated soil.
Rules for the wholesale plumbing and heating industry represent a significant advance
in the guidance afforded industry members for compliance with subsections 2 (a) and 2 (f)
of the Clayton Act as amended. Notes and examples clarify provisions of these subsections
as interpreted in Commission and court decisions. These rules also include a new "selling
below cost" rule arrived at after intensive study and which is more informative on what
constitutes illegal selling below cost than any previous rule on the subject.
In addition to the conference proceedings resulting in trade practice rules during the year,
substantial progress was made in pending rules involving industries whose practices have a
direct and important impact upon the public. These involve the following industries: Nursery,
commercial dental laboratory, brick and structural clay tile and allied products, mastic a-d
texture sprayed coating, frozen food, direct selling, refrigeration and air-conditioning
contracting, low and medium price jewelry, diamond, corset brassiere and allied products,
and watch attachment.
Several informal conferences between representatives of cigarette producers and division
staff members were held. These probably will result in closer cooperation of the cigarette
industry with the Commission and a substantial decrease in the use of questionable
advertising claims for cigarettes.
ADMINISTRATION OF TRADE PRACTICE RULES
After promulgating trade practice rules, the Commission keeps in close touch with the
industries concerned in order to obtain maximum
65

voluntary industry-wide compliance with the Group I provisions. This liaison is maintained
through informal correspondence, office conferences and, in certain cases, field visits by staff
members with the industry members and representatives.
Subject to exceptions specified in the Commission's published policy statement,
complaints of rule violations are handled by the Division of Trade Practices Conferences.
Necessary corrections are made promptly and, in most instances, informally. Sometimes,
however, mandatory action under the law is necessary.
During fiscal 1955 the hitherto separate rule making and rule administration activities of
the Trade Practice Conference Division were integrated to achieve more effective
administration of rules. The attorney conducting proceedings leading to the rules now also
handles their administration. Both the division and industry profit by the attorney’s
familiarity with problems of the industry and his acquaintance with industry members.
A novel method of counseling members of industry operating under trade practice rules
was used for the wholesale plumbing and heating industry. At a panel discussion, Bureau
of Consultation staff members answered questions on provisions of the rules and their
administration. The questions on provisions of the rules and their administration. The
questions and answers were publicized for the entire industry to receive the benefit of the
discussion. The panel discussion was so well received and so useful that it is proposed to
extend the plan to other industries to the extent budgetary and personnel limitations permit.
A summary of compliance work during the fiscal year under trade practice rules then in
effect is as follows:
Compliance matters pending July 1, 1954 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 178
New matters initiated - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 553
_____
Total matters for disposition - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 731
Disposed of July 1, 1954 to June 30, 1955
By Division of Trade Practice Conferences
445
Referrd out of division
74
______
Total matters disposed of - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 519
_____
Compliance matters pending June 30, 1955 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 212

Several industries received special attention in the administration of the rules among them
were:
Masonry Waterproofing Industry.—Representations exaggerating the degree and
permanence of water impermeability of industry products were substantially curtailed as the
result of administrative contact with industry members.
66

Watch Designation Rules—Discontinuance of numerous deceptive representations in
advertising watches as "waterproof" and "shockproof" were effected through administrative
action under the rules.
Portrait Photographic Industry.—Voluntary corrective procedure resulted in substantial
reduction in the deceptive use of coupons and certificates, and misrepresentation in
advertising of contests, exhibits, special or limited offers, and coloring and finishing of
photographs.
Pearl, Cultured Pearl, and Imitation Pearl Industry.—Fictitious pricing of cultured pearls
and failure of importers to label imported products as to foreign origin were discontinued in
many instances as the result of administrative contact under the rules with industry members.
Bedding Manufacturing and Wholesale Distributing Industry.— Substantial improvement
was made in obtaining cooperative compliance with the rule to stop fictitious pricing and
false advertising and labeling of the therapeutic properties of stock springs and mattresses.
Sun Glass Industry.—Rule violations were corrected in eases of fictitious pricing, misuse
of the term "gold plated" to describe sun glass frames covered with gold by electrolysis, and
representations that products are "guaranteed" without disclosure of the terms and conditions
of the guarantee.
Jewelry Industry.—Satisfactory results were achieved under the rule administration
procedure in effecting abandonment of such practices as misuse of the word “gold” to
describe articles not gold plated or composed throughout of gold, and failure to describe
properly the gold content of products plated with gold; misuse of the word “perfect” to
describe diamonds; misrepresentation concerning the origin of jewelry; and
misrepresentation of synthetic or simulated stones as natures stones.
STIPULATIONS
Voluntary correction of unfair practices in individual cases, as distinguished from
industrywide action, is accomplished under the stipulation procedure. This affords
businessmen an opportunity to enter into a voluntary agreement to discontinue practices
considered to be unlawful, and saves the time and expense of formal complaint and trial.2
During the fiscal year the Division of Stipulations initiated a new program for eliminating
delays in negotiating stipulations and in ob____________
2

Opportunity to enter into a stipulation is not afforded when the alleged violation of law involves false advertising
of food, drugs, devices, or cosmetics which are inherently dangerous, the sale of fabrics or wearing apparel which are
so highly Inflammable as to be dangerous, or the suppression or restraint of competition through conspiracy or
discriminatory or monopolistic practices. The Commission reserves the right in all cases to withhold the privilege of
disposition by voluntary agreement.

67

taining compliance with them. As a result, 60 percent more stipulations were negotiated than
during the previous year.
Stipulation Procedure
Matters appropriate for disposition by stipulation are referred for this procedure after
investigation by the Bureau of Investigation. The alleged offender is furnished with a
statement of the acts or practices which, following investigations, appear to be unlawful. He
is afforded an opportunity to present his side of the matter either in person or through
counsel, by written communication or at an informal conference with a Commission
representative. (102 such conferences were held during the year.) Thereafter, a stipulation
or voluntary agreement providing for discontinuance of any practices shown by the facts to
be illegal may be entered into as a basis for disposing of the case. The stipulation becomes
effective upon approval by the Commission and is a matter of public record. If a satisfactory
stipulation cannot be negotiated the file is forwarded for further appropriate action.
Disposition of Stipulation Cases in Fiscal 1955
Cases forwarded with recommendation for:
Acceptance of executed stipulations - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 104
Closing without prejudice - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6
Issuance of complaint - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5
Cases referred to Bureau of Investigation for further attention - - - - - - - - - - - - - - - - - - - - - - - - - - - - 43
Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 158

Stipulations approved during the year provided for discontinuing a wide variety of unfair
or deceptive practices. Among the deceptions were claims that: A throat lozenge containing
an antibiotic cure prevents or shortens the duration of the common cold; an analgesic tablet
is of aid in arresting the progress of arthritis, rheumatism, sciatica, or neuritis; a vaporizing
device or a chemical compound used in it reduces the incidence of infection or the spread of
communicable disease, or is of value in the prevention of colds, sinus, or influenza; a kit for
home treatment of various leg conditions heals phlebitis, strengthens weakened veins or
restores the legs to normal; a special dietary food supplying calories, vitamin B1 and iron is
of value in increasing body weight, unless limited to cases of iron deficiency anemia,
thiamine deficiency, poor appetite or bad eating habits; a skin ointment will cure acne,
impetigo, or skin irritations in general; a stock shoe with certain special features eliminates
foot, leg, or back pains; a contour chair has any beneficial effect on posture; a detergent does
away with the need for scrubbing hospital instruments; the water
68

produced by a "water demineralizer" is chemically pure or the chemical equivalent of
distilled water; the food freezer unit of a refrigerator is self-defrosting; a correspondence
course assures the taker of passing Civil Service examinations; a cleaning fluid is "fireproof."
In other stipulations, a manufacturer of home-freezers and two distributors of freezers in
combination with food purchase plans agreed to discontinue claims that savings in food costs
will pay for the freezer or that any definite savings can be realized through the use of homefreezer.
In two stipulations, promoters of “product awards” agreed not to grant any “award” which
purports to be based on the judgment of qualified and impartial appraisers that the product
receiving the award is superior to competitive products in specified respects, when in fact the
“award” is not granted on that basis.
Nine importers or distributors of hooked rugs stipulated they would not use the word
“wool” to describe any rug which is not composed wholly or “wool” as defined in the
stipulations.
Two manufacturers of hair and scalp preparations agreed to stop representing that their
products grow hair or prevent baldness.
Four insecticide manufacturers stipulated not to claim that their products kill all insects.
Two vendors of jackets of a type issued to the Armed Forces agreed to refrain from
representing that the jackets were manufactured for or in accordance with specifications of
the Armed Forces.
Two furriers entered into agreements not to label or invoice fur products falsely or
deceptively.
A manufacturer of woolen fabrics and a manufacturer of woolen interlining material
agreed not to misbrand their products as to fiber content.
Stipulation Compliance
Parties to approved stipulations are required to file with the Commission within 60) days
after notice of this approval a report showing how they have complied with their agreements.
A stipulator may be required thereafter to file supplemental reports as the situation demands.
During the year, 74 reports were received and filed as showing satisfactory compliance.
Nineteen matters in which compliance reports were not considered satisfactory were referred
for further attention.
In a continuing compliance check of older stipulations, violations of 60 stipulations were
found and corrective action initiated by the division. Satisfactory reports of compliance with
111 stipulations were received.
69

SMALL BUSINESS
The Division of Small Business completed its first year of operation on June 30, 1955.
It was created specifically to enable the Commission to assist small business more fully in
obtaining the protection, relief and guidance available to it under the Federal Trade
Commission Act, the Clayton Act, the Robinson-Patman Act, and other statutes administered
by the Commission.
The principal functions of the division are:
1. To consult with the small-business man and explain the functions and procedure of the
Federal Trade Commission and assist him in their use to the fullest extent;
2. To give informal advice relative to the applicability of Commission case law and
statutes administered by it to specific practices, thereby enabling the small-business man to
conform his practices to the law. This procedure grants no immunity and is not binding upon
the Commission.
3. To keep small businessmen informed with respect to, and to expedite the movement
through the Commission of, those matters which involve practices adversely affecting them;
and
4. To perform certain liaison functions with the Select Committees on Small Business of
the United States Senate and the House of Representatives, as well as with the Small
Business Administration and occasionally with other governmental agencies.
These functions are performed by answering oral or written requests for information or
advice relative to specific and individual problems. Each problem is separately handled and
given whatever research, consultation or liaison work it might require. Answers are
accompanied with supporting citations and documents where pertinent.
During the year, the division received 1,021 matters of which 971 were completed. The
remaining 50 were in process awaiting completion of required legal research, receipt of
scientific opinion, or further information from the inquirer. In addition, 319 conferences were
held by the division's small staff.
Matters received by this division which do not fall within the scope of the statutes
administered by the Commission are referred to the appropriate governmental agency, and
the inquirer is so notified.
70

Chapter Nine

APPROPRIATIONS AND
FINANCIAL OBLIGATIONS

FUNDS AVAILABLE FOR FISCAL YEAR 1955
Funds available to the Commission for the fiscal year 1955 amounted to $4,129,000.
Public Law 428, 83d Congress, approved June 24, 1954, provided $4,045,000; and Joint
Resolution 69 Stat. 240-241, approved June 30, 1955, provided the sum of $84,000 for the
pay increases pursuant to Public Law 94, 84th Congress, approved June 28, 1955.
Obligations by Activities, Fiscal Year 1955
1. Antimonopoly:
Investigation and litigation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $1,554
Economic and financial reports - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 275,210
2. Deceptive practices:
Investigation and litigation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,093448
Trade practice conferences and small business - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 245,334
Wool, fur, and flammable fabrics enforcement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 258,938
Lanham Act and insurance - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 57,928
3. Executive direction and management - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 361,006
4. Administration - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 279,645
_________
Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4,126,281
Obligations by Objects, Fiscal Year 1955
Personal services - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $3,811,673
Travel - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 122,570
Transportation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5,818
Communication services - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 51,194
Rents and utility services - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25,285
Printing and reproduction - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 21,255
Other contractual services - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 46,253
Supplies and materials - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 40,746
Equipment - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,362
Refunds, awards, and indemnities - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 125
_________
Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4,126,281

SETTLEMENTS MADE UNDER FEDERAL TORT CLAIMS ACT
In reference to section 404 of the Federal Tort Claims Act, the following report is made:
During the fiscal year 1955 the Commission paid no claims nor were any claims pending.
71

COMPARATIVE APPROPRIATIONS
Appropriations available to the Commission for the past 3 fiscal years an obligations for
the same period, together with the unobligated balances, are shown in the table below. The
table also lists the number of employees as of June 30 of each year.
Year

1953
1954
1955

72

Number
of
employees
642
596
584

Nature of appropriations

Appropriations

Obligations

Balance

Lump sum (including printing and binding)
- - - do - - - - - - - - - - - - - - - - - - - - - - - - - - - do - - - - - - - - - - - - - - - - - - - - - - - - -

$4,178,800
4,053,800
4,129,000

$4,172,992.33
4,045,966.21
4,126,281.00

$5,087.67
7,833.79
2,719.00

Chapter Ten

APPENDIXES

Federal Trade Commissioners—1915-55
Name
Joseph E. Davies
Edward N. Hurley
William J. Harris
Will H. Parry
George Rublee
William B. Colver
John Franklin Fort
Victor Murdock
Huston Thompson
Nelson B. Gaskill
John Garland Pollard
John F. Nugent
Vernon W. Van Fleet
Charles W. Hunt
William E. Humphrey
Abram F. Myers
Edgar A. McCulloch
Garland S. Ferguson
Charles H. March
Ewin L. Davis
Raymond B. Stevens
James M. Landis
George C. Mathews
William A. Ayres
Robert E. Freer
Lowell B. Mason
John Carson
James M. Mead
Stephen J. Spingarn
Albert A. Carretta
Edward F. Howrey
John W. Gwynne
Robert T. Secrest

382867—56——6

State from which appointed
Wisconsin
Illinois
Georgia
Washington
New Hampshire
Minnesota
Nev Jersey
Kansas
Colorado
New Jersey
Virginia
Idaho
Indiana
Iowa
Washington
Iowa
Arkansas
North Carolina
Minnesota
Tennessee
New Hampshire
Massachusetts
Wisconsin
Kansas
Ohio
Illinois
Michigan
New York
New York
Virginia
Virginia
Iowa
Ohio

Period of service
Mar. 16, 1915-Mar. 18, 1918
Mar. 16, 1915-Jan. 31, 1917
Mar. 16, 1915-May 31, 1918
Mar. 16, 1915-Apr. 21, 1917
Mar. 16, 1915-May 14, 1916
Mar. 16, 1917-Sept. 25, 1920
Mar. 16, 1917-Nov. 30, 1919
Sept. 4, 1917-Jan. 31, 1924.
Jan 17, 1919-Sept. 25, 1926.
Feb. 1, 1920 - Feb. 24, 1925.
Mar. 6, 1920-Sept. 25, 1921.
Jan 15, 1921-Sept. 25, 1927.
June 26, 1922-July 31, 1926.
June 16, 1924-Sept. 25, 1932.
Feb. 25, 1925-Oct. 7, 1933.
Aug. 2, 1926-Jan. 15, 1929.
Feb. 11, 1927-Jan. 23, 1933.
Nov. 14, 1927-Nov. 15, 1949.
Feb. 1, 1929-Aug. 28, 1945.
May 26, 1933-Oct. 23, 1949.
June 26, 1933-Sept. 25, 1933.
Oct. 10, 1933-June 30, 1934.
Oct. 27, 1933-June 30, 1934.
Aug. 23, 1930-Feb. 17, 1952.
Aug. 27, 1935-Dec. 31, 1948.
Oct. 15, 1945-.
Sept. 28, 1949-March 31, 1953
Nov. 16, 1949-.
Oct. 25, 1950-Sept. 25, 1953.
June 18, 1952-Sept. 25, 1954.
April 1, 1953-.
Sept. 26, 1953-.
Sept. 26, 1954-.

73

Types of Unfair Methods and Practices
The following list illustrates unfair methods of competition and unfair or deceptive acts and practices
condemned by the Commission from time to time in its orders to cease and desist. The list is not limited to
orders issued during the fiscal year. Because of space limitation it does not include all of the specific
practices outlawed by the Clayton Act and committed to the Commission's jurisdiction, namely, various
forms of price discrimination, exclusive-dealing and tying arrangements, competitive stock acquisition, and
certain kinds of competitive interlocking directorates.
1. The use of false or misleading advertising concerning, and the misbranding of, commodities,
respecting the materials or ingredients of which they are composed, their quality, purity, origin, source,
attributes, or properties, or nature of manufacture, and selling them under such name and circumstances as
to deceive the public. An important part of these include misrepresentation of the therapeutic and corrective
properties of medicinal preparations and devices, and cosmetics, and the false representation, expressly or
by failure to disclose their potential harmfulness, that such preparations may be safely used.
2. Describing various symptoms and falsely representing that they indicate the presence of diseases and
abnormal conditions which the product advertised will cure or alleviate.
3. Representing products to have been made in the United States when the mechanism or movements,
in whole or in important part, are of foreign origin.
4. Bribing buyers or other employees of customers and prospective customers, without employers'
knowledge or consent, to obtain or hold patronage.
5. Procuring the business or trade secrets of competitors by espionage, or by bribing their employees,
or by similar means.
6. Inducing employees of competitors to violate their contracts and enticing them away in such numbers
or under such circumstances as to hamper or embarrass the competitors in the conduct of their business.
7. Making false and disparaging statements respecting competitors' products and business, in some cases
under the guise of ostensibly disinterested and specially informed sources or through purported scientific,
hut in fact misleading, demonstrations or tests.
8. Widespread threats to the trade of suits for patent infringement arising from the sale by competitors
of alleged infringing products, not in good faith, but for the purpose of intimidating the trade and hindering
or stifling competition, and claiming, without justification, exclusive rights in public names of unpatented
products.
9. Conspiring to maintain uniform selling prices, terms and conditions of sale through the use of a patentlicensing system.
10. Trade boycotts or combinations of traders to prevent certain wholesale or retail dealers or certain
classes of such dealers from procuring goods at the same terms accorded to the boycotters or conspirators,
or through coercion to influence the trade policy of their competitors or of manufacturers from who they buy.
11. Passing off goods for products of competitors through appropriation or simulation of such
competitors' trade names, labels, dress of goods, or counterdisplay catalogs

74

12. Selling rebuilt, second-hand, renovated, or old products, or articles made in whole or in part from
used or second-hand materials, ns new, by so representing them or by failing to reveal that they are not new
or that second-hand materials have been used
13. Buying up supplies for the purpose of hampering competitors and stifling or eliminating competition.
14. Using concealed subsidiaries, ostensibly independent, to obtain competitive business otherwise
unavailable, and making use of false and misleading representations, schemes, and practices to obtain
representatives and make contracts, such as pretended puzzle-prize contests purportedly offering
opportunities to win handsome prizes, but which are in fact mere "come-on" schemes and devices in which
the seller's true identity and interest are initially concealed.
15. Selling or distributing punchboards and other lottery crevices which are to be or may be used in the
sale of merchandise by lot or chance; using merchandising schemes based on lot or chance, or on a pretended
contest of skill.
16. Combinations or agreements of competitors to fix, enhance, or depress prices, maintain prices, bring
about substantial uniformity in prices, or divide territory or business, to cut off or interfere with competitors'
sources of supply, or to close market to competitors; or use by trade associations of so-called standard cost
system, price lists, or guides, or exchange of trade information calculated to bring about these ends, or
otherwise restrain or hinder free competition.
17. Intimidation or coercion of producer or distributor to cause him to organize, Join, or contribute k,,
or to prevent him from organizing, joining, or contributing to, producers' cooperative association or other
association.
18. Aiding, assisting, or abetting unfair practice, misrepresentation, and deception, and furnishing meas
of instrumentalities therefor; and combining and conspiring to offer or sell products by chance or by
deceptive methods, through such practices as supplying dealers with lottery devices, or selling to dealers and
assisting them in conducting, contest schemes as a part of which pretended credit slips or certificates are
issued to contestants, when in fact the price of the goods has been marked up to absorb the face value of the
credit slip; arid the supplying of emblems or devices to conceal marks of country of origin of goods, or
otherwise to misbrand goods, as to country of origin.
19. Various methods to create the impression that the customer is being offered an opportunity to make
purchases under unusually favorable conditions when such is not the case, such devices including—
(a) Sales plans in which the seller’s usual price is falsely presented as a special reduced price for a
limited time or to a limited class, or false claim of special terms, equipment, or other privileges or
advantages.
(b) False or misleading use of the word “Free” in advertising.
(c) Use of misleading trade names calculated to create the impression that a dealer is a producer or
importer selling directly to the consumer, with resultant savings.
(d) Offering of false "bargains" by pretended cutting of a fictitious "regular" price.
(e) Use of false representations that an article offered has been rejected as nonstandard and is offered
at an exceptionally favorable price, or that the number thereof that may be purchased is limited.
(f) Falsely representing that goods are not being offered as sales in ordinary course, but are specially
priced and offered as a part; of a special advertising campaign to obtain customers, or for some purpose
other than the customary profit.
(g) Misrepresenting, or cursing dealers to misrepresent, the interest rate of carrying charge on
deferred payments
75

20. Using containers ostensibly of the capacity customarily associated by the purchasing public with
standard weights or quantities of the product therein contained, or using standard containers only partially
filled to capacity, so as to make it appear to the purchaser that he is receiving the standard weight or quantity.
21. Misrepresenting in various ways the necessity or desirability or the advantages to the prospective
customer of dealing with the seller, such as—
(a) Misrepresenting seller's alleged advantages of location or size, or the branches, domestic or
foreign, or the dealer outlets he has.
(b) Making false claim of being the authorized distributor of some concern, or failing to disclose the
termination of such relationship, in soliciting customers of such concern, or of being successor thereto
or connected therewith, or of being the purchaser of competitor's business, or falsely representing that
competitor's business has been discontinued, or falsely claiming the right to prospective customer's
special consideration through such false statements as that the customer's friends or his employer have
expressed a desire for, or special interest in, consummation of seller's transaction with the customer.
(c) Alleged connection of a concern, organization, association, or institute with, or endorsement of
it or its' product or service by, the Government or nationally, known organization, or representation that
the use of such product or services is required by the Government, or that failure to comply with such
requirement is subject to penalty.
(d) False claim by a vendor of being an importer, or a technician, or diagnostician, or a manufacturer,
grower, or nurseryman, or a distiller, or of being a wholesaler, selling to the consumer at wholesale
prices; or by a manufacturer of being also the manufacturer of the raw material entering into the product,
or by an assembler of being a manufacturer.
(e) Falsely claiming to be a manufacturer's representative and outlet for surplus stock sold at a
sacrifice.
(f) Falsely representing that the seller owns a laboratory in which the product offered is analyzed and
tested.
(g) Representing that ordinary private commercial seller and business is an association, or national
association, or connected therewith, or sponsored thereby, or is otherwise connected with noncommercial
or professional organizations or associations, or constitutes an institute, or, in effect, that it is altruistic
in purpose, giving work to the unemployed.
(h) Falsely claiming that business is bonded, or misrepresenting its age or history, or the demand
established for its products, or the selection afforded, or the quality or comparative value of its goods,
or the personnel or staff or personages presently or theretofore associated with such business or the
products thereof.
(i) Claiming falsely or misleadingly by patent, trade-mark, or other special and exclusive rights.
(j) Granting seals of approval by a magazine to products advertised therein and misrepresenting
thereby that such products have been adequately tested, and misrepresenting by other means the quality,
performance, and characteristics of such products.
22. Obtaining business through undertakings not carried out and not intended to be carried out, and
through deceptive, dishonest, and oppressive devices calculated to entrap and coerce the customer or
prospective customer, such practices including—
(a) Misrepresenting that seller fills orders promptly, ships kind of merchandise described, and assigns
exclusive territorial rights within definite trade areas to purchasers or prospective purchasers.
76

(b) Obtaining orders on the basis of samples displayed for customer's selection and failing or refusing
to respect such selection thereafter in filling of orders, or promising results impossible of fulfillment, or
falsely making promises or holding out guaranties, or the right of return, or results, or refunds,
replacements, or reimbursements or special or additional advantages to the prospective purchasers such
as extra credit, or furnishing of supplies or advisory assistance; or falsely assuring the purchaser or
prospective purchaser that certain special or exclusively personal favors or advantages are being granted
him.
(c) Concealing from prospective purchaser unusual features involved in purchaser's commitment,
the result of which will be to require of purchaser further expenditure in order to obtain benefit of
commitment and expenditure already made, such as failure to reveal peculiar or nonstandard shape of
portrait or photographic enlargement, so as to make securing of frame therefor from sources other than
seller difficult and impracticable, if not impossible.
(d) Obtaining by deceit prospective customer's signature to a contract and promissory note
represented as simply an order on approval.
(e) Making use of improper and coercive practices as means of exacting additional commitments
from purchasers, through such practices as unlawfully withholding from purchaser property of latter lent
to seller incident to carrying out of original commitment, such as practice of declining to return original
photograph from which enlargement has been made until purchaser has also entered into commitment
for frame therefor.
(f) Falsely representing earnings or profits of agents, dealers, or purchasers, or the terms or
conditions involved, such as false statement that participation by merchant in seller's sales promotion
scheme is without cost to merchant, and that territory assigned an agent, representative, or distributor
is new or exclusive.
(g) Obtaining agents or representatives to distribute the seller's products through falsely promising
to refund the money paid by them should the product prove unsatisfactory, or promising that the agent
would be granted right to exclusive or new territory, would be given assistance by seller, or would be
given special credit or furnished supplies, or overstating the amount of his earnings or the opportunities
which the employment offers.
(h) Advertising a price for a product as illustrated or described and not including in such price all
charges for equipment or accessories illustrated or described or necessary for use of the product or
customarily included as standard equipment, and failing to include all charges not specified as extra.
23. Giving products misleading names so as to give them as value to the purchasing public which they
would not otherwise possess, such as names implying falsely that—
(a) The products; were made for the Government or in accordance with its specifications and of
corresponding quality, or that the advertiser is connected with the Government in some way, or in some
way the products have been passed upon, inspected, underwritten, or endorsed by it; or
(b) They are composed in whole or in part of. ingredients or materials which in fact are present only
to a negligible extent or not at all, or that they have qualities or properties which they do not have; or
(c) They were made in or came from some locality famous for the quality of such products, or are
of national reputation; or
(d) They were made by some well and favorably known process; or
(e) They have been inspected, passed, or approved after meeting the tests of some official
organization charged with the duty of making such tests expertly and disinterestedly, or giving such
approval; or
77

(f) They were made under conditions or circumstances considered of importance by a substantial part
of the general purchasing public; or
(g) They were made in a country, or city, or locality considered of importance in connection with the
public taste, preference, or prejudice; or
(h) They have the usual characteristics of value of a product properly so designated, as through use of
a common, generic name, such as "paint," to designate a product lacking the necessary ingredients of paint;
or,
(i) They are of greater value, durability, and desirability than is the fact, as labeling rabbit fur as
"Beaver"; or
(j) They are designed, sponsored, produced, or approved by the medical profession, health and welfare
associations, hospitals, celebrities, educational institutions and authorities, such as the use of letters “M. D.”
and the words “Red Cross” and its insignia and words “Boy Scout.”
24. Selling below cost or giving products without charge, with intent and effect of hindering or
suppressing competition.
25. Dealing unfairly and dishonestly with foreign purchasers and thereby discrediting American
exporters generally.
26. Coercing and forcing uneconomic and monopolistic reciprocal dealing.
27. Entering into contracts in restraint of trade whereby foreign corporations agree not to export certain
products to the United States in consideration of a domestic company’s agreement not to export the same
commodity, nor to sell to anyone other than those who agree not to so export the same.
28. Employing various false and misleading representations and practices attributing to products a
standing, merit and value to the purchasing public, or a part thereof, which they do not possess, such
practices including—
(a) Misrepresenting, through salesmen or otherwise, products’ composition, nature, qualities, results
accomplished, safety, value and earnings or profits to be had therefrom.
(b) Falsely claiming unique status or advantages, or special merit therefor, on the basis of misleading
and ill-founded demonstrations or scientific tests, or pretended widespread tests, or of pretended
widespread and critical professional acceptance and use.
(c) Misrepresenting the history or circumstances involved in the marking and offer of the products
or the source or origin thereof (foreign or domestic), or of the ingredients entering therein, or parts
thereof, or the opportunities brought to the buyer through purchase of the offering, or otherwise
misrepresenting scientific or other facts bearing on the value thereof the purchaser.
(d) Falsely representing products as legitimate, or prepared in accordance with Government or
official standards or specifications.
(e) Falsely claiming Government or official or other acceptance, use, and endorsement of product,
and misrepresenting success and standing thereof through use of false and misleading endorsements or
false and misleading claims with respect thereto, or otherwise.
(f) Making use of a misleading trade name and representing by other means that the nature of a
business is different than is the fact, such as a collection agency engaged in tracing alleged delinquent
debtors representing itself to be a delivery system, an organization in search of missing heirs, or one
connected with a Government agency.
(g) Misrepresenting fabrics or garments as to fiber content; and, in the case of wool products, failing
to attach tags thereto indicating the wool, reused wool, reprocessed wool or other fibers contained
therein, and the identity of the manufacturer or qualified reseller, as required by the Wool
78

Products Labeling Act, or removing or mutilating tags required to be affixed to the products when they are
offered for sale to the public.
29. Failing and refusing to deal justly and fairly with customers in consummating transactions undertaken
through such practices as refusing to correct mistakes in filling orders or to make promised adjustments or
refunds, and retaining, without refund, goods returned for exchange or adjustment, and enforcing,
notwithstanding agents' alterations, printed terms of purchase contracts, and exacting payments in excess of
customers' commitments.
30. Shipping products at market prices to customers or prospective customers or to the customers or
prospective customers of competitors without an order and then inducing or attempting by various means to
induce the consignees to accept and purchase such consignments.
31. Inducing the shipment and sale of commodities through buyer's issuance of fictitious pl ice lists and
other printed matter falsely representing rising market conditions and demand, and leading seller to ship
under the belief that he would receive prices higher than the buyer intended to or did pay.
79

Statutes Pertaining to the Federal Trade Commission
The authority and powers of the Federal Trade Commission in the main are drawn from the following
statutes:
1. Federal Trade Commission Act, approved September 26, 1914 (38 Stat. 717), and subsequently
amended as indicated below.
2. Clayton Act, sections 2, 3, 7, 8 and 11, approved October 15, 1914 (35 Stat. 730, 731, 732), amended
as indicated below.
3. Webb-Pomerene Export Trade Act, approved April 10, 1918 (40 Stat. 510).
4. Wheeler-Lea Act, approved March 21, 1938 (52 Stat. 111), amending the Federal Trade Commission
Act.
5. Robinson-Patman Act, approved June 19, 1936, and amendment thereto approved May 26, 1938 (49
Stat. 1526; 52 Stat. 446), revising and extending section of the Clayton Act.
6. Wool Products Labeling Act of 1939, approved October 14, 1940 (54 Stat. 1128) .
7. Public Law 15, 79th Congress, approved March 9, 1945, "An Act to express the intent of the Congress
with reference to the regulation of the business of insurance" (59 Stat. 33).
8. Lanham Trade Mark Act, approved July 5, 1946 (60 Stat. 427).
9. Oleomargarine Act, approved March 16, 1960, amending Section 5 of the Federal Trade Commission
Act respecting civil penalties, and section 15 respecting misleading advertisement of oleomargarine or
margarine (64 Stat. 20).
10. Public Law 899, 81st Congress, approved December 29, 1950, the so-called antimerger legislation,
amending and extending section 7 of the Clayton list. (64 Stat. 1125).
11. Fur Products Labeling Act, approved August 8, 1951 (65 Stat. 175).
12. Flammable Fabrics Act, approved June 30, 1953, and amendment thereto approved August 23, 1954
(67 Stat. 111; 68 Stat. 770).

Federal Trade Commission Act*
(15 U. S. C., Secs. 41-58)
AN ACT To create a Federal Trade Commission, to define its powers and duties, and for other purposes
SEC. 1. Be it enacted by the Senate and House of Representatives of the United States of America in
Congress assembled, That a commission is hereby created and established, to be known as the Federal Trade
Commission (hereinafter referred to as the Commission), which shall be composed of five commissioners,
who shall be appointed by the President, by and with the advice and consent of the Senate. Not more than
three of the commissioners shall be members of the same political party. The first commissioners appointed
shall continue in office for terms of three, four, five, six, and seven years, respectively, from the date of the
taking effect; of this Act, the term of each to be designated by the President,
____________
* Published as last amended by the Federal Fair Trade, or McGuire, Act approved July 14, 1952. (See footnote 5
on p. 82.)

80

but their successors shall be appointed for terms of seven years, except that any person chosen to fill a
vacancy shall be appointed only for the unexpired term of the commissioner whom he shall succeed:
Provided, however, That upon the expiration of this term of office a commissioner shall continue to serve
until his successor shall have been appointed and shall have qualified. The Commission shall choose a
chairman from its own membership.1 No Commissioner shall engage in any other business, vocation, or
employment. Any commissioner may be removed by the President for inefficiency, neglect of duty, or
malfeasance in office. A vacancy in the Commission shall not impair the right of the remaining
commissioners to exercise all the powers of the Commission.
The Commission shall have an official seal, which shall be judicially noticed.
SEC. 2. That each commissioner shall receive a salary of $10,000 a year,2 payable in the same manner
as the salaries of the judges of the courts of the United States. The Commission shall appoint a secretary who
shall receive a salary of $5,000 a year,3 payable in like manner, and it shall have authority to employ and fix
the compensation of such attorneys, special experts, examiners, clerks, and other employees as it may form
time to time find necessary for the proper performance of its duties and as may from time to time be
appropriated for by Congress.
With the exception of the secretary, a clerk to each commissioner, the attorneys, and such special experts
and examiners as the Commission may from time to time and necessary for the conduct of its work, all
employees of the commission shall be a part of the classified civil service, and shall enter the service under
such rules and regulations as may be prescribed by the Commission and by the Civil Service Commission.
All of the expenses of the Commission, including all necessary expenses for transportation incurred by
the commissioners or by their employees under their orders, in making any investigation, or upon official
business in any other places than in the city of Washington, shall be allowed and path on the presentation
of itemized vouchers therefor approved by the Commission.
Until otherwise provided by law, the Commission may rent suitable offices for its use.
The Auditor for the State and Other Departments shall receive and examine all accounts of expenditures
of the Commission.4
SEC. 3. That upon the organization of the Commission and election of its chairman, the Bureau of
Corporations and the offices of Commissioner and Deputy Commissioner of Corporations shall cease to
exist; and all pending investigations and proceedings of the Bureau of Corporations shall be continued by
the Commission.
All clerks and employees of the said bureau shall be transferred to and become clerks and employees of
the Commission at their present grades and salaries. All records, papers, and property of the said bureau shall
become records, papers, and property of the Commission, and all unexpended funds and appropriations for
the use and maintenance of the said bureau, including any allotment already made to it by the Secretary of
Commerce from the contingent appropriation for the
___________
1

Under Reorganization Plan No. 8 of 1950, which became effective May 24, 1950, pursuant to the Reorganization
Act of 1949, the power to appoint the chairman was transferred to the President. The plan also transferred to the
chairman, subject to specified limitations, the executive and administrative functions formerly exercised by the
Commission as a whole.
2
The salaries of the commissioners were increased to $15,000 a year under the provisions of Public Law 359, 81st
Cong., approved October 15, 1949.
3
The salary of the secretary is controlled by the provisions of the Classification Act of 1923, approved March 4,
1923, 42 Stat, 1488.
4
Auditing of accounts was made a duty of the General Accounting Office by the Act of June 10, 1921, 42 Stat. 24.

81

Department of Commerce for the fiscal year nineteen hundred and fifteen, or from the departmental printing
fund for the fiscal year nineteen hundred and fifteen, shall become funds and appropriations available to be
expended by the Commission in the exercise of the powers, authority, and duties conferred on it by this Act.
The principal office of the Commission shall be in the city of Washington, but it may meet and exercise
all its powers at any other place. The Commission may, by one or more of its members, or by such examiners
as it may designate, prosecute any inquiry necessary to its duties in any part of the United States.
SEC. 4. The words defined in this section shall have the following meaning when found in this Act, to
wit:
"Commerce" means commerce among the several States or with foreign nations, or in any Territory of
the United States or in the District of Columbia, or between any such Territory and another, or between any
such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory
or foreign nation.
"Corporation" shall be deemed to include any company, trust, so-called Massachusetts trust, or
association, incorporated or unincorporated, which is organized to carry on business for its own profit or that
of its members, and has shares of capital or capital stock; or certificates of interest, and any company, trust,
so-called Massachusetts trust, or association. incorporated or unincorporated, without shares of capital or
capital stock or certificates of interest, except partnerships, which is organized to carry on business for its
own profit or that of its members.
"Documentary evidence" includes all documents, papers, correspondence, books of account, and
financial and corporate records.
"Acts to regulate commerce" means the Act entitled "An Act to regulate commerce," approved February
14, 1887, and all Acts amendatory thereof and supplementary thereto and the Communications Act of 1934
and all Acts amendatory thereof and supplementary thereto.
"Antitrust Acts" means the Act entitled "An Act to protect trade and commerce against unlawful
restraints and monopolies," approved July 2, 1890; also sections 73 to 77, inclusive, of an Act entitled "An
Act to reduce taxation, to provide revenue for the Government, and for other purposes," approved August
27, 1894; also the Act entitled "An Act to amend sections 73 and 76 of the Act of August 27, 1894, entitled
'An Act to reduce taxation, to provide revenue for the Government, and for other purposes,"' approved
February 12, 1913; and also the Act entitled "An Act to supplement existing laws against unlawful restraints
and monopolies, and for other purposes," approved October 15, 1914.
SEC. 5. (a)5 (1) Unfair methods of competition in commerce, and unfair or deceptive acts or practices
in commerce, are hereby declared unlawful.
(2) Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful any contracts or
agreements prescribing minimum or stipulated prices, or requiring a vendee to enter into contracts or
agreements prescribing minimum or stipulated prices, for the resale of a commodity which bears, or the later
or container of which bears, the trade-mark, bland, or name of the producer or distributor of such commodity
and which is in free and open competition with commodities of the same general class produced or
distributed by others, when contracts or agreements of that description are lawful as applied to intrastate
transactions under any statute, law, or public policy now or hereafter in effect in any State, Territory, or the
District of Columbia in
_____________
5

Sec. 5 (a) is published as amended by Public Law 542, 82d Cong., ch. 745, 2d Sess., H. R. 5767, Approved July
14, 1952, 66 Stat. 631.; 15 U. S. C. 47 (Federal Fair Trade Act [McGuire Act] ).

82

which such resale is to be made, or to which the commodity is to be transported for such resale.
(3) Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful the exercise or the
enforcement of any right or right of action created by any statute, lav, or public policy now or hereafter in
effect in any State, Territory, or the District of Columbia, which in substance provides that willfully and
knowingly advertising, offering for sale, or selling any commodity at less than the price or prices prescribed
in such contracts or agreements whether the person so advertising, offering for sale, or selling is or is not a
party to such a contract or agreement, is unfair competition and is actionable at the suit of any person
damaged thereby.
(4) Neither the making of contracts or agreements as described in paragraph (2) of this subsection, nor
the exercise or enforcement of any right or right of action as described in paragraph (3) of this subsection
shall constitute an unlawful burden or restraint upon, or interference with, commerce.
(5) Nothing contained in paragraph (2) of this subsection shall make lawful contracts or agreements
providing for the establishment or maintenance of minimum or stipulated resale prices on any commodity
referred to in paragraph (2) of this subsection, between manufacturers, or between producers, or between
wholesalers, or between brokers, or between factors, or between retailers, or between persons, firms, or
corporations in competition with each other.
(6) The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations,
except banks, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers
subject to the Civil Aeronautics Act of 1938, and persons, partnerships, or corporations subject to the Packers
and Stockyards Act, 1921, except as provided in section 406 (b) of said Act, from using unfair methods of
competition in commerce and unfair or deceptive acts or practices in commerce.
(b) Whenever the Commission shall have reason to believe that any such person, partnership, or
corporation has been or is using any unfair method of competition or unfair or deceptive act or practice in
commerce, and if it shall appear to the Commission that a proceeding by it in respect thereof would be to the
interest of the public, it shall issue and serve upon such person, partnership, or corporation a complaint
stating its charges in that respect and containing a notice of a hearing upon a day and at a place therein fixed
at least thirty days after the service of said complaint. The person, partnership, or corporation so complained
of shall have the right to appear at the place and time so fixed and show cause why an order should not be
entered by the Commission requiring such person, partnership, or corporation to cease and desist from the
violation of the law so charged in said complaint. Any person, partnership, or corporation may make
application, and upon good cause shown may be allowed by the Commission to intervene and appear in said
proceeding by counsel or in person. The testimony in any such proceeding shall be reduced to writing and
filed in the office of the Commission. If upon such hearing the Commission shall be of the opinion that the
method of competition or the act or practice in question is prohibited by this Act, it shall make a report in
writing in which it shall state its findings as to the facts and shall issue and cause to be served on such
person, partnership, or corporation an order requiring such person, partnership, or corporation to cease and
desist from using such method of competition or such act or practice. Until the expiration of the time allowed
for filing a petition for review, if no such petition has been duly filed within such time, or, if a petition for
review has been filed within such time then until the transcript of the record in the proceeding has been filed
in a circuit court of' appeals of the United States, as hereinafter provided, the Commission may at any time,
upon
83

such notice and in such manner as it shall deem proper, modify or set aside, in whole or in part, any report
or any order made or issued by it under this section. After the expiration of the time allowed for filing a
petition for review, if no such petition has been duly filed within such time, the Commission may at any time,
after notice and opportunity for hearing, reopen and alter, modify, or set aside, in whole or in part, any report
or order made or issued by it under this section, whenever in the opinion of the Commission conditions of
fact or of law have so changed as to require such action or if the public interest shall so require: Provided,
however, That the said person, partnership, or corporation may, within sixty days after service upon him or
it of said report or order entered after such a reopening, obtain a review thereof in the appropriate circuit
court of appeals of the United States, in the manner provided ill subsection (c) of this section.
(c) Any person, partnership, or corporation required by an order of the Commission to cease and desist
from using any method of competition or act or practice may obtain a review of such order in the circuit court
of appeals of the United States, within any circuit where the method of competition or the act or practice in
question was used or where such person, partnership, or corporation resides or carries on business, by filing
in the court, within sixty days6 from the date of the service of such order, a written petition praying that the
order of the Commission be set aside. A copy of such petition shall be forthwith served upon the
Commission, and thereupon the Commission forthwith shall certify and file in the court a transcript of the
entire record in the proceeding, including all the evidence taken and the report and order of the Commission.
Upon such filing of the petition and transcript the court; shall have jurisdiction of the proceeding and of the
question determined therein, and shall have power to make and enter upon the pleadings, evidence, and
proceedings set forth in such transcript a decree affirming, modifying, or setting aside the order of the
Commission, and enforcing the same to the extent that such order is affirmed, and to issue such writs as are
ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public or to competitors
pendente lite. The findings of the Commission as to the facts, if supported by evidence, shall be conclusive.
To the extent that the order of the Commission is affirmed, the court shall thereupon issue its own order
commanding obedience to the terns of such order of the Commission. If either party shall apply to the court
for leave to adduce additional evidence, and shall show to the satisfaction of the court that such additional
evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the
proceeding before the Commission, the court may order such additional evidence to be taken before the
Commission and to the adduced upon the hearing in such manner and upon such terms and conditions as to
the court may seem proper. The Commission may modify its findings as to the facts, or make new findings,
by reason of the additional evidence so taken, and it shall file such modified or new findings, which, if
supported by evidence, shall be conclusive, and its recommendation, if any, for the modification or setting
aside of its original order, with the return of: such additional evidence. The judgment and decree of the court
shall be final, except that the sane shall be subject to review by the Supreme Court upon certiorari, as
provided in section 240 of the Judicial Code.
(d) The jurisdiction of the circuit court of appeals of the United States to affirm, enforce, modify, or set
aside orders of the Commission shall be exclusive.
_____________
6

Section 5 (a) of the amending Act of 1938 provides:
SEC. 5. (a) In case of an order by the Federal Trade Commission to cease and desist, served on or before the date
of enactment of this Act, the sixty-day period referred to in section 5 (c) of the Federal Trade Commission Act, as
amended by this Act, shall begin on the date of the enactment of this Act.

84

(e) Such proceedings in the circuit court of appeals shall be given precedence "over other cases pending
therein, and shall be in every way expedited. No order of the Commission or judgment of court to enforce
the same shall in anywise relieve or absolve any person, partnership, or corporation from any liability under
the Antitrust; Acts.
(f ) Complaints, orders, and other processes of the Commission under this section may be served by
anyone duly authorized by the Commission, either (a) by delivering a copy thereof to the person to be served,
or to a member of the partnership to be served, or the president, secretary, or other executive officer or
director of the corporation to be served; or (b) by leaving a copy thereof at the residence or the principal
office or place of business of such person, partnership, or corporation; or (c) by registering and mailing a
copy thereof addressed to such person, partnership, or corporation at his ,or its residence or principal office
or place of business. The verified return by the person so serving said complaint, order, or other process
setting forth the manner of said service shall be proof of the same, and the return post office receipt for said
complaint, order, or other process registered and mailed as aforesaid shall be proof of the service of the same.
(g) An order of the Commission to cease and desist shall become final—
(1) Upon the expiration of the time allowed for filing a petition for review, if no such petition has
been duly filed within such time; but the Commission may thereafter modify or set aside its order to the
extent provided in the last sentence or subsection (b); or
(2) Upon the expiration of the time allowed for filing a petition for certiorari, if the order of the
Commission has been affirmed, or the petition for review dismissed by the circuit court of appeals, and
no petition for certiorari has been duly filed; or
(3) Upon the denial of a petition for certiorari, if the order of the Commission has been affirmed or
the petition for review dismissed by the circuit court of appeals; or
(4) Upon the expiration of thirty days from the date of issuance of the mandate of the Supreme Court,
if such Court directs that the order of the Commission be affirmed or the petition for review dismissed.
(h) If the Supreme Court directs that the order of the Commission be modified or set aside, the order of
the Commission rendered in accordance with the mandate of the Supreme Court shall become final upon the
expiration of thirty days from the time it was rendered, unless within such thirty days either party has
instituted proceedings to have such order corrected to accord with the mandate, in which event the order of
the Commission shall become final when so corrected.
(i) If the order of the Commission is modified or set aside by the circuit court of appeals, and if (1) the
time allowed for filing a petition for certiorari has expired and no such petition has been duly filed, or (2)
the petition for certiorari has been denied, or (3) the decision of the court has been affirmed by the Supreme
Court, then the order of the Commission rendered in accordance with the mandate of the circuit court of
appeals shall become final on the expiration of thirty days from the time such order of the Commission was
rendered, unless within such thirty days either party has instituted proceedings to have such order corrected
so that it will accord with the mandate, in which event the order of the Commission shall become final when
so corrected.
(j) If the Supreme Court orders a rehearing; or if the case is remanded by the circuit court of appeals to
the Commission for a rehearing, and if (1) the time allowed for filing a petition for certiorari has expired,
and no such petition has been duly filed, or (2) the petition for certiorari has been denied, or (3) the decision
the court has been affirmed by the Supreme Court, then the order
85

of the Commission rendered upon such rehearing shall become final in the same manner as though no prior
order of the Commission has been rendered.
(k) As used in this section the term "mandate," in case a mandate has been recalled prior to the expiration
of thirty days from the date of issuance thereof, means the final mandate.
(1) Any person, partnership, or corporation who violates an order to the Commission to cease and desist
after it has become final, and while such order is in effect, shall forfeit and pay to the United States a civil
penalty of not more than $5,000 for each violation, which shall accrue to the United States and may be
recovered in a civil action brought by the United States. Each separate violation of such an order shall be a
separate offense, except that in the. case of a violation through continuing failure or neglect to obey a final
order of the Commission each day of continuance of such failure or neglect shall be deemed s separate
offense.7
SEC. 6. That the commission shall also have power—
(a) To gather and compile information concerning, and to investigate from time to time the organization,
business, conduct, practices, and management of any corporation engaged in commerce, excepting banks and
common carriers subject to the Act to regulate commerce, and its relation to other corporations and to
individuals, associations, and partnerships.
(b) To require, by general or special orders, corporations engaged in commerce, excepting banks, and
common carriers subject to the Act to regulate commerce, or any class of them, or any of them, respectively,
to file with the commission in such form as the commission may prescribe annual or special, or both annual
and special, reports or answers in writing to specific questions, furnishing to the commission such
information as it may require as to the organization, business, conduct, practices, management, and relation
to other corporations, partnerships, and individuals of the respective corporations fling such reports or
answers in writing. Such reports and answers shall be made under oath, or otherwise, as the commission
may prescribe, and shall be filed with the commission within such reasonable period as the commission may
prescribe, unless additional time be granted in any case by the commission.
(c) Whenever a final decree has been entered against any defendant corporation in any suit brought by
the United States to prevent and restrain any violation of the antitrust Acts, to make investigation, upon its
own initiative, of the manner in which the decree has been or is being carried out, and upon the application
of the Attorney General it shall be its duty to make such investigation. It shall transmit to the Attorney
General a report embodying its findings and recommendations as a result of any such investigation and the
report shall be made public in the discretion of the commission.
(d) Upon the direction of the President or either House of Congress to investigate and report the facts
relating to any alleged violations of the antitrust Acts by any corporation.
(e) Upon the application of the Attorney General to investigate and make recommendations for the
readjustment of the business of any corporation alleged to be violating the antitrust Acts in order that the
corporation may thereafter
____________
7

This sentence added by see. 4 (e) of Public Law 459, 81st Cong., approved March 16, 1950. and effective July
1 1950.
8
The independent Offices Appropriation Act of 1934 provided that future investigation by the Commission for
Congress must be authorized by concurrent resolution of the two houses. Under the Appropriation Act of 1951, funds
appropriated for the Commission are not to be spent upon any investigation thereafter called for by congressional
concurrent resolution "until funds are appropriated subsequently to the enactment of such resolution to finance the cost
of such Investigation."

86

maintain its organization, management, and conduct of business in accordance with law.
(f) To make public from time to time such portions of the information obtained by it hereunder, except
trade secrets and names of customers, as it shall deem expedient in the public interest; and to make annual
and special reports to the Congress and to submit therewith recommendations for additional legislation; and
to provide for the publication of its reports and decisions in such form and manner as may be best adapted
fol public information and use.
(g) From time to time to classify corporations and to make rules and regulations for the purpose of
carrying out the provisions of this Act.
(h) To investigate, from time to time, trade conditions in and with foreign countries where associations,
combinations, or practices of manufacturers, merchants, or traders, or other conditions, may affect the foreign
trade of the United States, and to report to Congress thereon, with such recommendations as it deems
advisable.
SEC. 7. That in any suit in equity brought by or under the direction of the Attorney General as provided
in the antitrust Acts, the court may, upon the conclusion of the testimony therein if it shall be then of the
opinion that the complainant is entitled to relief, refer said suit to the commission, as a master in chancery,
to ascertain and report an appropriate form of decree therein. The commission shall proceed upon such
notice to the parties and under such rules of procedure as the court may prescribe, and upon the coming in
of such report such exceptions may be filed and such proceedings had in relation thereto as upon the report
of a master in other equity causes, but the court may adopt or reject such report, in whole or in part, and
enter such decree as the nature of the case may in its judgment require.
SEC. 8. That the several departments and bureaus of the Government when directed by the President
shall furnish the commission, upon its request, all records, papers, and information in their possession
relating to any corporation subject to any of the provisions of this Act, and shall detail from time to time such
officials and employees to the commission as he may direct.
SEC. 9. That for the purposes of this Act the commission, or its duly authorized agent or agents, shall
at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary
evidence of any corporation being investigated or proceeded against; and the commission shall have power
to require by subpoena the attendance and testimony of witnesses and the production of all such documentary
evidence relating to any matter under investigation. Any member of the commission may sign subpoenas,
and members and examiners of the commission may administer oaths and affirmations, examine witnesses,
and receive evidence.
Such attendance of witnesses, and the production of such documentary evidence, may be required from
any place in the United States, at any designated place of hearing. And in case of disobedience to a subpoena
the commission may invoke the aid of any court of the United States in requiring the attendance and
testimony of witnesses and the production of documentary evidence.
Any of the district. courts of the United States within the jurisdiction of which such inquiry is carried
on may, in case of contumacy or refusal to obey a subpoena issued to any corporation or other person, issue
an order requiring such corporation or other person to appear before the commission, or to produce
documentary evidence if so ordered, or to give evidence touching the matter in question; and any failure to
obey such order of the court may be punished by such court as a contempt thereof.
Upon the application of the Attorney General of the United States, at the request of the commission, the
district courts of the United States shall have
87

jurisdiction to issue writs of mandamus commanding any person or corporation to comply with the provisions
of this Act or any order of the commission made in pursuance thereof.
The commission may order testimony to be taken by deposition in any proceeding or investigation
pending under this Act; at any stage of such proceeding or investigation. Such depositions may be taken
before any person designated by the commission and having power to administer oaths. Such testimony shall
be reduced to writing by the person taking the deposition, or under his direction, and shall then be subscribed
by the deponent. Any person may be compelled to appear and depose and to produce documentary evidence
in the sane manner as witnesses may be compelled to appear and testify and produce documentary evidence
before the commission as hereinbefore provided.
Witnesses summoned before the commission shall be paid the same fees and mileage that are paid
witnesses in the courts of the United States, and witnesses whose depositions are taken, and the persons
taking the same shall severally be entitled to the same fees as are paid for like services in the courts of the
United States.
No person shall be excused from attending and testifying or from producing documentary evidence
before the commission or in obedience to the subpoena of the commission on the ground or for the reason
that the testimony or evidence, documentary or otherwise, required of him may tend to criminate him or
subject him to a penalty or forfeiture. But no natural person shall be prosecuted or subjected to any penalty
or forfeiture for or on account of any transaction, matter, or thing concerning which he may testify, or
produce evidence, documentary or otherwise, before the commission in obedience to a subpoena issued by
it; Provided, That no natural person so testifying shall be exempt from prosecution and punishment for
perjury committed in so testifying.
SEC. 10. That any person who shall neglect or refuse to attend and testify, or to answer any lawful
inquiry, or to produce documentary evidence, if in his power to do so, in obedience to the subpoena or lawful
requirement of the commission, shall be guilty of an offense and upon conviction thereof by a court of
competent jurisdiction shall be punished by a fine of not less than $1,000 nor more than $,5,000, or by
imprisonment for not more than one year, or by both such fine and imprisonment.
Any person who shall willfully make, or cause to be made, any false entry or statement of fact in any
report required to be made under this Act, or who shall willfully make, or cause to be made, any false entry
in any account, record. or memorandum kept by any corporation subject to this Act, or who shall willfully
neglect or fail to make, or cause to be made, full, true, and correct entries in such accounts, records, or
memoranda of all facts and transactions appertaining to the business of such corporation, or who shall
willfully remove out of the jurisdiction of the United States, or wilfully mutilate, alter, or by any other means
falsify any documentary evidence of such corporation, or who shall willfully refuse to submit to the
commission or to any of its authorized agents, for the purpose of inspection and taking copies, any
documentary evidence of such corporation in his possession or within his control, shall be deemed guilty of
an offense against the United States, and shall be subject, upon conviction in any court of the United States
of competent jurisdiction, to a fine of not less than $1,000 nor more than $5,000 or to imprisonment for a
term of not more than three years, or to both such fine and imprisonment.
If any corporation required by this Act to file any annual or special report shall fail so to do within the
time fixed by the Commission for filing the same, and such failure shall continue for thirty days after notice
of such
88

default, the corporation shall forfeit to the United States the sum of $100 for each and every day of the
continuance of such failure, which forfeiture shall be payable into the Treasury of the United States, and shall
be recoverable in a civil suit in the name of the United States brought in the district where the corporation
has its principal office or in any district in which it shall do business. It shall be the duty of the various
district attorneys, under the direction of the Attorney General of the United States, to prosecute for the
recovery of forfeitures. The costs and expenses of such prosecution shall be paid out of the appropriation
for the expenses of the courts of the United States.
Any officer or employee of the commission who shall make public any information obtained by the
commission without its authority, unless directed by a court, shall be deemed guilty of a misdemeanor, and,
upon conviction thereof, shall be punished by a fine not exceeding $5,000, or by imprisonment not exceeding
one year, or by fine and imprisonment, in the discretion of the court.
SEC. 11. Nothing contained in this Act shall be construed to prevent or interfere with the enforcement
of the provisions of the antitrust Acts or the Acts to regulate commerce, nor shall anything contained in the
Act be construed to alter, modify, or repeal the said antitrust Acts or the Acts to regulate commerce or any
part or parts thereof.
SEC. 12. (a) It shall be unlawful for any person, partnership, or corporation to disseminate, or cause to
be disseminated, any false advertisement—
(1) By United States mails, or in commerce by any means for the purpose of inducing, or which is
likely to induce, directly or indirectly, the purchase of food, drugs, devices, or cosmetics; or
(2) By any means, for the purpose of inducing, or which is likely to induce directly or indirectly, the
purchase in commerce of food, drugs, devices, or cosmetics.
(b) The dissemination or the causing to be disseminated of any false advertisement within the provisions
of subsection (a) of this section shall be an unfair or deceptive act or practice in commerce within the
meaning of section 5.
SEC. 13. (a) Whenever the Commission has reason to believe—
(1) that any person, partnership, or corporation is engaged in, or is about to engage in, the
dissemination or the causing of the dissemination of any advertisement in violation of section 12, and
(2) that the enjoining thereof pending the issuance of a complaint by the Commission under section
5, and until such complaint is dismissed by the Commission or set aside by the court on review, or the
order of the Commission to cease and desist made thereon has become final within the meaning of
section 5, would be to the interest of the public,
the Commission by any of its attorneys designated by it for such purpose may bring suit in a district court
of the United States or in the United States court of any Territory, to enjoin the dissemination or the causing
of the dissemination of such advertisement. Upon proper shoving a temporary in junction or restraining order
shall be granted without bond. Any such suit shall be brought in the district in which such person,
partnership, or corporation resides or transacts business.
(b) Whenever it appears to the satisfaction of the court in the case of a news. paper, magazine, periodical,
or other publication, published at regular intervals—
(1) that restraining the dissemination of a false advertisement in any particular issue of such
publication would delay the delivery of such issue after the regular time therefor, and
(2) that such delay would be due to the method by which the manufacture and distribution of such
publication is customarily conducted by the publisher in accordance with sound business practice, and
not to any method
382867—56——7

89

or device adopted for the evasion of this section or to prevent or delay the issuance of an injunction or
restraining order with respect to such false advertisement or any other advertisement.
the court shall exclude such issue from the operation of the restraining order or injunction.
SEC. 149 (a) Any person, partnership, or corporation who violates any provision of section 12 (a) shall,
if the use of the commodity advertised may be injurious to health because of results from such use under the
conditions prescribed in the advertisement thereof, or under such conditions as are customary or usual, or
if such violation is with intent to defraud or mislead, be guilty of a misdemeanor, and upon conviction shall
be punished by a fine of not more than $5,000 or by imprisonment for not more than six months, or by both
such fine and imprisonment; except that if the conviction is for a violation committed after a first conviction
of such person, partnership or corporation, for any violation of such section, punishment shall be by a fine
of not more than $10,000 or by imprisonment for not more than one year, or by troth such fine and
imprisonment: Provided, That for the purposes of this section meats and meat food products duly inspected,
marked, and labeled in accordance with rules and regulations issued under the Meat Inspection Act approved
March 4, 1907, as amended, shall be conclusively presumed not injurious to health at the tine the same leave
official "establishments."
(b) No publisher, radio-broadcast licensee, or agency or medium for the dissemination of advertising
except the manufacturer, packer, distributor, or seller of the commodity to which the false advertisement
relates, shall be liable under this section by reason of the dissemination by him of any false advertisement,
unless he has refused on the request of the Commission, to furnish the Commission the name and post-office
address of the manufacturer, packer, distributor, seller, or advertising agency, residing in the United States,
who caused him to disseminate such advertisement. No advertising agency shall be liable under this section
by reason of the causing by it of the dissemination of any false advertisement, unless it has refused, on the
request of the Commission, to furnish the Commission the name and post-office address of the manufacturer,
packer, distributor, or seller, residing in the United States, who caused it to cause the dissemination of such
advertisement.
SEC. 15. For the purpose of sections 12, 13, and 14—
(a) (1) The term "false advertisement'' means an advertisement, other than labeling, which is misleading
in a material respect; and in determining whether any advertisement is misleading, there shall be taken into
account (among other things) not only representations made or suggested by statement, word, design, device,
sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts
material in the light of such representations or material with respect to consequences which may result from
the use of the commodity to which the advertisement relates under the conditions prescribed in said
advertisement or, under such conditions as are customary or usual. No advertisement of a drug shall be
deemed to be false if it is disseminated only to members of the medical profession, contains no false
representations of a material fact, and includes, or is accompanied in each instance by truthful disclosure of,
the formula showing quantitatively each ingredient of such drug.
________________
9

Section 5 (b) of the amending Act of 1938 provides:
SEC. 5. (b) Section 14 of the Federal Trade Commission Act, added to such Act by section 4 of this Act, shall take
effect on the expiration of sixty days after the date of the enactment of this Act.

90

(2)10 In the case of oleomargarine or margarine an advertisement shall be deemed misleading in a
material respect if in such advertisement representations are made or suggested by statement, word, grade
designation, design, device, symbol, sound, or any combination thereof, that such oleomargarine or margarine
is a dairy product, except that nothing contained herein shall prevent a truthful, accurate, and full statement
in any such advertisement of all the ingredients contained in such oleomargarine or margarine.
(b) The term "food" means (1) articles used for food or drink for man or other animals, (2) chewing gum,
and (3) articles used for components of any such article.
(c) The term "drug" means (1) articles recognized in the official United States Pharmacopoeia, official
Homeopathic Pharmacopoeia of the United States, or official National Formulary, or any supplement to any
of them; and (2) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of
disease in man or other animals; and (3) articles (other than food) intended to affect the structure or any
function of the body of manor other animals; and (4) articles intended for use as a component of any article
specified in clause (1), (2), or (3); but does not include devices or their components, parts, or accessories.
(d) The term "device" (except when used in subsection (a) of this section) means instruments, apparatus,
and contrivances, including their parts and accessories, intended (1) for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease in man or in other animals; or (2) to affect the structure or any function
of the body of man or other animals.
(e) The term “cosmetic” means (1) articles to be rubber, poured, sprinkled, or sprayed on, introduced
into, or otherwise applied to the human body or any part thereof intended for cleansing, beautifying,
promoting attractiveness, or altering the appearance, and (2) articles intended for use as a component of any
such articles; except that such term shall not include soap.
(f)10 For the purposes of this section and section 407 of the Federal Food, Drug, and Cosmetic Act, as
amended, the term “oleomargarine” or “margarine” includes—
(1) all substances, mixtures, and compounds know as oleomargarine or margarine;
(2) all substances, mixtures, and compounds which have a consistence similar to that of butter and
which contain any edible oils or fats other than milk fat if made in imitation or semblance of butter.
SEC. 16. Whenever the Federal Trade Commission has reason to believe that any person, partnership,
or corporation is liable to a penalty under section 14 or under subsection ( 1 ) of section 5, it shall certify the
facts to the Attorney General, whose duty it shall be to cause appropriate proceedings to be brought for the
enforcement of the provisions of such section or subsection.
SEC. 17. If any provision of this Act, or the application thereof to any person, partnership, corporation,
or circumstance, is held invalid, the remainder of the Act and the application of such provision to any other
per son, partnership, corporation, or circumstance shall not be affected thereby.
SEC. 18. This Act may be cited as the “Federal Trade Commission Act.”
Original act approved September 26, 1914.
Amended act approved March 21, 1938.
________
10

This subsection added by sec. 4 (a) of Public Law 459, 81st Cong., approved March 6, 1950, and effective July 1,
1950.

91

Clayton Act

1

(Approved in original form Oct. 14,1914; 38 Stat. 730; 15 U. S. C. Sec. 12, et. seq.)
[PUBLIC—No. 212—63D CONGRESS, AS AMENDED BY PUBLIC—No. 692—74TH
CONGRESS,1 AND PUBLIC—No. 899—81ST CONGRESS]
[H. R. 15657]
AN ACT To supplement existing laws against unlawful restraints and monopolies, and for other purposes

Be it enacted by the Senate and house of Representatives of the United States of America in Congress
assembled, That “antitrust laws,” as used herein, includes the Act entitled “An Act to protect trade and
commerce against unlawful restraints and monopolies,” approved July second, eighteen hundred and ninety;
sections seventy-three to seventy-seven, inclusive, of an Act entitled “An Act to reduce taxation, to provide
revenue for the Government, and for other purposes,” of August twenty-seventh, eighteen hundred and
ninety-four; an Act entitled “An Act to amend sections seventy-three and seventy-six of the Act of August
twenty-seventh, eighteen hundred and ninety-four, entitled “An Act to reduce taxation, to provide revenue
for the Government, and for other purposes,’” approved February twelfth, nineteen hundred and thirteen; and
also this act.
“Commerce,” as used herein means trade or commerce among the several States and with foreign nations,
or between the District of Columbia or any Territory of the United States and any State. Territory of foreign
nation, or between an insular possessions or other places under the jurisdiction of the Untied States, or
between any such possession or place and any State or Territory of the United States or the District of
Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession
or other place under the jurisdiction of the United States: Provided, That nothing in this Act contained shall
apply to the Philippine Islands.
The word “person” or “persons” whenever sued in this Act shall be deemed to include corporations and
associations existing under or authorized by the laws of either the United States, the laws of any of the
Territories the laws of any State, or the laws of any foreign country.
SEC. 2.2 (a) That it shall be unlawful for any person engaged in commerce, in the course of such
commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities
of like grade and quality, where either or any of the purchases involved in such discrimination are in
commerce, where such commodities are sold for sue, consumption, or resale within the Untied States or any
Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction
of the United States, and where the effect of such discrimination may be substantially to lessen competition
or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any
person who either g rants or knowingly receives the benefit of such discrimination, or with customers of
either of them: Provided, That nothing herein contained shall prevent differentials which make only due
allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods
or quantities
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1
The Robinson-Patman Act, approved June 19, 1936, 49 Stat. 1526; 15 U. S. C., Sec. 13 (see footnote 2). See also
footnote 4 on page 96 and footnote 8 on page 101, with respect to the repeal of Section 9, Section 17 in part, Sections
18 and 19, and Sections 21-23, inclusive, by two acts of June 25, 1948, namely, C. 645 (62 Stat. 683) and C. 646 (62
Stat. 896); and footnotes on pages 94 and 97 concerning the amendment of Sections 7 and 11 by act of Dec. 29, 1950,
C. 1184 (64 stat. 1125).
2
This section of the Clayton Act contains the provisions of the Robinson-Patman Anti-Discrimination Act, approved
June 19, 1936, amending Section 2 of the original Clayton Act, approved Oct. 15, 1914.
Section 4 of the Robinson-Patman act provides that nothing therein “shall prevent a cooperative association from
returning to its members, producers, or consumers the whole, or any part of, the net earnings or surplus resulting form
its trading operations, in proportion to their purchases ro sales from, to, or through the association.”
Public, No. 550. 75th Congress, approved May 26, 1938, to amend the said Robinson-Patman Act, further provides
that nothing therein “shall apply to purchases of their supplies for their own use by schools, colleges, universities, public
libraries, churches, hospitals, and charitable institutions not operated for profit.”

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in which such commodities are to such purchasers sold or delivered: Provided, however, That the Federal
Trade Commission may, after due investigation and hearing to all interested parties, fix and establish quantity
limits, and revise the same as it finds necessary, as to particular commodities or classes of' commodities,
where it finds that available purchasers in greater quantities are so few as to render differentials on account
thereof unjustly discriminatory or promotive of monopoly in any line of commerce; and the foregoing shall
then not be construed to permit differentials based on differences in quantities greater than those so fixed
and established: And provided further, That nothing herein contained shall pr event persons engaged in
selling goods, wares, or merchandise in commerce from selecting their own customers in bona tide
transactions and not in restraint of trade: And provided further, That nothing herein contained shall prevent
price changes from time to time where in response to changing conditions affecting the market for or the
marketability of the goods concerned, such as but not limited to actual or imminent deterioration of
perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith
in discontinuance of business in the goods concerned.
(b) Upon proof being made, at any hearing on a complaint under this section, that there has been
discrimination in price of services or facilities furnished the burden of rebutting the prima facie case thus
made by showing justification shall be upon the person charged with a violation of this section, and unless
justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the
discrimination: Provided however, That nothing herein contained shall prevent a seller rebutting the prima
facie case thus made by showing that his lower price or the furnishing of services or facilities to any
purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services
or facilities furnished by a competitor.
(c) That it shall be unlawful for any person engaged in commerce, in the course of such commerce, to
pay or grant, or to receive or accept. anything of value as a commission, brokerage, or other compensation,
or any allowance Gr discount in lieu thereof, except for services rendered in connection with the sale or
purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent,
representative, or other intermediary therein where such intermediary is acting in feet for or in behalf, or is
subject to the direct or indirect control, of any party to such transaction other than the person by whom such
compensation is so granted or paid.
(d) That it shall be unlawful for any person engaged in commerce to pay or contract for the payment of
anything of value to or for the benefit of a customer of such person in the course of such commerce as
compensation or in consideration for any services or facilities furnished by or through such customer in
connection with the processing handling, sale, or offering for sale of any products or commodities
manufactured, sold, or offered for sale by such person, unless such payment or consideration is available on
proportionally equal terms to all other customers competing in the distribution of such products or
commodities.
(e) That it shall be unlawful for any person to discriminate in favor of one purchaser against another
purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to
furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the
processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to
all purchasers on proportionally equal terms.
(f) That it shall be unlawful for any person engaged in commerce, in the course of such commerce,
knowingly to induce or receive a discrimination in price which is prohibited by this section.
SEC. 3. That it shall be unlawful for any person engaged in commerce, in the course of such commerce.
to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies or other
commodities, whether patented or unpatented, for use, consummation or resale within the United States or
any Territory thereof or the District of Columbia or any insular possession or other place under the
Jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price,
on the condition, agreement or understanding that the lessee or purchasers thereof shall not use or deal in the
goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the
lessee or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement or
understanding may be to substantially lessen competition or tend to create a monopoly in any line of
commerce.
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SEC. 4. That any person who shall be injured in his business or property by reason of anything forbidden
in the antitrust laws may sue therefor in any district court; of the United States in the district in which the
defendant resides, or s found, or has an agent, without respect to the amount in controversy, and shall recover
threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.
SEC. 5. That a final judgment or decree hereafter rendered in any criminal prosecution or in any suit or
proceeding in equity brought by or on behalf of the United States under the antitrust laws to the effect that
a defendant has violated said laws shall be prima facie evidence against such defendant in any suit or
proceeding brought by any other party against such defendant under said laws as to all matters, respecting
which said judgment or decree would be an estoppel as between the parties thereto: Provided, This section
shall not apply to consent judgments or decrees entered before any testimony has been taken: Provided
further, This section shall not apply to consent amendments or decrees rendered In criminal proceedings or
suits in equity, now pending, in which the taking of testimony has been commenced but has not been
concluded, provided such judgments or decrees are rendered before any further testimony is taken.
Whenever any suit or proceeding in equity or criminal prosecution is instituted by the United States to
prevent, restrain, or punish violations of any of the antitrust laws, the running of the statute of limitations in
respect of each and every private right of action arising under said laws and based in whole or in part on any
matter complained of in said suit or proceeding shall be suspended during the pendency thereof.
SEC. 6. That the labor of a human being is not a commodity or article of commerce. Nothing contained
in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural, or
horiticultural organizations, instituted for the purposes of mutual help, and not having capital stock or
conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying
out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed
to be illegal combinations or conspiracies -in restraint of trade, under the antitrust laws.
SEC. 7.a That no corporation engaged in commerce shall acquire, directly or indirectly, the whole or any
part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade
Commission shall acquire the whole or any part of the assets of another corporation engaged also in
commerce, where in any line of commerce in any section of the country, the effect of such acquisition may
be substantially to lessen competition, or to tend to create a monopoly.
No corporation shall acquire, directly or indirectly, the whole or any part of the stock or other share
capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the
whole or any part of the assets of one or more corporations engaged in commerce, where in any line of
commerce in any section of the country, the effect of such acquisition, of such stocks or assets, or of the use
of such stock by the voting or granting of proxies or otherwise, may be substantially to lessen competition,
or to tend to create a monopoly.
This section shall not apply to corporations purchasing such stock solely for Investment and not using
the same by voting or otherwise to bring about, or in attempting to taring about, the substantial lessening of
competition. Nor shall anything contained in this section prevent a corporation engaged in commerce from
causing the formation of subsidiary corporations for the actual carrying on of their immediate lawful
business, or the natural and legitimate branches or extensions thereof, or from owning and holding all or a
part of the stock of such subsidiary corporations, when the effect of such formation is not to substantially
lessen competition.
Nor shall anything herein contained be construed to prohibit any common carrier subject to the laws to
regulate commerce from aiding in the construction of branches or short lines so located as to become feeders
to the main line of the company so aiding in such construction or from acquiring or owning all or any part
of the stock of such branch lines, nor to prevent any such common carrier from requiring and owning all or
any part of the stock of a branch or short line constructed by an independent company where there is no
substantial competition between the company owning the branch line so constructed and the company
owning the main line acquiring the property or an interest therein, nor to prevent such common carrier from
extending any of its lines through the medium
___________
3

Section 7, and also section 11, of the Clayton Act appear here in the form into which they were amended by Act
of Dec. 29, 1950 (P. L. 899; 64 Stat. 1125; 15 U. S. C. 18).

94

of the acquisition of stock or otherwise of any other common carrier where there is no substantial
competition between the company extending its lines and the company whose stock, property, or an interest
therein is so acquired.
Nothing contained in this section shall be held to affect or impair any right heretofore legally acquired:
Provided, That nothing in this section shall be held or construed to authorize or make lawful anything
heretofore prohibited or made illegal by the antitrust laws, nor to exempt any person from the penal
provisions thereof or the civil remedies therein provided.
Nothing contained in this section shall apply to transactions duly consummated pursuant to authority
given by the Civil Aeronautics Board, Federal Communications Commission, Federal Power Commission,
Interstate Commerce Commission, the Securities and Exchange Commission in the exercise of its jurisdiction
under section 10 of the Public Utility Holding Company Act of 1935, the United States Maritime
Commission, or the Secretary of Agriculture under any statutory provision vesting such power in such
Commission, Secretary, or Board.
SEC. 8. No private banker or director, officer, or employee of any member bank of the Federal Reserve
System or any branch thereof shall be at the same time a director, officer, or employee of any other bank,
banking association, savings bank, or trust company organized under the National Bank Act or organized
under the laws of any State or of the District of Columbia, or any branch thereof, except that the Board of
Governors of the Federal Reserve System may by regulation permit such service as a director, officer, or
employee of not more than one other such institution or branch thereof; but the foregoing prohibition shall
not apply in the case of any one or more of the following or any branch thereof:
(1) A bank, banking association, savings bank, or trust company, more than 90 per centum of the stock
of which is owned directly or indirectly by the United States or by any corporation of which the United States
directly or indirectly owns more than 90 per centum of the stock.
(2) A bank, banking association, savings bank, or trust company which has been placed formally in
liquidation or which is in the hands of a receiver, conservator, or other official exercising similar functions.
(3) A corporation, principally engaged in international or foreign banking or banking in a dependency
or insular possession of the United States which has entered into an agreement with the Board of Governors
of the Federal Reserve System pursuant to section 25 of the Federal Reserve Act.
(4) A bank, banking association, savings bank, or trust company, more than 50 per centum of the
common stock of which is owned directly or indirectly by persons who own directly or indirectly more than
50 per centum of the common stock of such member bank.
(5) A bank, banking association, savings bank, or trust company not located and having no branch in the
same city, town, or village as that in which such member bank or any branch thereof is located, or :in any
city, town, or village contiguous or adjacent thereto.
(6) A bank, banking association, savings bank, or trust company not engaged in a class or classes of
business in which such member bank is engaged.
(7) A mutual savings bank having no capital stock:.
Until February 1, 1939, nothing in this section shall prohibit any director, officer, or employee of any
member bank of the Federal Reserve System, or any branch thereof, who is lawfully serving at the same time
as a private banker or as a director, officer, or employee of any other bank, banking association, savings bank,
or trust company, or any branch thereof, on the date of enactment of the Banking Act of 1935, from
continuing such service.
The Board of Governors of the Federal Reserve System is authorized .and directed to enforce compliance
with this section, and to prescribe such rules and regulations as it deems necessary for that purpose.
That from and after two years from the date of the approval of this Act no person at the same time shall
be a director in any two or more corporations, any one of which has capital, surplus, and undivided profits
aggregating more than $1,000,000, engaged in whole or in part in commerce, other than banks, banking
associations, trust companies, and common carriers subject to the Act to regulate commerce, approved
February fourth, eighteen hundred and eighty-seven, if such corporations are or shall have been theretofore,
by virtue of their business and location of operation, competitors, so that the elimination of competition by
agreement between them would constitute a violation of any of the provisions of any of the antitrust laws.
The eligibility of a director under the foregoing provision shall be determined by the aggregate amount of
the capital, surplus, and undivided profits, exclusive of dividends declared but not paid to
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stockholders, at the end of the fiscal year of said corporation next preceding the election of directors, and
when a director has been elected in accordance with the provisions of this Act it shall be lawful for him to
continue as such for one year thereafter.
When any person elected or chosen as a director or officer or selected as an employee of any bank or
other corporation subject to the provisions of this Act is eligible at the time of his election or selection to act
for such bank or other corporation in such capacity his eligibility to act in such capacity shall not be affected
and he shall not become or be deemed amenable to any of the provisions hereof by reason of any change in
the affairs of such bank or other corporation from whatsoever cause, whether specifically excepted by any
of the provisions hereof or not, until the expiration of one year from the date of his election or employment.
SEC. 9.4 Every president, director, officer or manager of any firm, association or corporation engaged
in commerce as a common carrier, who embezzles, steals, abstracts or willfully misapplies or willfully
permits to be misapplied, any of the moneys, funds, credits, securities, property, or assets of such firm,
association, or corporation, arising or accruing from, or used in, such commerce, in whole or in part, or
willfully or knowingly converts the same to his own use or the use of another, shall be deemed guilty of a
felony and upon conviction shall be fined not less than $500 or confined in the penitentiary not less than one
year nor more than ten years, or both, in the discretion of the court.
Prosecutions hereunder may be in the district court of the United States for the district wherein the
offense may have been committed.
That nothing in this section shall be held to take away or impair the jurisdiction of the courts of the
several Stales under the laws thereof; and a judgment of conviction or acquittal on the merits under the la\vs
of any State shall be a bar to any prosecution hereunder for the sane act or acts.
SEC. 10. That after two years from the approval of this Act no common carrier engaged in commerce
shall have any dealings in securities, supplies, or other articles of commerce, or shall make or have any
contracts for construction or maintenance of any kind, to the amount of more than $50,000, in the aggregate,
in any one year, with another corporation, firm, partnership, or association when the said common carrier
shall have upon its board of directors or as its president, manager, or as its purchasing or selling officer, or
agent in the particular transaction, any person who is at the same time a director, manager, or purchasing or
selling officer of, or who has any substantial interest in, such other corporation, firm, partnership, or
association, unless and except such purchases shall be made from, or such dealings shall be with, the bidder
whose bid is the most favorable to such common carrier, to be ascertained by competitive bidding under
regulations to be prescribed by rule or otherwise by the Interstate Commerce Commission. No bid shall be
received unless the name and address of the bidder or the names and addresses of the officers, directors, and
general managers thereof, if the bidder be a corporation, or of the members, if it be a partnership or firm, be
given with the bid.
Any person who shall, directly or indirectly, do or attempt to do anything to prevent anyone from bidding
or shall do any act to prevent free and fair competition among the bidders or those desiring to bid shall be
punished as prescribed in this section in the case of an officer or director.
Every such common carrier having any such transactions or making any such purchases shall within
thirty days after making the same file with the Interstate Committee Commission a full and detailed statement
of the transaction showing the manner of the competitive bidding, who were the bidders, and the names and
addresses of the directors and officers of the corporations and the members of the firm or partnership
bidding; and whenever the said commission shall, after investigation or hearing, have reason to believe that
the law has been violated in and about the said purchases or transactions it shall transmit all papers and
documents and its own views or findings regarding the transaction to the Attorney General.
If any common carrier shall violate this section it shall be fined not exceeding $25,000; and every such
director, agent, manager or officer thereof who shall have knowingly voted for or directed the act constituting
such violation or who shall have aided or abetted in such violation shall be deemed guilty of a misdemeanor
and shall be fined not exceeding $5,000, or confined in jail not exceeding one year, or both in the discretion
of the court.
_____________
4

Repeated by Act of June 25, 1948, c. 645 (62 Stat. 683), which revised, codified, and enacted into “positive law”
Title 18 of the Code (Crimes and Criminal Procedure. Said act reenacted said matter as to substance, as 18 U. S. C., Sec.
660 (62 Stat. 730).

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SEC. 11.5 That authority to enforce compliance with sections 2, 3, 7, and 8 of this Act by the persons
respectively subject thereto is hereby vested in the Interstate Commerce Commission where applicable to
common carriers subject. To the Interstate Commerce Act, as amended; in the Federal Communications
Commission where applicable to common carriers engaged in wire or radio communication or radio
transmission of energy; in the Civil Aeronautics Board where applicable to air carriers and foreign air
carriers subject to the Civil Aeronautics Act of 1938; in the Federal Reserve Board where applicable to
banks, banking associations, and trust companies; and in the Federal Trade Commission where applicable
to all other character of commerce to be exercised as follows:
Whenever the Commission or Board vested with jurisdiction thereof shall have reason to believe that
any person is violating or has violated any of the provisions of sections 2, 3, 7, and of this Act, it shall issue
and serve upon such person and the Attorney General a complaint stating its charges in that respect, and
containing a notice of hearing upon a day and at a place therein fixed at least thirty days after the service of
said complaint. The person so complained of shall have the right to appear at the place and tine so fixed and
slow cause why an order should not be entered by the Commission or Board requiring such person to cease
and desist from the violation of the law so charged in said complaint. The Attorney General shall have the
right to intervene and appear in said proceeding and any person may make application, and upon good cause
shown may be allowed by the Commission or Board, to intervene and appear in quid proceeding by counsel
or in person. The testimony in any such proceeding shall be reduced to writing and filed in the office of the
Commission or Board. If upon such hearing the Commission or Board, as the case may be, shall be of the
opinion that any of the provisions of said sections have been or are being violated, it shall make a report in
writing, in which it shall state its findings as to the facts, and shall issue .and cause to be served on such
person an order requiring such person to cease and desist from such violations, and divest itself of the stock,
or other share, capital, or assets, held or rid itself of the directors chosen contrary to the provisions of
sections 7 and 8 of this Act, if any there be, in the manner and within the time fixed by said order. Until a
transcript of the record in such hearing shall have been filed in a United States court of appeals, as hereinafter
provided, the Commission or Board may at any time, upon such notice, and in such manner as it shall deem
propel, modify or set aside, in whole or in part, any report or any order made or issued by it under this
section.
If such person fails or neglects to obey such order of the Commission or Board while the same is in
effect, the Commission or Board may apply to the United States court of appeals within any circuit where
the violation complained of was or is being committed or where such person resides or carries on business,
for the enforcement of its order, and shall certify and file with its publication a transcript of the entire record
in the proceeding, including all the testimony taken and the report and order of the Commission or Board.
Upon such filing of the application and transcript the court shall cause notice thereof to be served upon such
person, and thereupon shall have jurisdiction of the proceeding and of the question determined therein, and
shall have power to make and enter upon the pleadings, testimony, and proceedings set; forth in such
transcript a decree affirming, modifying, or setting aside the order of the Commission or Board. The findings
of the Commission or Board as to the facts, if supported by substantial evidence, shall be conclusive. If either
party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of
the court that such additional evidence is material and that there where reasonable grounds for the failure to
adduce such evidence in the proceeding before the Commission or Board, the court may order such additional
evidence to be taken before the Commission or Board and to be adduced upon the hearing in such manner
and upon such terms and conditions ns to the court may seen proper. The Commission or Board may modify
its findings as to the facts, or make new findings, by reason of the additional evidence so taken, and it shall
file such modified or new findings, which, if supported by substantial evidence, shall be conclusive, and its
recommendations, if any, for the modification or setting aside of its original order, with the return of such
additional evidence. The judgment and decree of the court shall be final, except that the same shall be
subject to review by the Supreme Court upon certiorari as provided in section 1254 of title 28, United States
Code.
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5

Section 11, also section 7, of the Clayton Act appear here in the form into which they were amended by Act of
Dec. 29, 1950 (P. L. 899; 64 Stat. 1125; 15 U. S. C. 21).

97

Any party required by such order of the Commission or Board to cease and desist from a violation
charged may obtain a review of such order in said United States court of appeals by filing in the court a
written petition praying that the order of the Commission or Board be set aside. A copy of such petition shall
be forthwith served upon the Commission or Board, and thereupon the Commission or Board forthwith shall
certify and file in the court a transcript of the record as hereinbefore provided. Upon the filing of the
transcript the court shall have the same jurisdiction to affirm, set aside, or modify the order of the
Commission or Board as in the case of an application by the Commission or Board for the enforcement of
its order, and the findings of the Commission or Board as to the facts, if supported by substantial evidence,
shall in like manner be conclusive.
The jurisdiction of the United States court of appeals to enforce, set aside, or modify orders of the
Commission or Board shall be exclusive.
Such proceedings in the United States court of appeals shall be given precedence over cases pending
therein, and shall be in every way expedited. No order of the Commission or Board or the Judgment of the
court to enforce the same shall in anywise relieve or absolve any person from any liability under the antitrust
Acts.
Complaints, orders, and other processes of the Commission or Board under this section may be served
by anyone duly authorized by the Commission or Board. either (a) by delivering a copy thereof to the person
to be served, or to a member of the partnership to be served, or to the president, secretary, or other executive
officer or a director of the corporation to be served; or (b) by leaving a copy thereof at the principal office
or place of business of such person; or (c) by registering and mailing a copy thereof addressed to such person
at his principal office or place of business. The verified return by the person so serving said complaint, order,
or other process setting forth the manner of said service shall be proof of the same, and the return post-office
receipt for said complaint, order, or other process registered and mailed as aforesaid shall be proof of the
service of the same.
SEC. 12. That any suit, action, or proceeding under the antitrust laws against a corporation may be
brought; not only in the judicial district v hereof it is an inhabitant, but also in any district wherein it may
be found or transacts business: and all process in such cases may be served in the district of which it is an
inhabitant, or whatever it may be found.
SEC. 13. That in any suit, action, or proceeding brought by or on behalf of the United States subpoenas
for witnesses who are required to attend a court of the United States in any judicial district in any case, civil
or criminal, arising under the antitrust laws may run into any other district: Provided, That in civil cases no
writ of subpoena shall issue for witnesses living out of the district in which the court is held at a greater
distance than one hundred miles from the place of holding the same without the permission of the trial court
being first had upon proper application and cause shown.
SEC. 14. That whenever a corporation shall violate any of the penal provisions of the antitrust laws, such
violation shall be deemed to b` also that of the individual directors, officers, or agents of such corporation
who shall have authorized, ordered, or done any of the acts constituting in whole or in part such violation,
and such violation shall be deemed a misdemeanor, and upon conviction therefor of any such director,
officer, or agent he shall be punished by a fine of not exceeding, $5,000 or by imprisonment for not
exceeding one year, or by both, in the discretion of the court.
SEC. 15. That the several district courts of the United States are hereby invested with jurisdiction to
prevent and restrain violations of this Act, and it shall be the duty of the several district attorneys of the
United States, in their respective districts, under the direction of the Attorney General, to institute
proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition
setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the
parties complained of shall have been duly notified of such petition, the court shall proceed, as soon as ma
be, to the hearing and determination of the case; and pending such petition, and before final decree, the court
may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.
Whenever it shall appear to the court before which any such proceeding may be pending that the ends of
justice require that other parties should be brought before the court, the court may cause them to be
summoned whether they reside in the district in which the court is held or not, and subpoenas to that end may
be served in any district by the marshal thereof.
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SEC. 16. That any person, firm, corporation, or association shall be entitled to sue for and have
injunctive relief, in any court of the United States having jurisdiction over the parties, as against threatened
loss or damage by a violation of the antitrust laws, including sections two, three, seven, and eight of this Act,
when and under the same conditions and principles as injunctive relief against threatened conduct that will
cause loss or damage is granted by courts of equity, under the rules governing such proceedings, and upon
the execution of proper bond against damages for an injunction improvidently granted and a showing that
the danger of irreparable loss or damage is immediate, a preliminary injunction may issue: Provided, That
nothing herein contained shall be construed to entitle any person, firm, corporation, or association, except
the United States, to brief suit in equity for injunctive relief against any common carrier subject to the
provisions of the Act to regulate commerce, approved February fourth, eighteen hundred and eighty-seven,
in respect of any matter subject to the regulation, supervision, or other jurisdiction of the interstate
Commerce Commission.
SEC. 17.6 That no preliminary injunction shall be issued without notice to the opposite party.
No temporary restraining order shall be granted without notice to the opposite party unless it shall
c].early appear from specific facts shown by affidavit or by the verified bill that immediate and irreparable
injury, loss, or damage will result to the applicant before notice can be served and a hearing had thereon.
Every such temporary restraining order shall be endorsed with the date and hour of issuance, shall be
forthwith flied in the clerk's office and entered of record, shall define the injury and state why it is
irreparable and why the order was granted without notice, and shall by its terms expire within such time after
entry, not to exceed ten days, as the court or judge may fix, unless within the time so fixed the order is
extended for a like period for good cause shown, and the reasons for such extensions shall be entered of
record. In case a temporary restraining order shall be granted without notice in the contingency specified,
the matter of the issuance of a preliminary injunction shall be set down for a hearing at the earliest possible
time and shall tale precedence of all matters except older matters of the same character; and when the same
comes up for hearing the party obtaining the temporary restraining order shall proceed with the application
for a preliminary injunction, and if he does not do so the court shall dissolve the temporary restraining order.
Upon two days' notice to the party obtaining such temporary restraining order the opposite party may appear
and move the dissolution or modification of the order, and in that event the court or judge shall proceed to
hear and determine. the motion as expeditiously as the ends of justice may require.
Section two hundred and sixty-three of an Act entitled "An Act to codify, revise, and amend the laws
relating to the judiciary," approved March third, nineteen hundred and eleven, is hereby repealed.
Nothing in this section contained shall be deemed to alter, repeal, or amend section two hundred and
sixty-six of an Act entitled "An Act to codify, revise, and amend the laws relating to the judiciary," approved
March Third, nineteen hundred and eleven.
SEC. 18.7 That, except as otherwise provided in section 10 of this Act, no restraining order or
interlocutory order of injunction shall issue, except upon the giving of security by the applicant in such sum
as the court or judge may deem proper, conditioned upon the payment of such costs and damages as may
be incurred or suffered by any party who may be found to have been wrongfully enjoined or restrained
thereby.
SEC. 19.7 That every order of injunction or restraining order shall set forth the reasons for the issuance
of the same, shall be specific in terms, and shall describe in reasonable detail, and not by reference to the
bill of complaint or other document, the act or acts sought to be restrained, and shall be binding only upon
the parties to the suit, their officers, agents, servants, employees and attorneys, or those in active concert or
participating with them, and who shall, by personal service or otherwise, have received actual notice of the
same.
SEC. 20. That no restraining order or injunction shall be granted by any court of the United States, or
a judge or the judges thereof, in any case between an employer and employees, or between employers and
employees, or between employees, or between persons employed and persons seeking employment,
involving, or growing out of, a dispute concerning terms or conditions of employment, unless
__________
6
7

See second paragraph of footnote 8 on page 101.
See second paragraph, of footnote 8 on page 101.

99

necessary to prevent irreparable injury to property, or to a property right of the party making the application,
for which injury there is no adequate remedy at law, and such property or property right must be described
with particularity in the application which must be in writing and sworn to by the applicant or by his agent
or attorney.
And no such restraining order or injunction shall prohibit any person or persons, whether singly or in
concert, from terminating any relation of employment, or from ceasing to perform any work or labor, or from
recommending, advising, or persuading others by peaceful means so to do; or from attending at any place
where any such person or persons may lawfully be, for the purpose of peacefully obtaining or
communicating information, or from peacefully persuading any person to work or to abstain from working;
or from ceasing to patronize or to employ any party to such dispute, or from recommending, advising, or
persuading others by peaceful and lawful means so to do; or from paying or giving to, or withholding from,
any persons engaged in such dispute, any strike benefits or other moneys or things of value; or from
peaceably assembling in a lawful manner, and for lawful purposes; or from doing any act or thing which
might lawfully be done in the absence of such dispute by any party thereto; nor shall any of the acts specified
in this paragraph be considered or held to be violations of any law of the United States.
SEC. 21.7 That any person who shall willfully disobey any lawful writ, process, order, rule, decree, or
command of any district court of the United States or any court of the District of Columbia by doing any act
or thin', therein, or thereby forbidden to be done by him, if the act or thing so done by him be of such
character as to constitute also a criminal offense under any statute of the United States, or under the laws
of any State in which the act was committed, shall be proceeded against for his said contempt hereinafter
provided.
SEC. 22.7 That whenever it shall be made to appear to any district court or Judge thereof, or to any
judge therein sitting, by the return of a proper officer or lawful process, or upon the affidavit of some
credible person, or by information filed by any district attorney, that there is reasonable ground to believe
that any person has been guilty of such contempt, the court or judge thereof, or any judge therein sitting, may
issue a rule requiring the said person so charged to show cause upon a day certain why he should not be
punished therefor, which rule, together with a copy of the affidavit or information, shall be served upon the
person charged, with sufficient promptness to enable him to prepare for and make return to the order at the
time fixed therein. If upon or by such return, in the judgment of the court, the alleged contempt be not
sufficiently purged, a trial shall be directed at a time and placed fixed by the court: Provided, however, That
if the accused, being a natural person, fail or refuse to make return to the rule to show cause, an attachment
may issue against his person to compel an answer, and in case of his continued failure or refusal, or if for
any reason it be impracticable to dispose of the matter on the return day, he may be required to give
reasonable bail for his attendance at the trial and his submission to the final judgment of the court. Where
the accused is a body corporate, an attachment for the sequestration of its property may be issued upon like
refusal or failure to answer.
In all cases within the purview of this Act such trial may be by the court, or, upon demand of the
accused, by a jury; in which latter event the court may impanel a jury from the jurors then in attendance, or
the court or the judge thereof in chambers may cause a sufficient number of jurors to be selected and
summoned, as provided by law, to attend at the time and place of trial, at which time a jury shall be selected
and impaneled as upon trial for misdemeanor; and such trial shall conform, as near as may be, to the practice
in criminal cases prosecuted by indictment or upon information.
If the accused be found guilty, judgment shall be entered accordingly, prescribing the punishment, either
by fine or imprisonment, or both, in the discretion of the court. Such fine shall be paid to the Unites States
or to the complainant or other party injured by the act constituting the contempt, or may, where more than
one is so damaged, be divided or apportioned among them as the court may direct, but in no case shall the
fine to be paid to the United States exceed, in case the accused is a natural person, the sum of $1,000, nor
shall such imprisonment exceed the term of six months: Provided, That in any case the court or a judge
thereof may, for good cause shown, by affidavit or proof taken in open court or before such judge and filed
with the papers in the case, dispense with the rule to show cause, and may issue an attachment for the arrest
of the
_____________
7

100

See footnote 8 on page 101.

person charged with contempt; in which event such person, when arrested, shall be brought before such court
or a judge thereof without unnecessary delay and shall be admitted to bail in a reasonable penalty for his
appearance to answer to the charge or for trial for the contempt; and thereafter the proceedings shall be the
same as provided herein in case the rule had issued in the first instance.
SEC. 235 That the evidence taken upon the trial of any persons so accused may be preserved by bill of
exceptions, and any judgment of conviction may be reviewed upon writ of error in all respects as now
provided by law in criminal cases, and may be affirmed, reversed, or modified as Justice may require. Upon
the granting of such writ of error, execution of judgment shall be stated and the accused, if thereby sentenced
to imprisonment, shall be admitted to bail in such reasonable sum as may be required by the court, or by any
justice or any judge of any district court of the United States or any court of the District of Columbia.
SEC. 24.8 That nothing herein contained shall be construed to relate to contempts committed in the
presence of the court, or so near thereto as to obstruct the administration of justice, nor to contempts
committed in disobedience of any lawful writ, process, order, rule, decree, or command entered in any suit
or action brought or prosecuted in the name of, or on behalf of, the United States, but the same, and all the
other cases of contempt not specifically embraced within section twenty-one of this Act, may be punished
in conformity to the usages at law and in equity now prevailing.
SEC. 25.8 That no proceeding for contempt shall be instituted against any person unless begun within
one year from the date of the act complained of; nor shall any such proceeding be a bar to any criminal
prosecution for the same act or acts; but nothing herein contained shall affect any proceedings in contempt
pending at the time of the passage of this Act.
SEC. 26. lf any clause, sentence, paragraph, or part of this Act shall, for any reason, be adjudged by any
court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the
remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof
directly involved in the controversy in which such judgment shall have been rendered.
Approved, October 15, 1914.

Flammable Fabrics Act
(Approved June 30, 1953; 67 Stat. 111; 15 U. S. C. Sec. 1191)
PUBLIC—No. 88—83D CONGRESS, CH. 164—1ST SESS.]
[H. R. 5069]

AN ACT To prohibit the introduction or movement in interstate commerce of articles of wearing apparel and fabrics
which are so highly flammable as to be dangerous when worn by individuals, and for other purposes.
Be it enacted by the Senate and use of Representatives of the United States of America in Congress assembled,
SHORT TITLE

SECTION 1. This Act may be cited as the “Flammable Fabrics Act.”
DEFINITIONS

SEC. 2. As used in this Act—
(a) The term "person" means an individual, partnership, corporation, association, or any other form of
business enterprise.
______________________
8

Sections 21 to 25, Inclusive, were repealed by Act of June 25, 1948, c. 645 (62 Stat. 683), which revised, codified, and enacted
into "positive law," Title 18 of the Code (Crimes and Criminal Procedure). Said act reenacted said matter, excluding Section 23,
as to substance, as 18 U. S. C., Section 402 (as amended by Public Law 72, May 21, 1949, 81st Congress), 18 U. S. C., Section 3285
and 18 U. S. C., Section 3691. Section 23 was omitted as no longer required in view of the civil and criminal rules promulgated by
the Supreme Court.
The Act of June 25, 1948, c. 646 (62 Stat. 896), which revised, codified, and enacted into law Title 28 of the Code (Judicial
Code and Judiciary, repealed the first, second, and fourth paragraphs of Section 17, and repealed Sections 18 and 19, in view of Rule
35, Federal Rules of Civil Procedure, which covers the substance of the matter involved.

101

(b)The term "commerce" means commerce among the several States or with foreign nations, or in any
Territory of the United States or in the District of Columbia, or between any such Territory and another, or
between any such Territory and any State or foreign nation, or between the District of Columbia and any
State or Territory or foreign nation.
(c) The term "Territory" includes the insular possessions of the United States and also any Territory of
the United States.
(d) The term "article of wearing apparel" means any costume or article of clothing worn or intended to
he worn by individuals except hats, gloves, and footwear: Provided, however, that such hats do not constitute
or form part of a covering for the neck, face, or shoulders when worn by individuals: Provided further, That
such golves are not more than fourteen inches in length and are not affixed to or do not form an integral part
of another garment: And provided further, That such footwear does not consist of hosiery in whole or in part
and is not affixed to or does not form an integral part of another garment.
(e) The term "fabric" means any material (other than fiber, filament, or yarn) woven, knitted, felled. or
otherwise produced from or in combination with any natural or synthetic fiber, film, or substitute therefor
which is intended or sold for use in wearing apparel except that interlining fabrics when intended or sold for
use in wearing apparel shall not be subject to this Act.
(f) The term "interlining" means any fabric which is intended for incorporation into an article of wearing
apparel as a layer between an outer shell and an inner lining.
(g) The term "Commission" means the Federal Trade Commission.
(h) The term "Federal Trade Commission Act" means the Act of Congress entitled "An Act to create a
Federal Trade Commission, to define its lowers and duties, and for other purposes", approved September 26,
1914, as amended.
PROHIBITED TRANSACTIONS

SEC. 3. (a) The manufacture for sale, the sale, or the offering for sale, in commerce, or the importation
into the United States, or the introduction, delivery for introduction, transportation or causing to be
transported in commerce or for the purpose of sale or delivery after sale in commerce, of any article of
wearing apparel which under the provisions of section 4 of this Act is so highly flammable as to be dangerous
when worn by individuals, shall be unlawful and shall be an unfair method of competition and an unfair and
deceptive act or practice in commerce under the Federal Trade Commission Act.
(b) The sale or the offering for sale, in commerce, or the importation into the United States, or the
introduction, delivery for introduction, transportation or causing to be transported in commerce or for the
purpose of sale or delivery after sale in commerce, of any fabric which under the provisions of section 4 of
this Act is so highly flammable as to be dangerous when worn by individuals, shall be unlawful and shall be
an unfair method of competition and an unfair and deceptive act or practice in commerce under the Federal
Trade Commission Act.
(c) The manufacture for sale, the sale, or the offering for sale, of any article of wearing apparel made of
fabric which under section 4 is so highly flammable as to be dangerous when worn by individuals and which
has been shipped or received in commerce shall be unlawful and shall be an unfair method of competition
and an unfair and deceptive act or practice in commerce under the Federal Trade Commission Act.
STANDARD OF FLAMMABILITY

SEC. 4. ( a ) Any fabric or article of wearing apparel shall be deemed so highly flammable within the
meaning of section 3 of this Act as to be dangerous when worn by individuals if such fabric or any uncovered
or exposed part of such article of wearing apparel exhibits rapid and intense burning when tested under the
conditions and in the manner prescribed in the Commercial Standard promulgated by the Secretary of
Commerce effective .January 30, 1953, and identified as "Flammability of Clothing Textiles, Commercial
Standard 191-53," or exhibits a rate of' burning in excess of that specified in paragraph 3.11 of the
Commercial Standard promulgated by the Secretary of Commerce effective May 22, 1953, and identified as
"General Purpose Vinyl Plastic Film, Commercial Standard 192-53." For the purposes of this Act, such
Commercial Standard 191-53 shall apply with respect to the hats, gloves, and footwear covered by section
2 (d) of this Act, notwithstanding any exception contained in such Commercial Standard with respect to hats,
gloves, and footwear.
102

(b) If at any time the Secretary of Commerce finds that the Commercial Standards referred to in
subsection (a) of this section are inadequate for the protection of the public interest, he shall submit to the
Congress a report setting forth his findings together with such proposals for legislation as he deems
appropriate.
(c) Notwithstanding the provisions of paragraph 3.1 Commercial Standard 191-53, textiles free from nap,
pile, tufting, dock, or other type of raised fiber surface when tested as described in said standard shall be
classified as class 1, normal flammability, when the tine of flame spread is three and one-half seconds or
more, and as c lass 3, rapid and intense burning, when the time of flame spread is less than three anti one-half
seconds.1
ADMINISTRATION AND ENFORCEMENT

SEC. 5. (a) Except as otherwise specifically provided herein, sections 3, 5, 6, and 8 (b) of this Act shall
be enforced by the Commission under rules, regulations and procedures provided for in the Federal Trade
Commission Act.
(b) The Commission is authorized and directed to prevent any person from violating the provisions of
section 3 of this Act in the same manner, by the same mans and with the same jurisdiction, powers and duties
as though all applicable terms and provisions of the federal Trade Commission Act were incorporated into
and made a part of this Act; and any such person violating any provision of section 3 of this Act shall be
subject to the penalties and entitled to the privileges and immunities provided in said Federal Trade
Commission Act as though the applicable terms and provisions of the said Federal Trade Commission Act
were incorporated into and made a part of this Act.
(c) The Commission is authorized and directed to prescribe such rules and regulations as nay be
necessary and proper for purposes of administration and enforcelllent of tlis Act.
(d) The Commission is authorized to—
(1) cause inspections, analyses, tests, and examinations to be made of any article of wearirlg alparel
or fabric which it has reason to believe falls vitlin the prohibitions of this Act; and
(2) cooperate on matters related to the purposes of this Act with any department or agency of the
Government; with any State, Territory or possession or with the District of Columbia; or with any
department, agency, or political subdivision thereof; or with any person.
INJUNCTION AND CONDEMNATION PROCEEDINGS

SEC. 6. (a) Whenever the Commission has reason to believe that any person is violating or is about to
violate section 3 of this Act, and that it would be in the public interest to engin. such violation until complaint
under the Federal Trade Commission Act is issued and dismissed by the Commission or until order to cease
and desist made thereon by the Commission has become final within the meaning of the Federal Trade
Commission Act or is set aside by the court on review, the Commission may bring suit in the district court
of the United States or in United States court of any Territory for the district or Territory in which such
person resides or transacts business, to enjoin such violation and upon proper showing a temporary injunction
or restraining order shall be granted without bond.
(b) Whenever the Commission has reason to believe that any article of wearing apparel has been
manufactured or introduced into commerce or any fabric has been introduced in commerce in violation of
section 3 of this Act, it may institute proceedings by process of libel for tire seizure and confiscation of such
article of wearing apparel or fabric in any district court of the United States within the jurisdiction of which
such article of wearing apparel or fabric is found. Proceedings in cases instituted under the authority of this
section shall conform as nearly as may be to proceedings in rem in admiralty, except that on demand of either
party and in the discretion of the court, any issue of fact shall be tried by jury. Whenever such proceedings
involving identical articles of' wearing apparel or fabrics are pending in two or more jurisdictions, they may
be consolidated for trial by order of any such court upon application seasonably made by any party in interest
upon notice to all other parties in interest. Any court granting an order of consolidation shall cause prompt
notification thereof to be given to other courts having jurisdiction in the cases covered
__________________
1
Subparagraph (c) added by Public No. 629. 83d Cong., Ch. 833, Second Session, S. 3379 (An Act to amend
section 4 of the Flammable Fabrics Act, with respect to standards of flammability in the case of certain textiles),
approved Aug. 23, 1954.

103

thereby and the clerks of such other courts shall transmit all pertinent records and papers to the court
designated for the trial of such consolidated proceedings.
(c) In any such action the court upon application seasonably made before trial shall by order allow any
party in interest, his attorney or agent, to obtain a representative sample of the article of wearing apparel or
fabric seized.
(d) If such articles of wearing apparel or fabrics are condemned by the court they she'll be disposed of
by destruction, by delivery to the owner or claimant thereof upon payment of court costs and fees and storage
and other propel expenses and upon execution of' good and sufficient bond to the effect that such articles of
wearing apparel or fabrics will not be disposed of for wearing apparel purposes until properly and adequately
treated or processed so as to render them lawful for introduction into commerce, or by sale upon execution
of good and sufficient bond to the effect that such articles of wearing apparel or fabrics will not be disposed
of' for wearing apparel purposes until properly and adequately treated or processed so as to render them
lawful for introduction into commerce. If such products are disposed of by sale the proceeds, less costs and
charges, shall be paid into the Treasury of the United States.
PENALTIES

SEC. 7. Any person who willfully violates section 3 or (b) of this Act shall be guilty of a misdemeanor,
and upon conviction thereof shall be fined not more than $5,000 or be imprisoned not more than one year
or both in the discretion of the court: Provided, That nothing herein shall limit other provisions of this Act.
GUARANTY

SEC. 8. (a) No person shall be subject to prosecution under section 7 of this Act for a violation of section
3 of this Act if such person (1) establishes a guaranty received in good faith signed by and containing the
name and address of the person by whom the wearing apparel or fabric guaranteed was manufactured or from
whom it was received, to the effect that reasonable and representative tests made under the procedures
provided in section 4 of this Act show that the fabric covered by the guaranty, or used in the wearing apparel
covered by the guaranty is not, under the provisions of section 4 of this Act, so highly flammable as to be
dangerous when worn by individuals, and (2) has not, by further processing effected the flammability of the
fabric or wearing apparel covered by the guaranty which he received. Such guaranty shall he either (1) a
separate guaranty specifically designating the wearing apparel or fabric guaranteed, in which case it may be
on the invoice or other paper relating to such wearing apparel or fabric: or (2) a continuing guaranty filed
with the Commission applicable to any wearing apparel or fabric handled by a guarantor in such form as the
Commission by rules or regulations may prescribe.
(b) It shall be unlawful for any person to furnish, with respect to any wearing apparel or fabric, a false
guaranty (except a person relying upon a guaranty to the same effect received in good faith signed by and
containing the name and; address of the person by whom the wearing apparel or fabric guaranteed was
manufactured or from whom it was received) with reason to believe the wearing apparel or fabric falsely
guaranteed may he introduced, sold, or transported in commerce, and any person who violates the provisions
of this subsection is guilty of an unfair method of competition, and an unfair or deceptive act or practice, in
commerce within the meaning of the Federal Trade Commission Act.
SHIPMENTS FROM FOREIGN COUNTRIES

SEC. 9. Any person who has exported or who has attempted to export from any foreign country into the
United States any wearing apparel or fabric which under the provisions of section 4, is so highly flammable
as to be dangerous when worn by individuals may thenceforth he prohibited by the Commission from
anticipating in the exportation from any foreign country into the United States of any wearing apparel or
fabric except upon filing bond with the Secretary of the Treasury in a sum double the value of said products
and any duty thereon, conditioned upon compliance with the provisions of this Act.
INTERPRETATION AND SEPARABILITY

SEC. 10. The provisions of this Act shall be held to be in addition to, and not in substitution for or
limitation of, the provisions of any other law. If any
104

provision of this Act or the application thereof to any person or circumstances is held invalid the remainder
of the Act and the application of such provisions to any other person or circumstances shall not be affected
thereby.
EXECUTIONS

SEC. 11. The provisions of this Act shall not apply (a) to any common carrier, contract carrier, or freight
forwarder with respect to an article of wearing apparel or fabric shipped or delivered for shipment into
commerce in the ordinary course of its business; or (b) to any converter, processor, or finisher in performing
a contract or commission service for the account of a person subject to the provisions of this Act: Provided,
That said converter, processor, or finisher does not cause any article of weaning apparel or fabric to become
subject to this Act contrary to the terms of the contract or commission service; or (c) to any article of wearing
apparel or fabric shipped or delivered for shipment into commerce for the purpose of finishing or processing
to render such article or fabric not so highly flammable, under the provisions of section 4 of this Act, as to
be dangerous when worn by individuals.
EFFECTIVE DATE

SEC. 12. This Act shall take effect one year after the date of its passage.
AUTHORIZATION OF NECESSARY APPROPRIATIONS

SEC. 13. There is hereby authorized to be appropriated such sums as may be necessary to carry out the
provisions of this Act.
Approved June 30 1953.
382867—56——8

105

General Investigations by the Commission
since 1915
Since its establishment in 1915, the Federal Trade Commission has conducted numerous general
inquiries which are alphabetically listed and briefly described in the following pages.1 They were made at
the request of the President, the Congress, the Attorney General, Government agencies, or on motion of the
Commission pursuant to the Federal Trade Commission Act.
Reports or these inquiries in many instances have been published as Senate or House documents or as
Commission publications. Printed documents, unless indicated as being out of print,2 may be purchased from
the Superintendent of Documents, Government Printing Office, Washington, D. C. Processed publications
are available without charge from the Federal Trade Commission while the supply lasts.
Agencies initiating or requesting investigations are indicated in parentheses in the headings.
Investigations, the results of which have been published, are listed below. Following this listing are
unpublished investigations conducted by the Commission.
Accounting Systems (F. T. C.).—Pointing the way to a general improvement in accounting practices, the
Commission, published Fundamentals of Cost System for Manufacturers (H. Doc. 1356, 64th, 31 p., o. p.,
7/1/16) and A System of Accounts for Retail Merchants (19 p., o. p., 7/15/16).
Accounting Systems.—See Distribution Cost Accounting.
Advertising as a Factor in Distribution.—See Distribution Methods and Costs.
Agricultural Implements.—See Farm Implements and Distribution Methods and Costs.
Agricultural Implements and Machinery (Congress).3—Prices of farm products reached record lows in
1932 but prices of' many farm implements, machines, and repair parts maintained high levels resulting in
widespread complaints in the next few years. The Commission investigated the situation (Public Res. 130,
74th, 6/24/36) and, following submission of its report, Agricultural Implement and Machinery Industry (H.
Doc. 702, 75th, 1,176 p., 6/6/38), the industry made substantial price reductions. The report criticized certain
competitive practices on the part of the dominant companies which the companies later promised to remedy.
It showed, among other things, that a few major companies had maintained a concentration of control which
resulted in large part from their acquisition of the capital stock or assets of competitors prior to enactment
of the Clayton Antitrust Act in 1914 and thereafter from their purchase of assets of
_______________
1

The wartime cost-finding inquiries, 1917-18 (p. 124), include approximately 370 separate investigations.
Documents out of print (designated "o. p.") are available in depository libraries.
3
Inquiries desired by either House of Congress are now undertaken by the Commission as a result of concurrent
resolutions of both Houses.
2

106

competitors rather than capital stock.4 (See also under Farm Implements and Independent Harvester Co.)
Agricultural Income (Congress).—Investigating a decline in agricultural income and increases or
decreases in the income of corporations manufacturing and distributing wheat, cotton, tobacco, livestock,
milk, and potato products (Public Res. 61, 74th, 8/27/35), and table and juice ,grapes, fresh fruits and
vegetables (Public Res. 112, 74th, 6/20/36), the Commission made recommendations concerning, among
other things, the marketing of commodities covered by the inquiry; corporate consolidations and mergers;5
unbalanced agricultural industrial relations; cooperative associations; production financing; transportation;
and terminal markets. Its recommendations for improvement of the Perishable Agricultural Commodities Act
were adopted by Congress in amending that act (Public, 328, 75th in 1937. [Report of the F. T. C. on
Agricultural Income Inquiry, Part I, Principal Farm Products, 1,134 p., 3/2/37 (summary, conclusions, and
recommendations, S. Doc. 54, 75th, 40 p.); Part II, Fruits, Vegetable, and Grapes, 906 p. 6/10/37; Part III,
Supplementary Report, 154 p., 11/8/37; and interim reports of 12/26/35 (H. Doc. 380, 74th, 6 p.), and 2/1/37
(S. Doc.17, 75th, 16 p.).]
Agricultural Prices.—See Price Deflation.
Automobiles.—See Distribution Methods and Costs, and Motor Vehicles.
Bakeries and Bread.—See under Food.
Beet Sugar.—See under Food—Sugar.
Building Materials.—See Distribution Methods and Costs.
Calcium Arsenate (Senate).—High prices of calcium arsenate, a poison used to destroy the cotton boll
weevil (S. Res. 417, 67th, 1/23/23), appeared to be due to sudden increased demand rather than trade
restraints (Calcium Arsenate Industry, S. Doc.345, 67th, 21 p.,op 3/3/23).
Cartels. See paragraphs headed Copper Industry, International Phosphate Cartels, Sulphur Industry,
International Electrical Equipment Cartel, International Steel Cartels, Fertilizer (F. T. C.), International
Petroleum Cartels, and International Alkali Cartels.
Cement (Senate).—Inquiry into the cement industry's competitive conditions and distributing processes
(S. Res. 448, 71st, 2/16/31) showed that rigid application of the multiple basing-point price system6 tended
to lessen price competition and destroy the value of settled bids; concerted activities of manufacturers and
dealers strengthened the system's price effectiveness; and dealer associations' practices were designed to
restrict sales to recognized "legitimate" dealers (Cement Industry, S. Doc. 71, 73d, 160 p., o. p., 6/9/33).
Chain Stores (Senate).—Practically every phase of chain-store operation was covered (S. Res. 224, 70th,
5/12/28), including cooperative chains, chain-store manufacturing and wholesale business, leaders and loss
leaders, private brands, short weighing and overweighing and sales, costs, profits, wages, special discounts
and allowances, and prices and margins of chain and independent grocery and drug distributors fin selected
cities. (For subtitles of 33 reports published
______________
4

Conditions With Respect to the Sale and Distribution of Milk and Dairy Products (H. Doc. 94, 75th, 1/4/37), p.
38; Report of the F. T. C. on Agricultural Income Inquiry, Part I (3/2/37), p. 26; Agricultural Implement and Machinery
Industry (H. Doc. 702, 75th, 6/6/39), p. 1038; The Present Trend of Corporate Mergers and Acquisitions 3/7/47); The
Merger Movement: A Summary Report (1948); and F. T. C. Annual Reports: 1938, pp. 19 and 29; 1939, p. 14; 1940,
p. 12; 1941, p. 19; 1942, p. 9; 1944, p. 7; 1945, p. 8; 1946, p. 12; 1947, p. 12; and 1948, p. 11.
5
See footnote 4 above.
6
Basing-point systems are also discussed in the published reports listed herein under “Price Bases,” “Steel Code,”
and “Steel Sheet Piling.”

107

under the general title, Chain Stores, 1931-33, see F. T. C. Annual Report, 1941. p. 201. )
ln the Final Report on the Chain-Store Investigation. (S. Doc. 4, 74th, 110 p., o. p., 12/14/34), legal
remedies available to combat monopolistic tendencies in chain-store development were discussed.7 The
Commission's recommendations pointed the way to subsequent enactment of the Robinson-Patman Act
(1936) prohibiting price and other discriminations, and the Wheeler-Lea Act (1938) which amended the
Federal Trade Commission Act so as to broaden the prohibition of unfair methods of competition in section
5 to include unfair or deceptive acts or practices in interstate commerce.
Cigarette Shortage (F. T. C. and Senate Interstate Commerce Committee Chairman), Wartime, 194445.—In response to complaints from the public and a request from the Chairman of the Senate Interstate
Commerce Committee (letter dated 12/1/44), the Commission investigated the cigarette shortage and
reported, among other things that the scarcity was directly traceable to the large volume of cigarettes moving
to the armed forces and the Allies; that it was not attributable to violations of laws administered by the
Commission; but that certain undesirable practices such as hoarding and tie-in sales had developed. (Report
of the F. T. C. on the Cigarette Shortage, 33 pages, processed, 2/13/45.)
Coal (Congress and F. T. C.), Wartime, 1917-18, Etc.—From 1916 through the first World War period
and afterward, the Commission at different times investigated anthracite and bituminous coal prices and coal
industry's financial condition. Resulting cost and price reports are believed to have substantially benefited
the consumer. Among the published reports were: Anthracite Coal Prices, preliminary (S. Doc. 19, 65th, 4
p., o. p., 5/4/17); Preliminary Report by the F. T. C. on the Production and Distribution of Bituminous Coal
(H. Doc. 152, 85th, 8 p., o. p., 5/19/17); Anthracite and Bituminous Coal Situation, summary (H. Doc. 193,
65th, 29 p., o. p., 6/19/17); and Anthracite and Bituminous Coal (S. Doc. 50. 65th, 420 p., o. p.,
6/19/17)—pursuant to S. Res. 217, 64th 2/22/16; H. Res. 352, 64th, 8/18/16, and S. Res. 51, 65th, 5/1 /17;
Washington, D. C., Retail Coal Situation (5 p., release, processed, o. p., 8/11/17)—pursuant to F. T. C.
motion; Investment and Profit in Soft-Coal Mining (two parts, 5/31/22 and 7/6/22, 218 p.,o.p., S. Doc. 207,
65th)—pursuant to F. T. C. motion; and Report of the F. T. C. on Premium Prices of Anthracite (97 p.,o. p.,
7/6/25)—pursuant to F. T. C. motion.
Coal, Cost of Production (F. T. C.), Wartime, 1917-18.—President Wilson fixed coal prices by Executive
order under the Lever Act (1917) on the basis of information furnished by the Commission. For use of the
U. S. Fuel Administration in continuing price control, the Commission compiled monthly cost production
reports, collecting cost records for 1917-18 for about 99 percent of the anthracite and 95 percent of the
bituminous coal production (Cost Report., of the F. T. C.— Coal, 6/30/19, summarized for principal coalproducing States or regions: (1) Pennsylvania, bituminous, 103 p., o. p.; (2) Pennsylvania, anthracite, 145
p., o. p.; (2) Illinois, bituminous, 127 p., o. p.; (4) Alabama, Tennessee, and Kentucky, bituminous, 210 p.,
o. p.; (5) Ohio, Indiana, and Michigan, bituminous, 288 p.,o.p.; (6) Maryland, West Virginia, and Virginia,
bituminous, 286 p.,o.p.; and (7) trans-Mississippi States, bituminous, 459 p., o. p.).
Coal, Current Monthly Reports (F. T. C.).—The Commission (December 1919) initiated a system of
current monthly returns from the soft coal industry similar to those compiled during the World War, 1917-18
(Coal - Reports on Cost of Production, 4/20/20 to 10/30/20, Nos.1 to 6, and two quarterly report with revised
costs, 8/25/20 and 12/6/20, processed, o. p. ). An injunction to
_____________
7
See footnote 4, p. 107
108

prevent the calling, for the monthly reports (denied about 7 years later) led to their abandonment.
Coffee (F. T. C.).—In its 1954 Economic Report of the Investigation of Coffee Prices, the Commission
reported that the coffee price spiral of 1953-54 "cannot be explained in terms of the competitive laws of
supply and demand." The report lists and discusses six major factors responsible for the price spiral, and
recommends Congressional action to correct some of the "market imperfections" and "irregularities" found.
(593 pp., 7/30/54.)
Combed Cotton Yarns.-—See Textiles.
Commercial Bribery (F. T. C.).—Investigating the prevalence of bribery of customers' employees as a
means of obtaining trade, the Commission published A Special Report on Commercial Bribery (H. Doc.
1107, 65th, 3 p., o. p., 5/10/18), recommending legislation striking at this practice; Commercial Bribery (53.
Doc. unnumbered, 65th, 36 p., o. p., 8/22/18); and Commercial Bribery (S. Doc. 258, 66th, 7 p, o. p.,
3/18,/20).
Concentration in Manufacturing, Changes in, 1935 to 1947 and 1950 (F. T. C.).— This 153-page report
shows that, on the basis of a study of the top 200 companies, concentration in American manufacturing was
2.8 percentage points higher in 1950 than in 1935. The report explores the reasons for the changes in
recorded concentration in individual industries
Concentration of Productive Facilities (F. T. C.).—In a study of the extent of concentration of economic
power, the Commission reported that 40 percent of the total net capital assets of all manufacturing
corporations in the United States in 1947 was concentrated in the 113 largest manufacturers. The report is
entitled The Concentration of Productive Facilities, 1957—Total Manufacturing and 26 Selected Industries
(96 p.). See also Divergence between Plant and Company Concentration.
Control of Iron Ore (F. T. C.).—A study of the concentration of iron ore supplies covers the sources and
consumption of iron ore in 1948, no estimate of reserves available to major companies an`1 an analysis of
effect of possible shortage on big and small companies. The Control of Iron Ore (1952).
Cooperation in American Export Trade.—See Foreign Trade.
Cooperation in Foreign Countries (F. T. C.).—Inquiries made by the Commission regarding the
cooperative movement in 15 European countries resulted in a report, Cooperation in Foreign Countries ( S.
Doc. 171, 68th, 202 p., o. p., 11/29/24), recommending further development of cooperation fin the United
States.
Cooperative marketing (Senate).—This inquiry (S. Res. 34, 69th, 3/17/25) covered the development of
the cooperative movement in the U. S. and illegal Interferences with the formation and operation of
cooperatives; and a comparative study of costs, prices, and marketing methods (Cooperative Marketing, S.
Doc. 95, 70th, 721 p., o. p., 4/30/28).
Copper.—See Wartime Cost Finding, 1917-18.
Copper Industry (F. T. C.).—The Commission's report on The Copper Industry, transmitted to Congress
(3/11/47), was in two parts: Part I—The Copper Industry of the United States and International Copper
Cartels, and Part II—Concentration and Control by the Three Dominant Companies. The Commission
reported that "The copper situation is particularly serious, not only because of the concentration of control
of the ore reserves and of the productive capacity, but also because the domestic supply is inadequate to meet
the demands of high level national production and employment. Furthermore, the production of foreign
copper, on which the United States will become increasingly dependent, is likewise dominated by a few
corporate groups which in the past have operated cooperatively in cartels to regulate production and prices."
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Corporation Reports.—See Quarterly Financial Reports.
Corporate Mergers and Acquisitions (F. T. C.).—To determine the impact on the Nation's economy of
corporate mergers and acquisitions, the Commission made a study of the merger movement for the years
1940-46, inclusive. The results of the study were transmitted to Congress in a report entitled The Present
Trend of Corporate Mergers and Acquisitions (23 p., o. p., 3/7/47), which showed, among other things, that
during the period covered, more than 1,800 formerly independent competitive firms in manufacturing and
mining industries alone had disappeared as a result of mergers or acquisitions, and that more than one-third
of the total number of acquisitions occurred in only three industries, food, nonelectrical machinery, and
textiles and apparel—all predominantly "small business"fields.
In 1947 the Commission published The Present Trend of Corporate Mergers (23 p., o. p.). This is a
review of some of the economic effects of the loophole in the Clayton Act existing at that time in the fact
that there was no prohibition against mergers by the acquisition of assets.
In 1948 the Commission published The Merger Movement: A Summary Report (134 p., o. p., also 7 p.
processed summary). In this report the legal history of the antimerger provisions of the Clayton Act is
reviewed. Significant individual mergers are examined in detail. Maps, diagrams, charts and tabular
statistical materials are used to illustrate the economic effects of the then in force antimerger legislation.
The Report on Corporate Mergers and Acquisitions (210 p.) was published in May 1955: This study,
bringing up to date much of the statistical material in the 1947 and 1948 reports, showed, among other things,
that 1,773 formerly independent competitive firms in manufacturing and mining industries alone had
disappeared in the period 1947-54 as a result of mergers or acquisitions, and that more than one-third of the
total number of acquisitions occurred in only 3 industries, food, nonelectrical machinery, and textiles and
apparel—all predominantly small business fields.
Cost Accounting.—See Accounting Systems.
Cost of Living (President), Wartime, 1917-18.—Delegates from the various States met in Washington,
April 30 and May 1, 1917, at the request of the Federal Trade Commission, and considered the rapid rise of
wartime prices and the plans then being made for the Commission's general investigation of foodstuffs. [See
Foods (President), Wartime, 1917-18, herein.] Proceedings of the conference were published (High Cost of
Living, 119 p., o. p.).
Cotton Industry.—See Textiles.
Cottonseed Industry (House).—Investigating alleged price fixing (Res. 439, 69th, 3/2/27) the
Commission reported evidence of cooperation among State associations hut no indication that cottonseed
crushers or refineries had fixed prices in violation of the antitrust laws (Cottonseed Industry, H. Doc. 193,
70th, 37 p., 3/5/28).
Cottonseed Industry (Senate).—Two resolutions (S. Res. 136, 10/21/29, and S. Res. 147, 11/2/29—71st)
directed the Commission to determine whether alleged unlawful combinations of cottonseed oil mill
corporations sought to lower and fix prices of cottonseed aud to sell cottonseed meal at a fixed price under
boycott threat; and whether such corporations acquired control of cotton gins to destroy competitive markets
and depress or control prices paid to seed producers (Investigation of the Cottonseed Industry, preliminary
report, S. Doc. 531, 71st, 4 p., o. p., 2/28/30, and final report, 207 p., o. p., with 11 vols. testimony, S. Doc.
209, 71st, 5/19/33).
Distribution Cost Accounting (F. T. C.).—To provide a guide for current legislation and determine ways
for improving accounting methods, the Commission
110

studied distribution cost accounting in connection with selling, warehousing, handling, delivery, credit and
collection ( Case Studies in Distribution Cost Accounting for Manufacturing and Wholesaling, H. Doc. 287,
77th, 215 p., o. p., 6/23/41).
Distribution.—See Millinery Distribution.
Distribution of Steel Consumption.-—A study to determine the distribution of steel in a time of shortage,
when control over distribution rests with the producers. (1949-1950) The results of the study were
transmitted to the Subcommittee on Monopoly of the Senate Select Committee on Small Business and
published as a committee print. (20p ) 3/31/52.
Distribution Methods and Costs (F. T. C.).—This inquiry into methods and costs of distributing
important consumer commodities: (F. T. C. Res., 6/27/40) was undertaken by the Commission pursuant to
authority conferred upon it by section 6 of the F. T. C. Act. Eight parts of the F. T. C. Report on Distribution
Methods and Cost., were transmitted to Congress and published under the subtitles: Part I, Important Food
Products (11/11/43, 223 p., o. p.); Part III, Building Materials—Lumber, Paints and Varnishes, and Portland
Cement (2/19/44, 50 p., o. p.); Part IV, Petroleum Products, Automobiles, Rubber Tires and Tubes, Electrical
Household Appliances, and Agricultural Implements (3/2/44, 189 p., o. p. ); Part V, Advertising as a Factor
in Distribution (10/30/44, 50 p. ); Part VI, Milk Distribution, Prices, Spreads and Profits (6/18,/45, 58 p.);
Part VII, Cost of Production and Distribution of Fish in the Great Lakes Area (6/30/45, 59 p.); Part VIII, Cost
of Production and Distribution of Fish in New England (6/30/45, 118 p.); and Part IX, Cost of Production
and Distribution of Fish on the Pacific Coast (7/25/46, 82 p.). The inquiries relating to fish were conducted
in cooperation with the Coordinator of Fisheries, Interior Department. During World War II special reports
on the distribution of some 20 commodity groups were made for confidential use of the Office of Price
Administration and other war agencies.
Divergence Between Plant and Company Concentration (F. T. C.).—In this 1950 report, the Commission
measured the divergence between plant and company concentration for each of 340 manufacturing industries.
The Divergence Between Plant and Company Concentration, 1947 (162 p). See also Concentration of
Productive Facilities.
Du Pont Investments (F. T. C.).—The Report of the F. T. C. on Du Pont Investments (F. T. C. motion
7/29/27; report, 46 p., o. p. processed, 2/l/29) discussed reported acquisition by E. I. du Pont de Nemours &
Co. of U. S. Steel Corp. stock, together with previously reported holdings in General Motors Corp.
Electric and Gas Utilities, and Electric Power.—See Power.
Farm implements (Senate), Wartime, 1917-18.—The Report of the F. T. C. on the Causes of High Prices
of Farm Implements (inquiry under S. Res. 223, 65th, 5/13/18; report, 713 p, o. p., 5/4/20) disclosed
numerous trade combinations for advancing prices and declared the consent decree for dissolution of
International Harvester Co. to be inadequate. The Commission recommended revision of the decree and the
Department of Justice proceeded to that end.
Farm Implements (F. T. C.).— 1948 report on the Manufacture and Distribution of Farm Implements
(160 p., also 8 p. processed summary) concerns the production and distribution policies of large
manufacturers of farm machinery. The report includes information respecting important developments and
trends In the industry.
Feeds, Commercial (Senate).—Seeking to determine whether purported combinations in restraint of trade
existed (S. Res. 140, 66th, 7/31/19), the Commission found that although some association activities were
in restraint of
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trade, there were no substantial antitrust violations (Report of the F. T. C. on Commercial Feeds, 206 p., o.
p., 3/29/21.
Fertilizer (Senate).—Begun by the Commissioner of Corporations 8 ( S, Res. 487, 62d, 3/1/13 ), this
inquiry disclosed extensive use of bonus independent fertilizer companies for competitive purposes
(Fertilizer Industry, S. Doc. 551, 64th, 269 p., o. p., 8/19/16). Agreements for abolition of such unfair
competition were reached.
Fertilizer (Senate).—A second fertilizer inquiry (S. Res. 307, 67th, 6/17/22) developed that active
competition generally prevailed in that industry in the U. S., although ln some foreign countries combinations
controlled certain important raw materials. The Commission recommended improved agricultural credits and
more extended cooperation by farmers in buying fertilizer (Fertilizer Industry, S. Doc. 347, 67th, 87 p., o.
p., 3/3/23)
Fertilizer (F. T. C.).—The Commission's 1949 report on The Fertilizer Industry (100 p.) is concerned
primarily with restrictions and wastes which interfere with the supply of plant food materials in the quantities
needed and at prices low enough to facilitate maintenance of soil fertility. The Nation's resources of nitrogen,
phosphate, and potash are discussed, and the inter-relationships of producers and mixers are reviewed. The
report also summarizes available information concerning cartel control of nitrogen, phosphates, and potash.
Fish.—See Distribution Methods and Costs.
Flags (Senate), Wartime, 1917-18.—Unprecedented increases in the prices of U. S. flags in 1917, due
to wartime demand, were investigated (S. Res. 35, 65th, 4/16/17). The inquiry was reported in Prices of
American Flags (S. Doc. 82, 65th, 6 p., o. p., 7/26/17).
Flour Milling—See Food, below.
Food (President), Wartime, 1917-18.—President Wilson, as a wartime emergency measure (2/7/17),
directed the Commission "to investigate and report the acts relating to the production, ownership,
manufacture, storage, and distribution of foodstuffs" and "to ascertain the facts bearing on alleged violations
of the antitrust acts." Two major series of reports related to meat packing and the grain trade with separate
inquiries into flour milling, canned vegetables and fruits, canned salmon, and related matters, as listed below.
Food (President) Continued—Meat Packing.—Food Investigation-Report of the F. T. C. on the MeatPacking Industry was published in six parts: I. Extent and Growth of Power of the Five Packers in Meat and
Other industries (6/24/19, 574, p., o. p.); II. Evidence of Combination Among Packers (11/25/18, 294 p., o.
p.); III. Methods of the Five Packers in Controlling the Meat-Packing Industry (6/28/19, 325 p., o. p.); IV.
The Five Large Packers in Produce and Grocery Foods (6/30/19, 390 p., o. p.); V. Profits of the Packers
(6/28/19, 110 p., o. p.); VI. Cost of Growing Beef Animals, Cost of Fattening Cattle, and Cost of Marketing
Livestock (6/30/19, 183 p., o. p.); and summary (H. Doc. 1297, 65th, 51 p., o. p., 7/3/18).
The reports first led to antitrust proceedings against the Big Five Packers, resulting in a consent decree
(Supreme Court of the D. C., 2/27/20),9 which had substantially the effect of Federal legislation, in restricting
their future operations to certain lines of activity. As a further result of the investigation, Con_____________
8

The Commission was created September 26, 1914, upon passage of the Federal Trade Commission Act, sec. 3
of which provided that "all pending investigations and proceedings of the Bureau of Corporations (of the Department
of Commerce) shall be continued by the Commission."
9
The legal history of the consent decree and a summary of divergent economic interests involved in the question
of packers participation in unrelated lines of food products were set forth by the commission in Packer Consent Decree
(S. Doc. 219, 68th, 44 p., o. p., 2/20/25), prepared pursuant to S. Res. 278, 68th, 12/8/24.

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gress enacted the Packers and Stockyards Act (1921), adopting the Commission's recommendation that the
packers be divorced from control of the stockyards. (The meat-packing industry is further referred to under
Meat Packing Profit Limitation, p. 150.)
Food (President) Continued—Grain Trade.—Covering the industry from country elevator to central
market, the Report of the F. T. C. on the Grain Trade was published in seven parts: I. Country Grain
Marketing (9/15/20, 350 p., o. p.); II. Terminal Grain Markets and Exchange (9/15/20, 333 p., o. p ); III.
Terminal Grain Marketing (12/21/21, 332 p, o. p ); IV. Middlemen's Profits and Margins (9/26/23, 215 p.,
o. p.); V. Future Trading Operations in Grain (9/15/20 347 p., o. p.); VI. Prices of Grain and Grain Futures
(9/10/24, 374 p., o. p.); and VII. Effects of Future Trading (6/25/26, 419 p., o. p.). The investigation as
reported in vol. V, and testimony by members of the Commission's staff ( U. S. Congress House Committee
on Agriculture, Future Trading, hearing, 67th, April 25-May 2, 1921) was an important factor in enactment
of the Grain Futures Act (1921). (Further reference to the grain trade is made under Grain Elevators, Grain
Exporters, and Grain Wheat Prices, p. 149 )
Food (President) Continued—Bakeries and Flour Milling.—One F. T. C. report was published by the
Food Administration (U. S. Food Administration, Report of the F. T. C. on Bakery Business in United States,
pp. 5-13, o. p, 1133/17). Other reports were: Food Investigation, Report of the F. T. C. on Flour Milling and
Jobbing (4/4/18, 27 p., o. p.) and Commercial Wheat Flour Milling (9/15/20, 118 p., o. p. ).
Food (President) Continued—Canned Foods,10 Private Car Lines, Wholesale Food Marketing.—Under
the general title Food Investigation were published Report of the F. T. C. on Canned Foods—General Report
and Canned Vegetables and Fruits (5/18/18, 83 p., o. p.); Report of the F. T. C. on Canned Foods— Canned
Salmon (12/27/18, 83 p., o. p.); Report of the F. T. C. on Private Car Lines, regarding transportation of meats,
fruits, and vegetables (6/27/19, 271 p, o. p ); and Report of the F. T. C. on Wholesale Marketing of Food
(6/30/19, 268 p., o. p ), which recommended that a wholesale dealer in perishable food products should be
required to procure a Federal license and that Federal inspection and standards should be provided.
Provisions in accordance with these recommendations were incorporated in the Perishable Agricultural
Commodities Act (1930).
Food—Bread and Flour (Senate).—Reports on this inquiry (S. Res. 163, 68th, 2/26/24) were:
Competitive Conditions in Flour Millings (S. Doc. 97, 70th, 140 p., o. p., 5/3/26); Bakery Combines and
Profits (S. Doc 212, 69th, 95 p., 2/11/27); Competition and Profits in Bread and Fur ( S. Doc. 98, 70th, 509
p, o. p., 1/11/28); and Conditions in the Flour Milling Business, supplementary (S. Doc. 96, 72d, 26 p., o.
p., 5/28/32.
Food—Wholesale Baking Industry (F. T. C.).—This inquiry (F. T. C. Res., 8/31/45) resulted in two
reports to Congress: Wholesale Baking Industry. Part I—Waste in the Distribution of Bread (4/22/46,
processed, 29 p., o. p. and Wholesale Baking Industry, Part II—-Costs, Prices and Profits (8/7/46, 137 p., o.
p.). Part I developed facts concerning wasteful and uneconomic practices in the distribution of bread,
including consignment selling which involves the taking back of unsold bread; furnishing, by gift or lone,
bread racks, stands, fixtures, etc., to induce distributors to handle a given company's products. It was found
that, although War Food Order No. 1 which prohibited these practices was only partially observed, in 1945
as compared with 1942, the quantity of bread saved
___________
10
In connection with its wartime cost findings inquiries, 1917-18, p. 124 herein, the Commission
published Report of the F. T. C. on Canned Foods 1918—Corn, Peas, String Beans, Tomatoes, and Salmon
(86 p., 11/21/21).
113

was sufficient to supply the population of England, Scotland, and Wales with a daily ration of one-third of
a loaf for 30 days, the population of France for 36 days, or the population of Finland for nearly 1 year. The
Commission suggested that "a careful examination of present laws be made by the legislative and executive
branches of the Government to determine what legislation, if any, is needed to permanently eliminate
wasteful trade practices and predatory competition which threaten the existence of many small bakers,
foredoom new ventures to failure and promote regional monopolistic control of the wholesale bread-baking
industry."
Part II presents information concerning prices and pricing practices in the industry, profits earned, and
unit costs of production and distribution. It compares the details of production and distribution costs for
bread and rolls, other bakery products, and for all bakery products for two operating periods in 1945, March
and September. Comparisons of costs are also made for these two periods for plants arranged by geographical
areas. Comparisons of the costs of production and distribution are made by size groups of wholesale bakeries.
Food—Fish.—See Distribution Methods and Costs.
Food—Flour Milling (Senate).—This study of costs, profits, and other factors (S. Res. 212, 67th,
1/18/22) was reported in Wheat Flour Milling Industry (S. Doc. 130, 68th, 130 p., o. p., 5/16/24).
Food—Flour-Milling Industry, Growth and Concentration in (F. T. C.).—The Commission's study
showed that there has been a progressive increase in the size of flour-mill operations and a progressive
decrease in the number of flour-milling establishments. Nevertheless, the Commission reported, there is a
lesser degree of concentration in the Flour-milling industry than in many other important industries. The
results of the study where presented to Congress in a report on the Growth and Concentration in The FlourMilling Industry (6/2/47).
Food—Grain Elevators (F. T. C.), Wartime, 1917-18.—In view of certain bills pending before Congress
with reference to regulation of the grain trade, the Commission, ir; a preliminary report, Profit's of Country
and Terminal Grain Elevators (S. Doc. 40, 67th, 12 p., o. p., 6/13/21) presented certain data collected during
its inquiry into the grain trade ordered by the President.
Food—Grain Exporters (Senate).—The low prices of export wheat in 1921 gave rise to this inquiry (S.
Res. 133, 67th, 12/22/21) concerning harmful speculative price manipulations on the grain exchanges and
alleged conspiracies among country grain buyers to agree on maximum purchasing prices. The Commission
recommended stricter supervision of exchanges and additional storage facilities tor grain not controlled by
grain dealers (Report of the F. T. C. on Methods and Operations of Grain Exporters, 2 vols., 387 p., o. p.,
5/16/22 and 6/18/23.
Food—Grain, Wheat Prices (President).—An extraordinary decline of wheat prices was investigated
(President Wilson's directive 10/12/20) and found to be due chiefly to abnormal market conditions (Report
of the F. T. C. on Wheat Prices for the 1920 Crop, 91 p., o. p., 12/13/20).
Food—Important Food Products.—See Distribution Methods and Costs.
Food—Meat Packing Profit Limitation (Senate), Wartime, 1917-18.—Following an inquiry (S. Res. 177,
66th, 9/3/19 ) involving wartime control of this business as established by the U. S. Food Administration in
1917-18, the Commission recommended greater control and lower maximum profits (Maximum Profit
limitation on Meat Packing Industry, S. Doc. 110, 66th, 179 p., o. p. 9/25/19) .
Food—Milk.-—See Distribution Methods and Costs.
Food—Milk and Milk Products (Senate), Wartime, 1917-18.—Covering an inquiry (S. Res. 431, 65th,
3/3/19) into fairness of milk prices to producers and of canned-milk prices to consumers, the Report of the
F. T. C. on Milk and Milk
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Products 1914-18 (6/6/21, 234 p., o. p.) shoved a marked concentration of control and questionable practices
many of which later were recognized by the industry as being unfair.
Food—Milk and Dairy Products (House).—Competitive conditions in different milk-producing areas
were investigated (H. Con. Res. 32, 73d, 6/15/34). Results of the inquiry were published in seven volumes:
Report of the F. T. C. on the Sale and Distribution of Milk Products, Connecticut and Philadelphia Milksheds
(H. Doc. 152, 74th, 901 p., o. p., 4/5/35); Report of the F. T. C. on the Sale and Distribution of Milk and Milk
Products (Connecticut and Philadelphia milksheds, interim report, H. Doc. 387, 74th, 125 p., o. p., 12/31/35);
Chicago Sales Area (H. Doc. 451, 74th, 103 p., o. p., 4/15/36); Boston, Baltimore, Cincinnati, St. Louis (H.
Doc. 501, 74th, 243 p., o. p., 6/4/36); Twin City Sales Area (H. Doc. 506, 74th. 71 p., o. p., 6/13/36); and
New York Milk Sales Area (H. Doc 95, 75th, 138 p., o. p., 9/30/36). The Commission reported that many
of the industry's problems could be dealt with only by the States and recommended certain legislation and
procedure, both State and Federal (Summary Report on Conditions with Respect to the Sale and Distribution
of Milk and Dairy Products, H. Doc. 94, 75th, 39 p., o. p., 1/4/37). Legislation has been enacted in a number
of States carrying into effect all or a portion of the Commission's recommendations.
Food—Peanut Prices (Senate).—An alleged price-fixing combination of peanut crushers and mills was
investigated (S. Res. 139, 71st, 10/22/29). The Commission found that an industry-wide decline in prices of
farmers' stock peanuts during the business depression was not due to such a combination, although pricing
practices of certain mills tended to impede advancing and to accelerate declining prices (Prices and
Competition Among Peanut Mills, S. Doc. 132, 72d, 78 p., o. p., 6/30/32).
Food—Raisin Combination (Attorney General).—Investigating allegations of a combination among
California raisin growers (referred to F. T. C. 9/30/19), the Commission found the enterprise not only
organized in restraint of trade but conducted in a manner threatening financial disaster to the growers. The
Commission recommended changes which the growers adopted (California Associated Raisin Co., 26 p.,
processed, o. p., 6/8/20).
Food—Southern Livestock Prices (Senate).—Although the low prices of southern livestock in 1919 gave
rise to a belief that discrimination as being practiced, a Commission investigation (S. Res. 133, 66th,
7/25/15) revealed the alleged discrimination did not appear to exist (Southern Livestock Prices, S. Doc. 209,
66th, 11 p., o. p., 2/2/20).
Food—Sugar (House).—An extraordinary advance in the price of sugar in 1919 (H. Res. 150, 66th,
10/1/19) was found to be due chiefly to speculation and hoarding. The Commission made recommendations
for correcting these abuses (Report of the F. T. C. on Sugar Supply and Prices, 205 p., o. p., 11/15/20).
Food—Sugar, Beet (F. T. C.).—Initiated by the Commissioner of Corporations,11 but completed by the
F. T. C., this inquiry dealt with the cost of growing beets and the cost of beet-sugar manufacture (Report o
the Beet Sugar Industry in the U. S., H. Doc. 158, 65th, 164 p., o. p., 5/24/17).
Foreign Trade—Antidumping Legislation (F. T. C.).—To develop information for use of Congress in
its consideration of amendments to the antidumping laws, the Commission studied recognized types of
dumping and provisions for preventing the dumping of goods from foreign countries (Antidumping
Legislation and Other Import Regulations in the United States and Foreign Countries, S. Doc. 112, 73d, 100
p., o. p., l/11/34; supplemental report, 111 p., o. p., processed, 6/27/38).
____________
11

See footnote 8, p. 112.

115

Foreign Trade—Cooperation in American Export Trade (F. T. C.).—This inquiry related to competitive
conditions affecting Americans in international trade. The Export Trade Act, also known as the WebbPomerene law, authorizing the association of U. S. manufacturers for export trade, was enacted as a result
of Commission recommendations ( Cooperation in American Export Trade, 2 vols.,984 p.,o. p., 6/30/16; also
summary, S. Doc. 426, 64th, 7 p., o. p., 5/2/16; and conclusions 1916. 14 p.,o.p.).
Foreign Trade--Cotton Growing Corporation (Senate).—The report of an inquiry (S. Res. 317, 68th,
1/27/25) concerning the development of this British company, Empire Cotton Growing Corporation (S. Doc.
226, 68th, 30 p., o p., 2/28/25), shoved there was then little danger of serious competition with the American
grower or of a possibility that the United States would lose its position as the largest producer of raw cotton.
Gasoline.—See Petroleum.
Grain.—See Food.
Grain Exchange Actions (F. T. C. and Chairman of Senate Committee on Agriculture and
Forestry).—The Commission's report on Economic Effect of Grain Exchange Actions Affecting Futures
Trading During the First Six Months of 1946 (85 p., 2/4/47) presents results of a special study made at the
request of the then Chairman of the Senate Committee on Agriculture and Forestry. The report reviews the
factors which made it impossible, during the first half of 1946, for futures trading to be conducted in the
usual manner on the Chicago, Kansas City and Minneapolis grain exchanges under existing conditions of
Government trice control and severe restrictions on the movement of short supplies of free grain in the cash
market. The report also discusses the economic effects of emergency actions taken by the exchanges on the
interests trading in futures, and suggests, among other things, that both the Commodity Exchange Act and
the U. S. Warehouse Act "should be so amplified and coordinated, or even combined, as to make effective
the type and scope of regulation over futures trading contemplated by the Congress in enacting the
Commodity Exchange Act."
Guarantee Against Price Decline (F. T. C.).—Answers to a circular letter (12/26/19) calling for
information and opinions on this subject were published in Digest of Replies in Response to an Inquiry of
the F. T. C. Relative to the Practice of Giving Guarantee Against Price Decline (68 p., o. p. 5/27/20),
Housefurnishings (Senate). —This inquiry (S. Res. 127, 67th, 1/4/22) resulted in three volumes showing
concerted efforts to effect uniformity of prices in some lines (Report of the F. T. C. on Housefurnishing
Industries, 1018 p., o. p., 1/17/23, 10/1/23, and 10/6/24).
Independent Harvester Co. (Senate), Wartime, 1917-18.—After investigation (S. Res. 212, 65th, 3/11/18)
of the organization and methods of operation of the company which had been formed several years before
to compete with the "harvester trust,” but which had passed into receivership, the F. T. C. Report to the
Senate on the Independent Harvester Co. (5 p., release, processed, o. p., 5/15/18) showed the company's
failure was due to mismanagement and insufficient capital.
Interlocking Directorates (F. T. C.).—This 1950 report on Interlocking Directorates summarizes the
interlocking relationships among directors of the 1,000 largest manufacturing corporations. It also covers the
interlocking directorates between these corporations and a selected list of banks, investment trusts, Insurance
companies, railroads, public utilities, and distributive enterprises.
International Alkali Cartels (F. T. C.).—In a report (1950) on International Cartels in the Alkali Industry,
the Commission discussed the nature, extent, and effect of international agreements concerning baking soda,
soda ash, and caustic soda to which organized groups of American and European alkali producers were
parties from 1024 until 1946.
116

International Electrical Equipment Cartel (F. T. C.).—In its 1948 report on this subject ( 107 p., also 10
p. processed summary ) the Commission points out the high degree of economic concentration ln the
electrical equipment industry which exists in each of the important industrial nations.
International Petroleum Cartel.— staff study of the activities of the seven major oil companies, in
relation to control over the international oil industry. Staff Report to the Federal Trade Commission
submitted to the Subcommittee on Monopoly of the Select Committee on Small Business, U. S. Senate
Committee print No. 6, 82d Cong.—2d sess. 378 p., 1952
International Phosphate Cartels (F. T. C.).—The F. T. C. Report on International Phosphate Cartels (F.
T. C. Res. 9/19/44) developed facts with respect to the practices, arrangements between domestic phosphate
companies and foreign competitors through international cartels, through which minimum export prices were
fixed. These prices varied from market to market, depending upon competition, ocean freight rates, and
other factors. The agreements established fixed quotas in each grade, and sales were allocated among
members of the Phosphate Export Association according to their quotas and the grade involved. The report
(processed, 60 p.) was transmitted to Congress 5/1/46.
International Steel Cartels (F. T. C.).— report to Congress concerning numerous cartel agreements
relating to steel which were adopted between World War I and World War II. Certain American companies
participated in these agreements, which were both national and international in scope. The international
agreements allotted quotas to the different national groups, fixed pries in the export trade, and established
reserved and unreserved areas. (International Steel Cartels (1948), 115 p., also 12 p. processed summary.)
Iron Ore.—See Control of Iron Ore.
Large Manufacturing Companies (F. T. C.).—This 1951 report, entitled List of 1,000 Large
Manufacturing Companies. Their Subsidiaries and Affiliates, 1948, shows for each of the 1,000 largest
manufacturing corporations which publish financial statements the percentage of stock interest held by the
corporation in each of its subsidiaries and affiliates. The parent corporations are grouped in 21 major
industries and ranked as to size on the basis of their total assets in 1948, 223 p., 6/1/51.
Leather and Shoes (F. T. C. and House), Wartime, 1917-18.—General complaint regarding high prices
of shoes led to this inquiry, which is reported in Hide and Leather Situation, preliminary report (H. Doc. 857,
65th, 5 p., o. p., 1/23/18), and Report on Leather and Shoe Industries (180 p., o. p. 8/21/19). A further study
(H. Res. 217, 66th, 8/19/19) resulted in the Report of the F. T. C. On Shoe and Leather Costs and Prices (212
p., o. p., 6/10/21)
Lumber—Costs.—See Wartime Cost Finding, 1917-18.
Lumber Trade Associations (Attorney General).-—The Commission's extensive survey of lumber
manufacturers' associations {referred to F. T. C., 9/4/19) resulted in Department of Justice proceedings
against certain associations for alleged antitrust law violations. Documents published were: Report of the
F. T. C. on Lumber Manufacturers' Trade Associations, incorporating regional reports of 1/10/2:1, 2718/21,
6/9/21, and 2/15/22 (150 p., o. p.); Report of the F. T. a. on Western Red Cedar Association, Lifetime Post
Association, and Western Red Cedarmen's Information Bureau (22 p., o. p., 1/24/23), also known as
Activities of Trade associations and Manufacturers of Posts and Poles in the Rocky Mountain and
Mississippi Valley Territory (S. Doc. 293, 67th, o. p.); and Report of the F. T. C. on Northern, Hemlock and
Hardwood Manufacturers Association (52 p., o. p., 6/7/23).
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Lumber Trade Association (F. T. C.).—Activities of five large associations were investigated in
connection with the Open-Price Associations inquiry to bring down to date the 1919 lumber association
inquiry (Chap. VIII of Open Price Trade Associations, S. Doc. 226, 70th, 516 p., o. p., 2/13/29).
Meat-Packing Profit Limitations.—See Food.
Mergers (F. T. C.).—( See Corporate Mergers. )
Milk.—See Food.
Millinery Distribution (President).—This inquiry, requested by President Roosevelt, embraced growth
and development of syndicates operating units for retail millinery distribution, the units consisting of leased
departments in department or specialty stores (Report to the President of the United States on Distribution
Methods in the Millinery Industry, 65 p., processed, 11/21/30).
Monopolistic Practices and Small Business.—A study by the staff of the Commission on the effect of
certain monopolistic practices on small business, requested by the Subcommittee on Monopoly of the Senate
Select Committee on Small Business. The results were transmitted to the Subcommittee and published as a
committee print by Select Committee on Small Business, U. S. Senate, 82d Cong. (88 p. 3/31/52).
Motor Vehicles (Congress).-—Investigating ( Public Res. 87, 75th, 4/13,38 ) distribution and retail sales
policies of motor vehicle manufacturers and dealers, the Commission found, among other things, a high
degree of concentration and strong competition; that many local dealers' associations fixed prices and
operated used-car valuation or appraisal bureaus essentially as combinations to restrict competition; that
inequities existed ln dealer agreements and in certain manufacturers' treatment of some dealers; and that
some companies' car finance plans developed serious abuses (Motor Vehicle Industry, H. Doc. 468, 76th,
1077 p., o. p., 6/5/39). The lending companies voluntarily adopted a number of the Commission's
recommendations as company policies.
National Wealth and Income (Senate).—In 1922 the national wealth was estimated (inquiry pursuant to
S. Res. 451, 67th, 2/28/23) at $353,000,000,000 and the national income in 1923 at $70,000,000,000
[National-Wealth, and Income (S. Doc.126, 69th, 381 p., o. p., 5/25/26) and Taxation and Tax-Exempt
Income (S. Doc.148, 68th, 144 p., o. p., 6/6/24)].
Open-Price Associations (Senate).—An investigation ( S. Res. 28, 69th, 3/17/25) to ascertain the number
and names of so-called open-price associations, their importance in industry and the extent to which members
maintained uniform prices, was reported in Open-Price Trade Associations (S. Doc. 226, 70th, 516 p., o. p.,
2/13/29).
Packer Consent Decree.—See Food (President) Continued—Meat Packing.
Paper—Book (Senate), Wartime, 1917-18.—This inquiry (S. Res. 269, 64th, 9/7/1;) resulted in
proceedings by the Commission against certain manufacturers to prevent price enhancement and the
Commission recommended legislation to repress trade restraints [Book Paper Industry—A Preliminary
Report (S. Doc. 45, 65th, 11 p., o. p., 6/13/17), and Book Paper Industry—Final Report (S. Doc. 79, 65th,
125 p., o. p., 8/21/17) ].
Paper—Newsprint (Senate), Wartime, 1917-18.—High prices of newsprint (S. Res. 177, 64th, 4/24/16)
were shown to have been partly a result of certain news print association activities in restraint of trade.
Department of ,Justice proceedings resulted in abolishment of the association and indictment of certain
manufacturers. The Commission for several years conducted monthly reporting of production and sales
statistics, and helped provide some substantial relief for smaller publishers in various parts of the country.
[Newsprint Paper Industry, preliminary (S. Doc. 3, 65th, 12 p., o. p., 3/3/17; Report of the F. T. C. on the
Newsprint Paper Industry (S. Doc. 49, 65th) 162 p., o. p., 6/13/17); and News118

print Paper Investigation (in response to S. Res. 95, 65th, 6/27/17; S. Doc. 61, 65th, 8 p., o. p., 7/10/17) ].
Paper—Newsprint (Senate).—The question investigated (S. Res. 337, 70th, 2/27/29) was whether a
monopoly existed among newsprint manufacturers and distributors in supplying paper to publishers of small
dailies and weeklies (Newsprint Paper Industry, S. Doc. 214, 71st, 116 p., o. p., (6/30/30).
Petroleum.—See International Petroleum Cartel.
Petroleum Products.—See Distribution Methods and Costs.
Petroleum and Petroleum Products, Prices (President and Congress).—At different times the Commission
has studied prices of petroleum and petroleum products and issued reports thereon as follows: Investigation
of the Price of Gasoline, preliminary (S. Doc. 403, 64th, 15 p., o. p., 4/10/16) and Report on the Price of
Gasoline in 1915 (H. Doc. 74, 65th, 224 p., o. p., 4/11/17—both pursuant to S. Res. 109, 63d, 6/18/1312 and
S. Res. 457, 63d, 9/28/14, which reports discussed high prices and the Standard Oil Companies’ division of
marketing territory among themselves, the Commission suggesting several plans for restoring effective
competition; Advance in the Prices of Petroleum Products (H. Doc. 801, 66th, 57 p., o. p., 6/1/20)—pursuant
to H. Res. 501, 66th, 4/5/20, in which report the Commission made constructive proposals to conserve the
oil supply; Letter of Submittal and Summary of Report on Gasoline Prices in 1924 (24 p. processed, 6/4/24,
and Cong. Rec., 2/28/25, p. 5158)—pursuant to request of President Coolidge, 2/7/24; Petroleum
Industry—Prices, Profits and Competitions (S. Doc. 61, 70th, 360 p., o. p., 12/12/27)—pursuant to S. Res.
31, 69th, 6/3/36; Importation of Foreign Gasoline at Detroit, Mich., (S. Doc. 206, 72d, 3 p., o. p.,
2/27/33)—pursuant to S. Res. 274, 72d, 7/16/32; and Gasoline Prices (S. Doc. 178, 73d, 22 p., o. p.,
5/10/34)—pursuant to S. Res. 166, 73d, 2/2/34.
Petroleum—Foreign Ownership (Senate).—Inquiry was made ( S. Res. 311, 67th, 6/29/22) into
acquisition of extension oil interests in the U. S. by the Dutch-Shell organization, and into discrimination
allegedly practiced in foreign countries against American interests (Report of the F. T. C. on Foreign
Ownership in the Petroleum Industry, 152 p., o. p., 2/12/23).
Petroleum Pipe Lines (Senate).—Begun by the Bureau of Corporations,13 this inquiry ( S. Res. 109, 63d,
6/18/13) showed the dominating importance of the pipe lines of the great midcontinent oil fields and reported
practices of the pipeline companies which were unfair to small producers (Report on Pipe-Line
Transportation of Petroleum, 467 p., o. p., 2/28/13), some of which practices were later remedied by the
Interstate Commerce Commission.
Petroleum—Regional Studies (Senate and F. T. C.).—Reports published were: Pacific Coast Petroleum
Industry (two parts 4/7/21 and 11/28/21, 538 p., o. p.)—pursuant to S. Res. 138, 66th, 7/31/19; Reports of
the F. T. C. On the Petroleum Industry of Wyoming (54 p., o. p., 1/3/21)—pursuant to F. T. C. Motion;
Petroleum Trade in Wyoming and Montana (S. Doc. 233, 67th, 4 p., o. p., 7/13/22—pursuant to . T. C.
motion, in which report legislation to remedy existing conditions was recommended; and Report of the F.
T. C. motion, 10/6/26 (inn response to requests of producers of crude petroleum).
Potomac Electric Power Co. (Procurement Director, United States Treasury).— study (2/29/94) of the
financial history and operations of this corporation for the years 1896-1943 was made at the request of the
Director of Procure______________
12

See footnote 8, p. 112.
See footnote 8, p. 112. Conditions in one of the midcontinent fields were discussed by the Bureau of Corporations
in Conditions in the Healdton Oil Field (Oklahoma) (116 p., 3/15/15).
13

119

meet, United States Treasury, and the report thereon was introduced into the record in the corporation's
electric rate case before the District of Columbia Public Utilities Commission.
Power—Electric (Senate).—This inquiry (. Res. 329, 68th, 2/9/25) resulted In two reports, the first of
which, Electric Power Industry—Control of Power Companies (S. Doc. 213, 89th, 272 p., o. p., 2/21/27)
dealt with the organization, control, and ownership of commercial electric-power companies. It called
attention to the dangerous degree to which pyramiding had been practiced in superimposing a series of
holding companies over the underlying operating companies, and was influential in bringing about the more
comprehensive inquiry described under Power—Utility Corps., below. Supply of Electrical Equipment and
Competitive Conditions (S. Doc. 46, 70th, 282 p., o. p., 1/12/28) showed, among other things, the dominating
position of General Electric Co. in the equipment field.
Power—Interstate Transmission (Senate).--Investigation ( S. Res. 151, 71st, 11/8/28)) was made of the
quantity of electric energy transmitted across State lines and used for development of power or light, or both
(Interstate Movement of Electric Energy, S. Doc. 238, 71st, 134 p., o. p., 12/20/30).
Power—Utility Corporations (Electric and Gas Utilities) (Senate).—This extensive inquiry ( S. Res. 83,
70th. 2/15/28: Public Res. 46, 73d 6/1/34; and F. T. C. Act, Sec. 6) embraced the financial set-up of electric
and gas utility companies operating in interstate commerce and of their holding companies and other
companies controlled by the holding companies. The inquiry also dealt with the utilities' efforts to influence
public opinion with respect to municipal ownership of electric utilities. The Commission's reports and
recommendations, focusing congressional attention upon certain unfair financial practices in connection with
the organization of holding companies and the sale of securities, were among the influences which brought
about enactment of such remedial legislation as the Securities Act (1933), the Public Utility Holding
Company Act (1935), the Federal Power Act (1935), and the Natural Gas Act (1938).
Public hearings were held on all phases of the inquiry and monthly interim reports presented hundreds
of detailed studies by the Commission's economists, attorneys, accountants, and other experts, based on
examination of 29 holding companies having $6.108,128,713 total assets; 70 subholding companies with
$5,685,463,201 total assets; and 278 operating companies with $7,245,106,464 total assets. The testimony,
exhibits, and final reports (Utility Corporations, S. Doc. 92 70th) comprised 95 volumes.14
Price Bases `(F. T. C.).—-More than 3,000 manufacturers representing practically eery industrial
segment furnished data for this study (F. T. (. motion, 7/27/27) of methods used for computing delivered
prices on industrial products and of the actual and potential influence of such methods on competitive
markets and price levels. In the cement industry the basing-point method " was found to have a tendency to
establish unhealthy uniformity of delivered prices and cross-hauling or cross-freighting to be an economic
evil (Report of the F. T. C. On Price Bases Inquiry, Basing-Point Formula, and Cement Prices, 218 p., o. p.,
3/26/32). Illustrating the use in a heavy commodity industry of both a modified zone-price system and a
uniform delivered-price system, the Commission examined price schedules of the more important
manufacturers of range boilers, 1932-36, disclosing that the industry operated under a zone-price formula,
both before and after adoption of its N. R. A. code (Study of Zone-Price Formula in
______________
14

Final reports were published in 1935; a general index in 1937. Some of the volumes are out of print. For report
titles, see F. T. C. Annual Reports, 1935, p. 21, and 1936, p. 36.
15
Basing-point systems are also discussed in the published reports listed under “Cement,” “Steel Code,” and ‘Steel
Sheet Piling” herein.

120

Range Boiler Industry, 5 p., processed, 3/30/36, a summary based on the complete report which was
submitted to Congress but not printed).
Price Delation (President).—To an Inqulry (3/21/21) of President Hardlng, the Commission made prompt
reply (undated) preseuting Its views of the causee of a dislroportional decline of agricultural prices compared
with consumer' prices (Letter of the F. T. C. to the President of the U. S., 8 p., o. p.).
Profiteering (Senate), Wartime, 1917-18.—Current conditions of profiteering (S. Res. 255, 65th, 6/10/18)
as disclosed by various Commission investigations were reported in Profiteering ( S. Doc. 248, 65th, 20 p.,
o. p., 6/29/18).
Quarterly Financial Reports United States Manufacturing Corporations (F. T. C. and S. E. C.).—This
19473 series of reports is intended to meet the general needs of the Government and the public for current
reliable corporation financial data. The reports show the aggregate estimates for American manufacturing
corporations as derived from reports collected by the Federal Trade Commission and the Securities and
Exchange Commission. This work is based upon resumption by F. T. C. of its prewar financial reporting
function and Continuation by S. E. C. of its current responsibilities for collection of financial information
from corporations with securities registered on a national exchange. F. T. C. obtains comparable information
from a carefully selected sample of small, medium size and large nonregistered corporations. The sample has
been designed so that the two sets of data can be combined to provide estimates for 21 major industry groups
(increased to 23 major groups in 1951) as well as the aggregate for all manufacturing corporations. The
Quarterly Financial Reports formerly were known as Industrial Corporation Reports.
Quarterly Financial Report, United States Retail and Wholesale Corporation.— This presents estimates
of the income statements and balance sheets for the total operations of United States wholesale trade
corporations (merchant wholesalers only) and retail trade corporations, for various industrial segments of
retailing and merchant wholesaling, and for different sizes of business in retailing and merchant wholesaling.
These estimates are for the year 1950 and each of the four quarters of 1951. There were compiled from
financial statements received from individual corporations.
Quarterly Financial Report, Five Manufacturing Industries, 1947-51.—This presents averages of the
quarterly income statements and balance sheets for the total operations of representative samples of
manufacturing corporations (with average annual sales within a specified range) in specific industries and
in a specific geographical region.
Radio (House).-—A comprehensive investigation of the radio industry (H. Res 548, 67th, 3/4/23);
Report of the F. T. C. on the Radio Industry, 347 p., o. p,, 12/1/23) contributed materially to enactment of
the Radio Act of 1327 and the succeeding Federal Communications Act of 1934. The investigation was
followed by Commission and Department of Justice Proceedings on monopoly charges which culiminated
in a consent decree (11/2/32; amended, 11/2/35).
Rags, Woolen.—See Textiles.
Raisin Combination.—See Food.
Range Boilers.—See Price Bases.
Rates of Return in Selected Industries (F. T. C.).—A comparison of the prewar (World War II) and
postwar rates of return on stockholders' investments after taxes for more than 500 identical manufacturing
corporations. The present report, published annually, covers the years 1940 and 1947-52, includes 25 selected
manufacturing industries.
Resale Price Maintenance (F. T. C.).—The question whether a manufacturer of standard articles,
identified by trade-mark or trade practice, should be permitted to fix by contract the price at which purchasers
should resell them, led
382867—56——9

121

to the first inquiry, resulting in a report, Resale Price Maintenance (H. Doc 1480, 65th, 3 p., o. p., 12/2/18).
Other reports were: A Report on Resale Price Maintenance ( H. Doc. 145, 66th, 3 p., o. p., 6/30/19) and
Resale Price Maintenance (F. T. C motion,, 7/25/27; reports, Part I, II. Doc. 546, 70th, 141 p., o. p., 1/30/29,
and Part II, 215 p.,o. p., 6/22/31). The Report of the F. T. C. on Resale Price Maintenance, o. p., (F. T. C.
Res., 4/25/39) was submitted to Congress 12/13/45. The inquiry developed facts concerning the programs
of trade organizations interested in the extension and enforcement of' minimum resale price maintenance
contracts, and the effects of the operation of such contracts upon consumer prices and upon sales volumes
of commodities in both the price-maintained and none price-maintained categories.
Rubber Tires and Tubes.—See Distribution Methods and Costs.
Salaries (Senate).—The Commission investigated (S. Res. 75, 73d, 5/29/33) salaries of executives and
directors of corporations (other than public utilities) engaged in interstate commerce, such corporations
having more than $1,000,000 capital and assets and having their securities listed on the Nev York stock: or
curb exchanges. The Report of the F. T C. on Compensation of Officers and Directors of Certain
Corporations (15 p., processed, 2/26/14) explained the results of the inquiry.16 The facts developed focused
the attention of Congress on the necessity of requiring listed corporations to report their salaries.
Southern Livestock Prices.--See Food.
Steel Code and Steel Code as Amended (Senate and President).—The Commission investigated (S. Res.
166 73d, 2/2/34) price fixing, price increases, and other matters (Practices of the Steel Industry Under the
Code, S. Doc. 159, 73d, 79 p.,o. p., 3/19/34) and the Commission and N. R. A. studied the effect of the
multiple basing-point system under the amended code (Report of the F. T. C. to the President in response
to Executive Order of May 30, 1934, With Respect to the Basing-point System in the Steel Industry, 125 p.,
o p., 11/30/34).17 The Commission recommended important code revisions.
Steel Companies, Proposed Merger (Senate).—An inquiry (S. Res. 286, 67th 6/12/22 ) into a proposed
merger of Bethlehem Steel Corp., and Lackawanna Steel Co., and of Midvale Steel & Ordnance Co.,
Republic Iron & Steel Co., and Inland Steel Co., resulted in a two-volume report. Merger of Steel and Iron
Companies ( S. Doc. 208, 67th, 11 p., o. p., 6/5/22 and 9/7/22).
Steel Costs and Profits.—See Wartime Cost Findings, 1917-18.
Steel Sheet Piling—Collusive Bidding (President).—Steel sheet piling prices on certain Government
contracts in New York, North Carolina, and Florida were investigated (inquiry referred to F. T. C. 11/20/35).
The F. T C. Report to the President on Steel Sheet Piling (42 p., processed, 6/10/36 o. p.) demonstrated the
existence of collusive bidding because of a continued adherence to the basing-point system18 and provisions
of the steel industry's code.
Stock Dividends (Senate).—The Senate requested ( S. Res. 304, 69th, 12/22/26) the names and
capitalizations of corporations which had issued stock dividends, and the amounts thereof, since the Supreme
Court decision (3/8/20) holding that such dividends were not taxable. The same information for an equal
period prior to the decision was also requested. The Commission submitted a list of 10,245 corporations,
pointing out that declaration of stock dividends at the rate prevailing did not appear to be a result of
controlling necessity and seemed
_______________
16
The salary lists do not appear in the report but are available for inspection.
17
As of the same date, the N. R. A. published its Report of the National Recovery Administration on
the Operation of the Basing Point System in the Iron and Steel Industry (175 p., processed). The basingpoint system is also discussed in published reports listed under “Cement” and “Price Bases” herein.
18
See footnote 15, p. 120.
122

questionable as a business policy (Stock Dividends, S. Doc. 26, 70th, 273 p., o. p., 12/5/27).
Sugar.—See Food.
Sulphur industry (F. T. C.).—In its report to Congress on The Sulphur Industry and International Cartels
(6/16/47), the Commission stated that the operations of all four producers constituting the American sulphur
industry generally have been highly profitable, and that the indications are that foreign cartel agreements
entered into by Sulphur Export Corp., an export association organized under the Webb-Pomerene Law, have
added to the profitability of the U. S. industry. On 2/7/47, after hearings, the Commission recommended that
Sulphur Export Corp. readjust its business to conform to law.
Taxation and Tax-Exempt Income.—See National Wealth and Income.
Temporary National Economic Committee, Studies of the F. T. C.—See F. T. C. Annual Report, 1941,
p. 218, for titles.
Textiles (President).—President Roosevelt (Executive Order of 9/26/34) directed an inquiry into the
textile industry's labor costs, profits, and investment structure to determine whether increased wages and
reduced working hours could be sustained under prevailing economic conditions. Reports covering the
cotton, woolen and worsted, silk and rayon, and thread, cordage and twine industries were: Report of the
F. T. C. on Textile Industries, Parts I to VI, 12/31/34 to 6/20/35, 174 p., o. p. (Part VI financial tabulations
processed 42 p., o. p. ); Report of the F. T. C. on the Textile Industries in 1933 and 1934 ), Parts I to IV;
8/1/35 to 12/5/35, 129 p., o. p.; Parts II and III, o. p. (Part IV, processed, 21 p., o. p.; accompanying tables,
processed, 72 p., o. p.); Cotton Spinning Companies grouped by Types of Yarn Manufactured During 1933
and 1934, 1/31/36, 20 p., processed, o. p.; Cotton Weaving Companies grouped by Types of Woven Goods
Manufactured During 1933 and 1934, 3/24/36, 48 p., processed, o. p.; Textile Industries in the First Half of
1935, Parts I to III, 5/22/36 to 8/22/36, 119 p., processed, o. p.; Textile Industries in the Last Half of 1935,
Parts I to III, 11/20/36 to 1/6/37, 155 p., processed, o. p.; and Textile Industries in the First Half of 1936,
Parts I to III, 1/21/37 to 2/11/37, 163 p., processed, o. p.
Textiles—Combed Cotton Yarns.—High prices of combed cotton yarns led to this inquiry (H. Res. 451,
66th, 4/5/20) which disclosed that while for several years profits and prices had advanced, they declined
sharply late in 1920 (Report of the F. T. C. on Combed Yarns, 94 p., o. p., 4/14/21).
Textiles—Cotton Growing Corporation.—See Foreign Trade.
Textiles—Cotton Merchandising (Senate).—Investigating abuses in handling consigned cotton (S. Res.
252, 68th, 6/7/24), the Commission made recommendations designed to correct or alleviate existing
conditions (Cotton Merchandising Practices, S. Doc. 194, 68th, 38 p., o. p., 1/20/25).
Textiles—Cotton Trade (Senate).—Investigation (S. Res. 262, 67th, 3/29/22) involved a decline in
cotton prices, 1920-22, as reported in Preliminary Report of the F. T. C. on the Cotton Trade (S. Doc. 311,
67th, 28 p., o. p., 2/26/23). After a second inquiry (S. Res. 429, 67th, 1/31/23), the Commission
recommended certain reforms in trading practices and particularly in permitting Southern delivery of cotton
on New York futures contracts (The Cotton Trade, incl. testimony, S. Doc. 100, 68th, 2 vols., 510 p., o. p.,
4/28/24). A subsequent Senate bill (S. 4411, 70th, 5/18/28) provided for Southern warehouse delivery, but,
before any law was enacted, the New York Cotton Exchange adopted Southern delivery on Nev York futures
contracts (11/16/28 and 2/26/30) in accordance with the Commission's recommendations.
Textiles—Woolen Rag Trade (F. T. C.), Wartime, 1917-18.—The Report on the Woolen Rag Trade (90
p., o. p., 6/30/19) contains information gathered during
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the World War, 1317-18, at the request of the War Industries Board, for its use in regulating the prices of
woolen rags employed in the manufacture of clothing.
Tobacco (Senate).—Inquiry (S. Res. 323, 2/9/26) into activities of two well-known companies disclosed
that alleged illegal agreements or conspiracies did not appear to exist. (The American Tobacco Co. and the
Imperial Tobacco Co., S. Doc. 34, 69th, 129 p., o. p., 12/25/25).
Tobacco Marketing—Leaf (F. T. C.).—Although representative tobacco farmers in 1929 alleged
existence of territorial and price agreements among larger manufacturers to control cured leaf tobacco prices,
the Commission found no evidence of price agreements and recommended production curtailment and
improvement of marketing processes and cooperative relations (Report on Marketing of Leaf Tobacco in
the Flue-Cured Districts of the States of North Carolina and Georgia, 54 p., o. p., processed, 5/23/31).
Tobacco Prices (Congress).—Inquiries with respect to a decline of loose-leaf tobacco prices following
the 1919 harvest (H. Res. 533, 66th, 6/3/20) and low tobacco prices as compared with high prices of
manufactured tobacco products (3. Res. 129, 67th, 8/9/21) resulted in the Commission recommending
modification of the 1911 decree (dissolving the old tobacco trust) to prohibit permanently the use of
common purchasing agencies by certain companies and to bar their purchasing tobacco under any but their
own names (Report of the F. T. C. on the Tobacco Industry, 162 p., o. p., 12/11/20, and Prices of Tobacco
Products, H. Doc.121, 67th, 109 p., o. p., 1/17/22).
Trade and Tariffs in South America (President). Growing out of the First Pan-American Financial
Conference held in Washington, lay 2029, 1915, this inquiry (referred to F. T. C. 7/22/15) was for the
purpose of furnishing necessary information to the American branch of the International High Commission
appointed as a result of the conference. Customs administration and tariff policy were among subjects
discussed in the Report on Trade and Tariffs in Brazil, Uruguay, Argentina, China, Bolivia, and Peru (246
p., o. p., 6/30/16.
Twine.—See Sisal Hemp and Textiles.
Utilities.—See Power.
Wartime Cost Finding (President), 1917-18.—President Wilson directed the Commission (7/25/17) to
find the costs of production of numerous raw materials and manufactured products. The inquiry resulted in
approximately 370 wartime cost investigations. At later dates reports on a few of them were published,!
including: Cost Reports of the F. T. C.—Copper (26 p., o. p., 6/30/19); Report of the F. T. C. on Wartime
Costs and Profits of Southern Pine Lumber Companies (34 P., /. P., 5/1/22); and Report of the F. T. C. on
Wartime Profits and Costs of the Steel Industry (138 p., o. p., 2/18/26). The unpublished reports20 cover a
wide variety of subjects. On the basis of the costs as found, prices were fixed, or controlled in various
degrees, by Government agencies such as the War and Navy Departments, War Industries Board, Price
Fixing, Committee, Fuel Administration, Food Administration, and Department of Agriculture. The
Commission also conducted cost inquiries for the Interior Department, Tariff Commission, Post Office
Department, Railroad Administration, and other Government departments or agencies. It is estimated that
the inquiries helped to save the country many millions of dollars by checking unjustifiable price advances.
Wartime Costs and Profits (F. T. C.).—Cost and profit information for 4,107 identical companies for
the period 1941-45 is contained in a Commission report on Wartime Costs and Profits for Manufacturing
Corporations, 1941 to 1945 (30 p., processed, with 10 p. appendix). Compilation of the information
_____________
19

See footnote 10, p. 113.
Approximately 260 of the wartime cost inquiries are listed in the F. T. C. Annual Reports, 1918, pp. 29-30, and
1919, pp. 38-42, and in World War Activities of the F. T. C., 1917-18 (69 p., processed, 7/15/40).
20

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contained in the report was begun by the Office of Price Administration prior to the transfer of the financial
reporting [unction of that agency to the Federal Trade Commission in December 1946.
Wartime Inquiries, 1917-18, Continued.—Further wartime inquiries of this period are described herein
under the headings: Coal, Coal Reports—Cost of Production, Cost of Living, Flags, Food, Farm Implements,
Independent Harvester Co., Leather and Shoes, Paper—Book, Paper—Nev`,sprint, Profiteering, and
Textiles—Woolen Rag Trade.

The following are unpublished investigations by the
Commission for the use of other government agencies:
Aluminum Foundries (W. P. B.), Wartime, 1942-43.—Details were obtained for the War Production
Board, at its request, from aluminum foundries throughout the U. S. covering their operations for May 1942
and their compliance with W. P. B. Supplementary Orders m-l-d, M-1-c, and M-1-f.
Antifreeze Solutions, Manufacturers of (W. P. B.), Wartime, 1943-44.—War Production Board Order
1268 of 1/20/43 prohibited production of salt and petroleum-base antifreeze solutions. While production of'
these products had ceased, great quantities were reported to be still in the hands of producers and
distributors. To enable W. P. B. to determine what further action should be taken to protect essential
automotive equipment from these solutions, it requested the Commission to locate producers' inventories
as of 1/20/43, and to identify all deliveries made from such inventories to distributors subsequent to that
date.
Capital Equipment (\V. P. B.), Wartime, 1942-43.—For the War Production Board, a survey was made
in connection with Priorities Regulation No. 12, as amended 10/3/42, of concerns named by it to determine
whether orders had been improperly related to secure capital equipment or whether orders that had been
rerated had been extended for the purpose of obtaining capital equipment ln violation of priorities
regulations.
Chromium Processors (W. P. B.), Wartime, 1912-43.—For the War Production Board, the Commission
investigated the transactions of the major chromium processors to determine the extent to which they were
complying, with Amendment No. 2 to W. P. B. General Preference Order No. m-18a, issued 2/4/42. The
investigation nas conducted concurrently with a survey of nickel processors.
Commercial Cooking and Food and Plate Warming Equipment, Manufacturers of (W. 13. B.), Wartime,
1942-43.—The Commission conducted an investigation for the War Production Board to determine whether
manufacturers of commercial cooking and plate warming equipment were complying with W. P. B.
Limitation Orders L-182 and L-182 as amended 3/2/43; Conservation Orders M-126 and M-9-c, as amended;
and Priorities Regulation No. 1.
Contractors, Prime, Forward Buying Practices of (W. P. B.), Wartime, 1942-43.—The matter of
procurement, use, and inventory of stocks of critical materials involved in the operation of major plaints
devoting their efforts to war production was inquired into for the information of the War Production Board.
Items such as accounting, inventory, control, purchase, practices, etc., formed a part of the inquiry.
Copper Base Alloy Ingot Makers (W. P. B.), Wartime, 1942-43.—This investigation was designed to
ascertain the operations, shipments, and inventories of copper, copper alloys, copper scrap, and copper base
alloy ingot makers and was conducted for the purpose of determining the extent to which they were
complying with governing W. P. B. Preference and Conservation Orders M-9-a and b, and M-9-c.
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Copper, Primary Fabricators of (W. P. B.), Wartime, 1941-42.—A survey and inspection of a specified
list of: companies which used a large percentage of all refinery copper allocated, and at the same time
represented a fair cross-section of the industry, were made to ascertain the degree of compliance accorded
to preference, supplementary, and conservation orders and regulations of the Director of Priorities, Office
of Production Management (later the War Production Board ).
Cost of Living (President).—President Roosevelt, In a published letter (11/16/37), requested the
Commission to investigate living costs. The Commission (11/20/37) adopted a resolution undertaking the
inquiry and a few months thereafter submitted a report to the President.
Costume Jewelry, Manufacturers of (W. P. B.), Wartime, 1943-44.—Because it appeared that vast
quantities of critical metals were being diverted illegally from war use to the manufacture of costume
jewelry and similar items, the War Production Board requested the Commission to investigate 45
manufacturers to ascertain the facts concerning their compliance with W. P. B. Orders M-9-a, M-9-b, M-9-c,
M-9-c-2, M-43, M-38, M-11, M-11-b, M-126, L-81, L-131, and L-131-a, all as amended.
Electric Lamp Manufacturers (W. P. B.), Wartime, 1942-43.—At the direction of the War Production
Board, an investigation was made of the activities of manufacturers of portable electric lamps whose
operations were subject to the restrictions imposed by W. P. B. Limitation and Conservation Orders L-33
and M-9-c.
Fertilizer and Related Products (O. P. A.), Wartime, 1942-43.—At the request of O. P. A. (June 1942),
the Commission investigated costs, prices, and profits in the fertilizer and related products industries. The
inquiry developed information with reference to the operations of 12 phosphate rock mines of 11 companies,
and 40 plants of 24 companies producing sulphuric acid, superphosphate, and nixed fertilizer. One of the
principal requirements of the inquiry was to obtain information concerning costs, prices, and profits for 103
separate formulas of popular-selling fertilizers during 1941 and 1942.
Food—Biscuits and Crackers (O. P. A.), Wartime, 1942-43.—As requested by the Office of Price
Administration, the Commission investigated costs and profits in the biscuit and cracker manufacturing
industry and submitted its report to that agency 3/25/43. The survey of 43 plants operated by 25 companies
showed, among other things, that costs were lower and profits higher for the larger companies than for the
smaller ones.
Food—Bread Baking (O. E. S.), Wartime, 1942-43.—This investigation was requested (10/23/42) by
the Director of the Office of Economic Stabilization and was conducted to determine what economies could
be made in the bread-baking industry so as to remove the need for a subsidy for wheat, to prevent an increase
in bread prices, or to lower the price of bread to consumers. Essential information on more than 600
representative bakeries' practices, costs, prices, and profits was developed and reported to O. E. S.
(12/29/42). The report also was furnished to the Secretary of Agriculture and special data gathered In the
inquiry were tabulated for O. P. A.
Food—Bread Baking (O. P. A.), Wartime, 1941-42.—In the interest of the low-income consumer, for
whom it was deemed necessary the price of bread should be held at a minimum, the Commission
investigated costs, prices, and profits of 60 representative bread-baking companies, conveying its findings
to O. P. A. (Jan. 1942) in an unpublished report.
Food—Flour Milling (O. E. S.), Wartime, 1942-43.—Requested by the Director of the Office of
Economic Stabilization, this inquiry covered practices, costs, prices, and profits in the wheat flour-milling
industry, its purpose being to provide the Director with facts to determine what economies could be effected
in the
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industry so as to eliminate the need tor a wheat subsidy, without reducing farmers' returns, or to reduce bread
prices The report was made to O. E. S. and a more detailed report was prepared for O. P. A.
Fruit Growers and Shippers (W. P. B.), Wartime, 1943-44.—This investigation was requested by the War
Production Board to determine whether 7 grape growers and 12 grape shipper, all located in California, were
in violation of W. P. B. Order L-232 with respect to quotas affecting the use of lugs (wooden shipping
containers).
Furnaces, Hot Air, Household (W. P. B.), Wartime, 1943-44—The Commission made a Nation-wide
survey tor the War Production Board of the operations of one of the largest manufacturers in the United
States of household hot air furnaces, to determine whether its practices in selling and servicing domestic
heating plants were in violation of Orders L-79 and P-84, and other applicable regulations and orders of W.
P. B.
Fuse Manufacturers (W. P. B.), Wartime, 1942-43.—For the War Production Board the Commission
investigated and reported on the activities of representative fuse manufacturers whose operations were
subject to W. P. B. Limitation Orders L-158 and L-161, as amended.
Glycerin, Users of (W. P. B.), Wartime, 1942-43.—At the request of the War Production Board, paint
and resin manufacturers, tobacco companies, and other large users of glycerin were investigated to determine
whether they had improperly extended preference ratings to obtain formaldehyde, paraformaldehyde, or
hexamethylenetetramine, to which they were not otherwise entitled.
Household Furniture (O. P. A.), Wartime, 1941-42.—Costs, prices, and profits of 87 representative
furniture companies were studied to determine whether, and to what extent, price increases were justified.
study was also made to determine whether price-fixing agreements existed and whether wholesale price
Increases resulted from understandings In restraint of trade. Confidential reports were transmitted to O. P.
A. in Sept. 1941.
Insignia Manufacturers (W. P. B.), Wartime, 1944-45.—Preliminary studies made by the War Production
Board disclosed the probability that certain insignia manufacturers had acquired larger quantities of foreign
silver than necessary to fill legitimate orders and diverted the balance to unauthorized uses. In response to
W. P. B.'s request the Commission surveyed the acquisition and use of foreign silver by such manufacturers
to determine the degree of their compliance with Order M-199 and checked the receipt and use of: both
domestic and treasury silver, as well as the manufacture of insignia, as controlled by Orders L-131 and M-9c.
Jewel Bearings, Consumers of (W. P. B.), Wartime, 1942-43.—or the War Production Board, users of
Jewel bearings were investigated to determine the extent to which they were complying with W. P. B.
Conservation Order M-50, which had been Issued to conserve the supply and direct the distribution of jewel
bearings and jewel-bearing material.
Metal-Working Machines, Invoicing and Distribution of (W. P. B.), Wartime, 1942-43.—For the War
Production Board an inquiry was made to obtain complete data from the builders of: metal-working machines
(including those manufactured by their subcontractors) such as all nonportable power-driven machines that
shape metal by progressively removing chips or by grinding, boning, or lopping; all nonportable powerdriven shears, presses, hammers, bending machines, and other machines for cutting, trimming,, bending,
forging, pressing, and forming metal; and all power-driven measuring and testing machines. Each type and
kind of machine was reported on separately.
Nickel Processors (W. P. B.), Wartime, 1942-43.—The Commission was designated by the War
Production Board to investigate the transactions of some 600
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nickel processors for the purpose of determining the extent to which they were complying with W. P. B.
Preference Order No. M-6-a, issued 9/30/41, and Conservation Order M-6-b, issued 1/20/42. The
investigation was conducted concurrently with a survey of chromium processors.
Optical Decree (Attorney General).—The Commission investigated (inquiry referred to F. T. C. 8/12/52)
the manner in which an antitrust consent decree entered (Sept. 1948) against the American Optical Company
and others, restraining them from discriminatory and monopolistic practices, was being observed, and report
(2/10/54) to the Attorney General.
Paint, Varnish, and Lacquer Manufacturers (W. P. B.), Wartime, 1943-44.— The purpose of this survey
was to determine whether the manufacturers covered were in violation of War Production Board Orders M139, M-150, M-159, M-246, and M-327 In their acquisition and use of certain chemicals, all subject to W.
P. B. allocations, used in the manufacture of paint, varnish, and lacquer. Sales of such products to determine
their end uses also were investigated.
Paperboard (O. P. A.), Wartime, 1941-42.—Costs, profits, and other financial data regarding operations
of 68 paperboard mills (O. P. A. request, 11/12/41) for use in connection with price stabilization work, were
transmitted to O. P. A. in a confidential report (May 1942).
Paper—Newsprint (Attorney General).—The Commission investigated ( inquiry referred to F. T. C.
1/24/38) the manner in which certain newsprint manufacturers complied with a consent decree entered
against them (11/26/17) by the U. S. District Court, Southern District of New York.
Petroleum Decree (Attorney General).—The Commission investigated (inquiry referred to F. T. C.
4/16/36) the manner in which a consent decree entered (9/15/30) against Standard Oil Co. of California, Inc.,
and others, restraining them from monopolistic practices, was being, observed, and reported (4/2/37) to the
Attorney General.
Priorities (W. P. B.), Wartime, 19415.—Pursuant to Executive orders (January 1)40), W. P. B.
designated the Federal Trade Commission as an agency to conduct investigations of basic industries to
determine the extent and degree to which they were complying with W. P. B. orders relative to the allocation
of supply and priority of delivery of war materials F. T. C. priorities investigations are listed herein under
the headings: Aluminum, Foundries Using; Antifreeze Solutions, Manufacturers of; Capital Equipment,
Chromium, Processors of; Commercial Cooking and Food and Plate Warming Equipment, Manufacturers
of; Contractors, Prime, Forward Buying Practices of; Copper Base Alloy Ingot Makers; Copper, Primary
Fabricators of; Costume Jewelry, Manufactures of; Electric Lamps, manufacturers of; Fruit Growers and
Shippers; Furnaces, Hot Air, Household; Fuse Manufacturers; Glycerin, Users of; Insignia manufacturers;
Jewel Bearings, Consumers of; Metal-working Machines, Invoicing and Distribution of; Nickel, Processors
of; Paint, Varnish, and Lacquer, Manufacturers of; Quinine, Manufacturers and Wholesalers of; Silverware,
Manufacturers of; Silverware Manufacturers and ,Silver Suppliers ; Steel Industry ; Textile Mills, Cotton;
and Tin, Consumers of. The report on each of these investigations was made directly to W. P. B.
Quinine, Manufacturers and Wholesalers of (W. P. B.), Wartime, 1942-43.— At the instance of the War
Production Board, investigation was made to determine whether requirements of its Conservation Order No.
M-131-a, relating to quinine and other drugs extracted from cinchona bark, were being complied with.
Silverware Manufacturers (W. P. B.), Wartime, 1942 43.—Silverware manufacturers were investigated
at the request of the War Production Board to determine the extent to which they had complied with the
copper orders, that is,
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W. P. B. General Preference Order No. M-9-a, Supplemental Order No. M-9-b, and Conservation Order m-9c, as amended.
Silverware Manufacturers and Silver Suppliers (W. P. B.), Wartime, 1942-43.—The activities of
silverware manufacturers and silver suppliers under W. P. B. Conservation and Limitation Orders m-9-a, b,
and c, m-100 and L-140 were investigated and reported on at the request of the War Production Board.
Sisal Hemp (Senate).—The Commission assisted the Senate Committee on Agriculture and Forestry in
an inquiry (S. Res. 170, 64th, 4/17/16) and advised how certain quantities of hemp promised by the Mexican
sisal trust, might be fairly distributed among American distributors of binder twine (Mexican Sisal Hemp,
S. Doc. 440, 64th, 8 p., o. p., 5/9/16). The Commission's distribution plan was adopted.
Steel Costs and Profits (O. P. A.), Wartime, 19423.—A report on the Commission's survey of costs,
prices and profits In the steel industry, begun in April 1942 at the request of O. P. A., was made to that
agency. The inquiry covered 29 important steel-producing companies.
Steel Industry (O. P. M.), Wartime, 19412.—This investigation covered practically every steel mill in
the country and was conducted for the purpose of determining the manner in which the priorities and orders
promulgated by the Office of Production Management were being observed. i. e., the technique used in the
steel industry ln meeting the requirements of O. P. M. (later the War Production Board) orders and forms
controlling the distribution of pig iron, iron and steel, iron and steel alloys, and iron and steel scrap.
Textile Mills, Cotton (W. P. B.), Wartime, 1943 44.—For the War Production Board the Commission
conducted a compliance investigation of manufacturers of cotton yarns, cordage, and twine to ascertain
whether they were in violation of Priorities Regulation 1, as amended, by their failure to fill higher rated
orders at the time they filled lower rated orders.
Tin Consumers (W. P. B.), Wartime, 1942-43.—The principal consumers of tin were investigated at the
instance of the War Production Board to determine the degree of their compliance with Conservation Order
m-43-a, as amended, and other orders and regulations issued by the Director of the Division of Industry
Operation, controlling the inventories, distribution, and use of the tin supply in the U. S.
War Materials Contracts (House), Wartime, 1941-42.—At the request of the House Committee on Naval
Affairs, the Commission assigned economic and legal examiners to assist in the Committee's inquiry into
progress of the national defense program (H. Res. 162, 77th, 4/2/41). The Commission's examiners were
active in field investigations covering aircraft manufacturers' cost records and operation, naval air station
construction, materials purchased for use on Government contracts, and industry expansion financing
programs.
Wartime Inquiries, 1941-45.—To aid in the 1941-45 war program, F. T. C. was called upon by other
Government departments, particularly the war agencies, to use its investigative, legal, accounting, statistical
and other services in conducting investigations. It made cost, price, and profit studies; compiled industrial
corporation financial data; investigated compliance by basic industries with W. P. B. priority orders; and
studied methods and costs of distributing important commodities. The 1941-45 wartime investigations are
herein listed under the headings: Advertising as a Factor in Distribution; Cigarette Shortage; Distribution
Methods and Costs; Fertilizer and Related Products; Food—Biscuits and Crackers; Food—Bread Baking;
Food—Fish; Food—Flour Milling; Household Furniture; Industrial Financial Reports; Metal-Working
Machines; Paperboard; Priorities; Steel Costs and Profits; and War Material Contracts.
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U. S. GOVERNMENT PRINTING OFFICE, 1956