Full text of Annual Report of the Federal Trade Commission : Annual Report of the Federal Trade Commission : For the Fiscal Year Ended June 30, 1961

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Annual
Report
of the

FEDERAL
TRADE
COMMISSION
For the Fiscal Year Ended
June 30, 1961

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C., 20402 - Price 40 cents (paper cover)

Federal Trade Commission
PAUL RAND DIXON, Chairman
ROBERT T. SECREST
SIGURD ANDERSON
WILLIAM C. KERN
PHILIP ELMAN
JOSEPH W. SHEA, Secretary
JOHN N. WHEELOCK, Executive Director
JAMES McI. HENDERSON, General Counsel
EARL J. KOLB, Director of Hearing Examiners
JOSEPH E. SHEEHY, Director
Bureau of Litigation
SHERMAN R. HILL, Director
Bureau of Investigation
VACANT, Director
Bureau of Consultation
VACANT, Director
Bureau of Economics
ii

EXECUTIVE OFFICES OF THE FEDERAL TRADE COMMISSION
Pennsylvania Avenue at Sixth Street Northwest,
Washington 25, D.C.
Branch Offices
Room 3004, U. S. Courthouse, Foley
Square, New York 7, N. Y.

Room 413, Masonic Temple Building, New
Orleans 12, La.

Room 1310, 226 West Jackson
Boulevard, Chicago 6, Ill.

Room 811, U.S. Courthouse, Seattle 6, Wash.

Room 306, Pacific Building, San
Francisco 3, Calif.
Room 405, 215 West Seventh Street,
Los Angeles 14, Calif.

Room 1128, Standard Building, Cleveland 13,
Ohio.
Room 2806, Federal Office Building, Kansas
City, Mo.
Room 915, Forsyth Building, Atlanta 3, Ga.

Room 1001, 131 State Street, Boston
9, Mass.

988 North Monroe Street, Arlington 1, Va.

Field Offices for Textiles and Furs in Addition to the
above Branch Offices
Room 1003—c, U.S. Court and Custom
House, St. Louis 1, Mo.

Room 405, 215 W. Seventh St., Los
Angeles 14, Calif.

Room 1304, 1114 Commerce Street,
Dallas 2, Tex.

Room 3030A, U.S. Courthouse,
Philadelphia, Pa.

958 North Monroe Street Arlington 1, Va.
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-seventh Annual Report of the Federal Trade
Commission, covering its accomplishments during the fiscal year ended June 30, 1961.
By direction of the Commission.
PAUL RAND DIXON,
Chairman.
THE PRESIDENT OF THE SENATE.
THE SPEAKER OF THE HOUSE OF REPRESENTATIVES
v.

CONTENTS
Chapter

Page

1.
2.
3.
4.

The Year's Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Scope of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Merger Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Scientific Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Radio and Television Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Textiles and Furs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Case Work in 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Antimonopoly Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Deceptive Practice Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6. Hearing Examiners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7. Office of the General Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Division of Special Legal Assistants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Appellate Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Division of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Office of Export Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8. Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Trade Practice Conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Stipulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Small Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Guide Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9. Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Economic Evidence and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10. Appropriations and Financial Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11. Appendixes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
FTC Commissioners (1915-61) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Statutes Pertaining to the FTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
General Investigations by the Commission Since 1915 . . . . . . . . . . . . . . . . . . . . . . 115
vii

Chapter One

THE YEAR'S HIGHLIGHTS

From the standpoint of numbers of enforcement actions, the fiscal year 1961 was one of
the best years in the Commission's 47-year history. It also produced important innovations
in the employment of enforcement tools and in the use of voluntary procedures to gain
compliance with the laws the Commission administers.
On the other hand, delay in the prosecution of cases continued to be so serious a problem
that major changes in organization and procedures had to be devised and readied for
introduction in fiscal 1962. While the additional appropriations received in fiscal 1961 had
been put to good use 3 it became all too apparent that the Commission's machinery needed
to be redesigned to speed the prosecution of cases-to shorten the time between the initial
investigation of a law violation and the issuance of an order stopping it. The changes
required would have to be fundamental-not just a shoring up of weak spots-if the problem
of delay were to be met head-on. Such changes were planned and made ready.
As a result, fiscal 1961 was a year of transition for the Commission. During the planning
of the new approach to the casework delay problem, former procedures continued. The same
was true of most staff operations. Enough cases-indeed, more than enough-were in the
pipeline to keep the staff fully occupied while personnel changes and the new procedures
were being worked out in essential detail. With scores of cases well along in their
prosecution, commonsense dictated that so much time and money already had been invested
in them that it would be poor economy not to continue their handling and trial as originally
conceived. However, if the investigation of a case had not progressed too far and it appeared
that more law enforcement could be achieved by broadening the illegal target-to bring a
prevalent practice under fire instead of just an individual offender—then action was held up
until it could be prosecuted faster under the new rules of practice to become effective in
fiscal 1962.
Even with the inevitable slowdown that temporarily attends any major reorganization, the
Commission's performance during fiscal 1961 compared favorably with previous years;
indeed, except for fiscal 1960, the numbers of actions in all major categories exceeded those
for any other year in the Commission's 47-year history. And, in the important category of
cease-and-desist orders against monopo1

listic practices, an alltime record number of 103 was issued. While total complaints dropped
from 502 to 410 as compared to the previous year, the total number of orders rose from 346 to
368. It must be emphasized, however, that mere numbers of actions are only one indication of
Commission effectiveness and by no means the most significant criteria. Far more important
than numbers is that illegal business practices be weeded out rather thin merely trimmed back.
That the Commission was able to handle the volume of casework it did during the year is
attributable in large part to a strengthening of the staff. This was made possible by an increase
in appropriations from $6,840,000 to $8,009,500, which resulted in enlarging the staff from 782
to 855. While it is true that the hiring of new employees does not return an immediate, result in
increased casework due to training requirements, the numerically strengthened staff put the
Commission in a better position to carry out its responsibilities.
Even so, the backlog of pending cases continued to rise. In the antimonopoly field, the
number increased from 931 to 1,484 during the fiscal year, and deceptive practice investigations
pending continued to represent a 14-month backlog (1,030 cases), even though the Commission
staff was able to complete 38 percent more such investigations than during the previous year.
Both from the standpoint of investigation and trial, corporate mergers that illegally restrain
competition are the Commission's most difficult cases. During fiscal 1961, 53 full investigations
were undertaken and 32 such cases were being tried. Five new complaints were issued and two
cases were brought to conclusion with orders of divestiture. The Pillsbury Co., the Nation's
second largest flourmilling concern, was ordered to sell two major competitors it had acquired,
and Scott Paper Co., the Nation's leading seller of sanitary paper products, was ordered to sell
three corporations it had acquired in violation of the Celler-Kefauver amendment to the Clayton
Act.
The new complaints challenged acquisitions by the Hooker Chemical Corp., Ekco Products
Co., Leslie Salt Co., American-Marietta Co., and Kaiser Industries Corp.
The greatest number of antitrust actions-100 complaints and 91 orders-involved alleged
violations of the Robinson-Patman Act, prohibiting illegal discriminations in prices and services.
Such cases accounted for five-sixths of all of the antimonopoly proceedings begun during the
year. Of these, more than half were directed against the payment of unlawful brokerage to
buyers for their own account. Here a concerted attack was made against the practice as it was
found to exist in the citrus fruit industry, principally in the marketing of the Florida crop. For
the first time the commission made wide-scale use of its powers under section 6 of the FTC Act.
Heretofore but rarely invoked and then only on a limited basis, this
2

power to demand answers to mailed inquiries made possible the investigation of an
industrywide evil in record time. Indeed, the efficacy of this section 6 power as
demonstrated by the citrus fruit investigation led to its further broad-scale use in
investigations of possible discriminatory advertising allowances in the department store and
food industries.
In addition to these broad investigations, the Commission brought many other actions to
halt preferential treatment of some customers to the detriment of others in the furnishing of
allowances and service. For example, orders were issued against a group of manufacturers
for giving preferential allowances to grocery chains in the sale of food and household
products. Similar orders were entered against manufacturers of such diverse products as steel
pipe and fittings, hosiery, printing supplies, and mattresses. At the same time, new
complaints were issued challenging the granting of discriminatory allowances in the sale of
toys, books and magazines, vacuum sweepers, Sunglasses, plumbing specialties, grocery
products, and automobile replacement glass.
Also attacked were price discriminations in violation of section 2 (a) of the Robinson-Patman
Act. Orders were issued against such major corporations as Pacific Gamble Robinson Co.,
Borg-Warner Corp., American Ball Bearing Corp., Perfect Equipment Corp., Gojer, Inc.,
Cutter Laboratories, Inc., Hat Corp. of America, and Byer-Rolnick Hat Corp.
The knowing inducement of price discriminations likewise resulted in the Commission
taking action. The automotive parts field accounted for several proceedings, and orders were
issued against more than 100 jobbers who had set up 3 buying companies as mere
bookkeeping devices" to obtain unlawful lower prices in the form of volume discounts based
on the aggregate purchases of all members. A similar complaint was issued against National
Parts Warehouse and its 56 jobber members.
The illegal inducement of promotional allowances also was attacked, and a significant
order prohibiting such was issued against Grand Union Co. of East Paterson, N.J., a 340store supermarket chain.
Also attacked were exclusive dealing and restrictive agreements violative of section 3 of
the Clayton Act. Mytinger Casselberry, Inc., Long Beach, Calif., the Nation's largest seller
of vitamin and food supplements, was ordered to stop making or enforcing such agreements
with distributors of its "Nutrilite Food Supplement." And the Timken Roller Bearing Co.,
Canton, Ohio, the country's biggest maker and seller of tapered roller bearings, was made to
stop requiring its distributors and jobbers not to handle competitive products in the
replacement market.
3

Deceptive practice cases in fiscal 1961 continued the pattern of previous years in
providing the greatest number of Commission actions. Totals of 292 complaints and 272
orders were issued, with policing of the fur, wool, and textile fiber products industries
accounting for 10 percent of the complaints and nearly 35 percent of the orders.
The Commission's performance came close to keeping paw with its mounting workload.
A total of 90,1 deceptive practice investigations was completed, compared to 655 the
previous year; however, at the end of fiscal 1961, the backlog of pending investigations
remained virtually the same as it was the previous year-still 14 months behind-despite the
increased speed made possible by a larger staff.
Although generally not so complex as antitrust cases, deceptive practice cases present the
Commission with a responsibility whose importance should not be underestimated.
Economic cheating, principally false advertising, is pernicious in that it penalizes reputable
businessmen and tends to force them, in self-protection, to retaliate in kind. Thus, the
ultimate victim, the public, finds itself the target of a grim competition. The result is a
deterioration of public confidence in advertising, or, more broadly, a loss of faith in
representations made for the merits of products and services. Such skepticism tends to
spread, to engender distrust of the honest as well as the dishonest, to dilute the confidence
which buyers must have in sellers. It is this confidence that lubricates our economic
machinery. So, while some deceptive practice cases may not seem of any great importance,
their insidious and cumulative effect is of vital concern to the Nation and hence to the
Commission.
A principal area of corrective action involved misleading advertising of food, drugs, and
therapeutic devices. For example, the Commission brought complaints against three
concerns which manufacture or pack drugs they wholesale to retail druggists and other
distributors. At issue was whether advertised claims of proper quality control were true. By
the end of the fiscal year, one of the three had agreed to a consent order prohibiting false and
misleading claims. The, other cases were still pending. It seems likely that this hitherto
unexplored area of "quality control" advertising will receive further investigation. Another
group of claims challenged involved questionable advertising of vitamin pills as cures for
tiredness. The complaints averred that in the vast majority of cases the cause of fatigue could
not be helped by the vitamins or minerals contained in the pills. Still other complaints were
issued against the makers of widely advertised analgesics for exaggerated claims on how
much faster their pills could relieve pain than competing products, such as aspirin. The
complaints contended there is no significant difference among them as to their pain-relieving
speed.
4

Home and household products continued to tempt their advertisers to stretch the truth
about performance, price, or comparative merit. Products involved were many and diverse,
and included such goods as refrigerators, house paint, sewing machines, vacuum sweepers,
lawnmowers, kitchen utensils, rubber gloves, furnace repairs, and carpets. Frequently,
misrepresentation of the offering price as a "bargain" accompanied other questionable claims.
It was in this field that the Commission challenged misleading demonstrations on
television. An order was issued against Aluminum Co. of America and Wear-Ever
Aluminum, Inc., prohibiting them from using a misleading demonstration purporting to show
that food wrapped in their brand of Aluminum foil was provided superior protection. Orders
also were, issued to stop deceptive television demonstrations used in advertising Colgate
dental cream, Schick safety razors, and Mennen "Sof’ Stroke" shaving cream.
Other challenged selling tricks involving home furnishings and improvements included
the use of scare tactics in the sale of furnaces ("the old furnace is a fire hazard") and vacuum
sweepers (to clean “germ-infested” rugs) ; the use of false "limited-time-only" claims for
price reductions in the sale of encyclopedias; and misrepresentations of the foreign or
domestic origin of cutlery, clocks, clothing, and other items whose value is affected by where
they are made.
As the fiscal year neared its close, ,tn industrywide investigation of the advertising of
products offered for the relief of hemorrhoids was begun. Letters asking for substantiation
of advertising claims were sent to 100 makers of these products.
One of the most important areas of the Commission's antideceptive practice work
concerns the proper labeling of furs, woolens, and textile products. Indeed, the extent of this
responsibility is such that plans were drawn during the fiscal year for the creation of a
separate bureau to handle the policing of the three labeling acts covering these products.
Meanwhile, during the fiscal year, the Division of Textiles and Furs was doubled in size
in order to increase its industry counseling and compliance inspection work. Special
emphasis was given to inspections under the Fur Act in an effort to counter the widespread
practice of passing off dyed and bleached furs as "natural." The result was that inspections
more than doubled in number, and 92 complaints were recommended as contrasted to but 44
in fiscal 1960.
Another major activity of the Division was the commencement of active enforcement of
the new Textile Fiber Products Identification Act of 1958. This followed a 16-month period
of educating the textile industry to the act's requirements. This much time was deemed
appropriate in the light of experience gained from early enforcement of the Wool and Fur
Acts, and results appeared to justify the delay.
5

There has been far more compliance with the Textile Act than during the early periods under
the Wool and Fur Acts, although in many areas more consumer education and industry
counseling are needed. Nevertheless, enforcement work got underway with a sampling of
over 30 million textile products to guard against labeling, invoicing, and advertising
deficiencies.
Altogether, enforcement of the Wool, Fur, Textile, and Flammable Fabrics Acts resulted
in 94 cease-and-desist orders, or more than a third of the Commission's deceptive practice
orders for the fiscal year.
In defending those of its orders appealed by respondents to the Courts, the Commission
achieved a high proportion of victories. The Supreme Court denied 10 petitions for certiorari
to review courts of appeals decisions in favor of the Commission, denied a petition filed on
the Commission's behalf to review an unfavorable decision, and granted 2 petitions, one of
which was filed on behalf of the Commission. In courts of appeals, 9 of the 12 cases
pending at the beginning of the year reached decision before its close, with the Commission
orders being affirmed in 4 of the cases, modified in 2, and reversed in 2, while 1 case was
dismissed for lack of prosecution by the petitioner. Of the five new cases that arose during
the year and reached decision, the Commission's orders to cease and desist were affirmed in
three, while two other petitions for review of Commission orders were dismissed pursuant
to stipulations by the parties.
Law enforcement does not, of course, end with issuance of cease-and-desist orders, for
there remains the responsibility to obtain and maintain compliance with them. This proved
a strenuous task for the Commission's Division of Compliance during fiscal 1961. A total
of 33 civil penalty suits was certified to the Attorney General during the year—an alltime
record number. Judgments totaled $38,000 for the four cases concluded. At the close of the
year, 27 cases were still pending.
The Division also instituted 170 compliance investigations during the year, 40 of which
were in connection with antimonopoly matters.
In addition to checking on compliance with current orders, two major investigations were
being conducted to determine whether older orders were being obeyed. One was a survey
to determine if 70 manufacturers of steel products were complying with a Commission order,
issued in 1950, prohibiting them from making identical bids on steel products in connection
with sealed bids from public agencies. The other investigation involved the Commission's
order, issued in 1943, against an industrywide price-fixing conspiracy by cement
manufacturers.
In the field of economics, the Commission continued work on its study of concentration
and integration in the retailing of food. This,
6

of course, was in addition to studies and analyses of economic and statistical matters required
for the prosecution of its casework.
In connection with the food study, questionnaires were mailed to companies canning and
freezing fruit, juices, and vegetables. Information thus obtained prompted an interim staff
report showing, among other things, that although the industry had a large number of small
concerns, sales were highly concentrated among the large operators. About 80 percent of the
freezers sold less than $2.5 million annually, while the remaining 20 percent accounted for
nearly 85 percent of total industry sales. The study also revealed that the largest retail food
chains generally purchased directly from the large freezers and that nearly 60 percent of the
merchandise so purchased was under the chain’s own label, the remainder being packer
branded.
A principal highlight of fiscal 1961 was the Commission’s program to invite voluntary
compliance with the trade practice laws through industry conferences and through the
issuance of guides. In addition, the Commission approved 146 stipulation agreements
whereby person gave written assurance, on the public record, that they would discontinue
business practices the Commission considered unlawful.
New trade practice rules were promulgated for the fluorocarbons industry, and rules were
updated for the hosiery industry and the poultry hatchling and breeding industry. At the same
time, trade practice conferences looking to the issuance of rules were held for the following
industries: residential aluminum siding, pleasure boat, Florida fresh citrus fruit, stationers,
household furniture, and fresh fruit and vegetables.
Twelve new applications for trade practice proceedings were received, bringing to 30 the
number of trade practice proceedings in various stages of processing.
In addition to promulgating new rules, and revising others, the Division of Trade Practice
Conferences was active in administering the 162 sets of rules outstanding. During the year
a close liaison was maintained with industry members and their trade associations for the
purpose of interpreting the rules and effecting voluntary discontinuance of their violation.
This resulted in satisfactory disposition of 513 rule compliance matters.
One of the most effective efforts to gain vounltary compliance with the statutes
administered by the Commission was the Industry Guide Program. Here was a pinpointing
of illegal practices, whether exclusive to a particular industry or common to many, if not all,
industries. As the name implies, “Guides” delineate what the Commission believes to be
illegal in a business practice for the guidance of those engaged in it as well as for the public
which might be duped by it.
Since the Guides Program got underway in 1955, the Commission has issued Guides on
(1) cigarette advertising, (2) tire advertising, (3) deceptive pricing, (4) bait advertising, (5)
deceptive advertising
7

of guarantees, and 6) advertising allowances. Each spells out in layman's language the
requirements of the law as applied to the particular practice.
In policing these Guides, attempts are made first to assure voluntary discontinuance of
violations, and then, should voluntary compliance efforts fail or should stronger measures
be deemed necessary, the violation is made the subject of formal action. Nevertheless, many
violations were successfully handled without recourse to formal procedures, and during fiscal
1961, 845 individual cases were so handled. In addition, 335 individual interpretations of
matters covered by the Guides were made in response to inquiries. Well over 100,000 copies
of the Guides were distributed.
Augmenting the informational impact of the Guides themselves, citywide meetings to
discuss their application, as well as other aspects of Commission law enforcement,'were held
in Cincinnati, Memphis, Hartford, Tampa, Boston, Mobile, Birmingham, Seattle, Portland,
and Evansville, Ind.
These are the highlights of the Commission's work during fiscal 1961. Much was
accomplished, but the Commission's processing of cases could not keep pace with realistic,
requirements. As the year ended, the Commission's machinery was being redesigned for
faster and more efficient performance.
8

Chapter Two

SCOPE OF AUTHORITY
Basic Functions of the FTC

The Federal Trade Commission is composed of five Commissioners appointed by the
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 complaint.& 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 proceeding 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 to 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.
625514-62-2

9

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 had 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.
The second broad category of functions conferred upon the Commission under the
Federal Trade Commission Act consists of the
___________________
2
3

10

Amendment contained in the Oleomargarine Act (64 Stat. 20).
Sec. 15, Federal Trade Commission Act.

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 reports. 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.
Amendment to Packers and Stockyards Act of 1921—Public Law 85-909
This act of September 2, 1958, confers upon the Commission jurisdiction over the
activities of meatpackers insofar as nonmeat food products are concerned. Prior to the
amendment, the law had been interpreted as precluding the Commission from exercising any
authority whatsoever over meatpackers regardless of the commodity involved.
The act also gave the Commission jurisdiction over all transactions in commerce in
margarine or oleomargarine and over retail sales of
11

meat, meat food products, livestock products in unmanufactured form, and poultry products.
It further provided, in substance, that the Commission could exercise jurisdiction over the
wholesale operations of meatpackers if effective exercise of its power or jurisdiction with
respect to retail sales of meat and meat food products would be impaired, and if, after
notifying the Secretary of Agriculture, it was determined that the latter -was not conducting
an investigation or proceeding involving the same subject matter.
A corresponding provision was made for the Secretary of Agriculture to exercise
jurisdiction over the retail sales of meat and meat food products if his authority over
wholesale operations would otherwise be impaired and if the Commission was not
investigating or proceeding with respect to the same matter.
Shortly after the enactment of this statute, several conferences were held beween officials
of the two agencies to discuss the liaison arrangements which should be established under
the act in order to coordinate their activities in the most efficient manner. Liaison officers
were thereafter appointed for each agency and an effective system was derived for the
mutual exchange of information on matters with respect to which both agencies may process
concurrent jurisdiction.
As of the end of fiscal year 1959, there had been no instance in which it was necessary
for either agency to invoke the provisions of, or to follow the procedures outlined in the
sections of the statute referred to above. Close liaison was maintained, however, with regard
to jurisdictional problems in connection with incoming complaints of a borderline character.
One concrete development resulting from the realignment of jurisdiction over
meatpackers was the dismissal of a complaint which had been filed by the Secretary of
Agriculture against Swift & Co. on charges of engaging in unfair or discriminatory practices
in the sale of ice cream. The complaint in this case was dismissed without prejudice on June
1, 1959, and the matter was referred to the Commission for such further action as might be
deemed appropriate.
The Clayton Act 4
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 clue 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

12

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

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 make only due allowance for differences
in cost of manufacture, sale, or delivery resulting from the difference 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 offering 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.
Tying or Exclusive Dealing Contracts.-Section 3 of the Clayton Act prohibits the lease
or sale in the course of commerce of goods,
_______________________
5

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

13

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 7 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 for such exemption, an association must file with the Commission copies of its
association papers or articles of incorporation and a
______________
6
64 Stat. 1125.
7
40 Stat. 516.
14

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.
The Wool Products Labeling Act, the Fur Products Labeling Act, and the Textile Fiber
Products Identification Act8
These three Federal statutes constitute "truth-in-fabrics" and "truth-in-furs" legislation.
Under their terms the disclosure of content and other important factual information is
required on labels and in advertising of textile and fur products.
Violations of these acts are classed as unfair methods of competition and unfair or
deceptive acts and practices under the Federal Trade Commission Act. Mandatory labeling
of textile, wool, and fur products is required. Labels on wool and textile products are
required to disclose by percentages the constituent fibers contained therein. Labels on fur
products as well as the advertising and invoicing of such products are required to disclose
to prospective purchasers the true name of the animal from which the fur was taken. For this
purpose an official Fur Products Name Guide has been issued by the Commission. The
disclosure of other important information is required in order to inform the purchaser when
the fur product is dyed, bleached, damaged, secondhand, or made of scraps or pieces. Under
the Textile Act and the Fur Act, the country of origin or place of manufacture must be
disclosed with regard to imported merchandise.
Under each act the Commission is specifically authorized to make inspections and tests
of merchandise, subject to the requirements of the acts and regulations. It is also directed and
authorized to issue rules and regulations which have, the force and effect of law. Under the
Textile Act these regulations include the establishment of generic names for manufactured
fibers for use in disclosing fiber content information.
__________________
8

15 U.S.C. § 68, 12 U.S.C. § 69, and 15 U.S.C. § 70, respectively.

15

Under the Wool and Fur Acts, when necessary in the public interest, the Commission may
institute seizure or condemnation proceedings for misbranded merchandise. Under all three
acts it may apply to the Federal courts for temporary injunction pending the completion of
a Commission proceeding under which a cease-and-desist order is sought. Suits to collect
civil penalties for violation of Commission final orders under these acts are also available.
Willful violations are punishable also by misdemeanor proceedings brought by the United
States in the Federal district courts.
Manufacturers and distributors of products subject to these acts may issue guaranties for
the protection of their customers who rely in good faith upon representations made in
connection with such guaranties.
Registered identification numbers are issued by the Commission to manufacturers and
distributors for use on labels in lieu of their required name.
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. In 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
_____________
9

16

67 Stat. 111.

misdemeanors. Upon conviction, fines up to $5,000 or 1 year’s imprisonment, or both, may
be imposed by the court.
Regulation of Insurance-Public Law 15, 79th Congress 10
This act was passed by Congress after the Supreme Court had ruled that the insurance
business is subject to Federal jurisdiction under the commerce clause of the Constitution.11
Under this statute, the Federal Trade Commission and the Clayton Acts 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 may 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.

13

64 Stat. 798.

14

67 Stat. 232.

448.

17

Chapter Three

ADMINISTRATION

The Executive Director, as the Commission's chief staff official, manages the Federal
Trade Commission's activities to achieve effective and economical operation. He has
responsibility for the administration of all the Commission's bureaus and field offices. The
Office of the Executive Director also includes the Office, of Administration and the Division
of Public Information.
OFFICE OF ADMINISTRATION
The Office of Administration gives policy guidance and general supervision to the
management and organization programs, administrative services activities, and personnel
programs of the Federal Trade Commission. The Office plans for effective organization and
administration of the Commission's management programs; formulates and puts into effect
basic administrative policies; and develops long-range plans relating to needs for personnel,
space, supplies, equipment, etc. The Office of Administration includes the Division of
Personnel, the Division of Management and Organization, and the Division of
Administrative Services.
Division of Personnel
The Division of Personnel initiates, develops, and administers personnel policies and
programs in the spheres of recruitment, appointment and placement, training, position
classification, performance evaluation, employee relations, and health and welfare.
Division of Management and Organization
The Division of Management and Organization conducts management surveys and
recommends and installs organization changes, management reports, procedures, and
establishes staffing patterns that enable the Commission to operate more efficiently and
effectively.
This Division also prepares analyses of the Commission operations for the use of the
Commission.
18

Division of Administrative Services
The Division of Administrative Services is a central administrative unit established for
the purpose for publishing material made public under section 6(f) of the Federal Trade
Commission Act, for the procurement of supplies and equipment, and for supplying other
services essential to the functioning of the Federal Trade Commission. The Commission's
Library is also located in this Division.
Publication Branch
This Branch of the Division of Administrative Services clears for format, economy of
reproduction, and distribution, all material printed or duplicated by the Federal Trade
Commission within the limitations of the laws and regulations as applicable thereto. This
Branch also operates a class. A printing plant established under the provisions of the
regulations by the Joint Committee on Printing of the U.S. Congress, and provides
photographic, Photostat, and drafting services. These services are performed by the
following sections:
The Stenographic and Composition Section edits, for format and typography, material to
be printed at the Government Printing Office or printed or duplicated in the Federal Trade
Commission Printing Plant, and provides stenographic services when bureau pools are
overburdened.
The Photographic Section provides the Commission with photographic, Copy Flo, and
Photostat services for use in connection with the Commission's legal proceedings and
economic reports. Functions of the printing plant are the printing of the Commission's
orders, press releases, legal and economic reports, speeches, trade practice rules, pamphlets,
forms, letters, etc.
Library
The Library consists of specialized collection of more than 100,000 bound volumes and
extensive vertical files containing approximately 40,00 legislative documents and statistical
publications organized for easy accessibility. In addition, there are several thousand current
issues of legal, economic, and technical periodicals which collect annually from the inflow
of more than 200 titles on a daily, weekly, monthly, or other frequency basis. These, too,
become volumes at the end of each year when single numbers of selected titles are collected
and bound.
Procurement and Services Branch
This Branch of the Division of Administrative Services is responsible for providing
services and controls in the necessary housekeeping functions as follows: procurement and
maintenance of supplies, equipment, furniture, etc.; space control and building maintenance;
communications including mail, telephone and telegraph, and messenger.
19

OFFICE OF PUBLIC INFORMATION
This Division issued a total of 1,593 press releases during fiscal year 1961, compared
with 1,265 in fiscal 1960. They covered news of Commission complaints, answers by
respondents, initial decisions, orders, compliance actions, warnings to alert the public on how
to identify illegal seeing schemes and business practices, and other newsworthy actions by
the Commission. In addition, many oral and written inquiries from the press and public were answered each day.
OFFICE OF THE COMPTROLLER
The Office of the Comptroller includes the Division of Budget and Finance and the
Division of Financial Statistics, thus placing all budget, fiscal, machine tabulation, and
financial statistics in one office.
Division of Budget and Finance
The Division of Budget and Finance is responsible for the preparation and administration
of the Commission's budget and maintains the fiscal records of the Commission. This office
maintains salary, savings bonds, tax, social security, retirement, and annual and sick leave
records for all employees of the Commission, including the field offices. This Division
performs the audit, prior to payment, of ,III vouchers covering payment for travel expense,
communications, and supplies and equipment. The Fiscal Section maintains the various
ledgers and records necessary to reflect the financial position of the Commission at all times
and prepares the various financial statements and reports required by the Commission, the
Bureau of the Budget, the Treasury Department, the General Accounting Office, and the
Congress.
Division of Financial Statistics
The Division of Financial Statistics has been responsible since 1917 for summarizing, for
each calendar quarter, uniform, confidential financial statements collected from -.t
probability sample of all enterprises classified as manufacturers, except newspapers, which
are required to file U.S. Corporation Income Tax Form 1120. The quarterly summaries,
entitled Quarterly Financial Report for Manufacturing Corporations, are published by the
Government Printing Office and sold by the Superintendent of Documents.
The purpose of this sample survey is to produce, each calendar quarter, an income
statement and balance sheet for all manufacturing corporations, classified by both industry
and asset size. (Corporations account for more than 95 percent of total receipts from all
manufacturing activity in the United States; manufacturing corporations account for more
than half of all corporate profits.)
20

In the published summaries, profits per dollar of sales and rates of profit on stockholders'
equity are shown each quarter for each of 60 industry and size groups of manufacturing
corporations. Also shown each quarter are 45 income statement and balance sheet items, and
as many financial and operating ratios, for each of 45 industry and size groups of corporate
manufacturers.
The quarterly summaries are used by various agencies in the executive and legislative
branches of the Federal Government to analyze current business conditions, evaluate the
current financial position of small business, estimate net income in national income statistics,
estimate current tax liability and future tax receipts, and determine current monetary and
credit policy.
The quarterly summaries are also used by thousands of non-Government subscribers.
Executives, for example, use the quarterly summaries to measure efficiency and appraise
costs by comparing a company's operating results with the average performance of
companies of similar size or in the same line of business, to determine whether to undertake
new ventures by comparing the profitability of various types of business activity, and as a
guide to the relative movement of sales and profits in order to reduce controversies in wage
negotiations.
OFFICE OF THE SECRETARY
The Secretary has authority as delegated to close cases in informal matters -without
referring them to the Commission. He gives final overall staff review, from the standpoint
of law and policy, to letters prepared for the signature of the Chairman or the Secretary. He
attends all executive sessions of the Commission and participates in the consideration by the
Commission of recommendations of top officials in all phases of the agency's activities. The
Secretary is the Congressional Liaison Officer and, in addition, coordinates and is
responsible for overall liaison activities of the Commission with various other Government
agencies. He signs official documents and letters reflecting Commission action, and serves
as legal custodian of the seal and records of the Commission. Also, he supervises, through
the Assistant Secretary for Minutes, the assignment of matters to the Commission, the taking
of the minutes, the transmittal of Commission directions to the staff, the setting of oral
arguments, the editing and publishing of Commission decisions and digests, and the
preparation of material for publication in the Federal Register and Code of Federal
Regulations; and serves as Deputy Employment Policy Officer of the Commission.
The Office of the Secretary includes the following offices:
21

Legal and Public Records
The Office of the Assistant Secretary for Legal and Public Records embraces the Legal
Research and Reporting Section, Formal Docket Section, Public Reference Section, and the
Distribution Section.
Legal Research and Reporting Section
This Section is responsible for the preparation and publication of the volumes of the
Federal Trade Commission Decisions and its Statutes and Court Decisions, the latter
including court decisions in Commission cases; for the codification and editorial preparation
of various Commission material published in the Federal Register; and for the collection and
dissemination of relevant court decisions.
Formal Docket Section
The Formal Docket Section is responsible for the establishment, management, safety,
completeness and accuracy, and uses and retirement of the legal and related records of the
Commission.
Public Reference Section
The Public Reference Section furnishes information and assistance to the public and to
the staff of the Commission in relation to public, legal, and court proceedings and rules of
procedure. The Section is responsible for the custody, location, safety, condition, etc., of
dockets files, exhibits, and other items.
Distribution Section
The Distribution Section controls the supply and distribution of all publications issued
by the Commission, such as economic and annual reports, trade practice rules, and Statutes
and Court Decisions.
22

FEDERAL TRADE COMMISSION

ORGANIZATIONAL CHART - SEE IMAGE

Prepared by Division of Management and Organization

ADMINISTRATION ONLY

23

Chapter Four

INVESTIGATION

The Bureau of Investigation conducts and investigates possible violations of the statutes
administered by the Commission. Most of these investigations are made by attorney
examiners stationed in 10 field offices. They work under the general supervision of the
Bureau Director, the Chief Project Attorney and his staff.
Investigations fall generally in several categories, i.e., restraints of trade and monopoly
matters and unfair and deceptive acts and practices, all of which are considered unfair
methods of competition. The restraints of trade involve such matters as price fixing,
collusive bidding, resale price maintenance, selling below cost with the intent and probable
effect of eliminating competition or destroying a competitor (see. 5 of the Federal Trade
Commission Act), discriminatory pricing practices and the inducing thereof (see. 2 of the
Robinson-Patman Act), exclusive dealing and tying arrangements which may result in
lessening competition or a tendency to monopoly (sec. 3 of the Clayton Act), corporate
mergers or acquisitions where the effect may be substantially to lessen competition in any
line of commerce in any section of the country or to tend to create a monopoly (sec. 7 of the
Clayton Act), and interlocking directorates (sec. 8 of the Clayton Act).
The unfair and deceptive acts and practices include such matters as false and misleading
advertising of food, drugs, medical devices, and cosmetics (sec. 12 of the Federal Trade
Commission Act); fictitious pricing of merchandise; misuse of the term "guarantee''; false
and misleading representations and claims for other products (sec. 5 of the Federal Trade
Commission Act); and the false labeling of furs, wearing apparel, and fabrics (Wool Products
Labeling Act of 1939, the Fur Products Labeling Act of 1951, the Flammable Fabrics Act
of 1953, and the Textile Fiber Products Identification Act of 1958).
Investigations are initiated by the Commission, principally in special industry situations
or upon applications for complaints received from members of the consuming public,
businessmen, or other parties who feel aggrieved by unfair methods of competition and
unfair and deceptive acts and practices. Applications for complaint are received daily in the
form of letters from parties setting forth the various unfair methods of competition which
they feel jeopardize the
24

free competitive economic system. Altogether, the Bureau scheduled 2,024 matters for
investigation during the fiscal year, of which 884 involved restraints of trade and 1,140
involved unfair and deceptive acts and practices. Applications for complaint received from
the public totaled 4,886, of which 624 resulted in investigations being initiated. Not all
applications for investigation result in investigations because of a lack of jurisdiction by the
Commission over the matters presented or because the subject outlined failed to indicate a
probable violation of the statutes.
The Bureau completed 1,414 investigations during the year, of which 331 were restraint
of trade ,ind monopoly matters and 1,083 were deceptive practice matters, as compared with
1,190 completed investigations during fiscal 1960, of which 271 involved restraint of trade
and monopoly matters and 819 deceptive practices. The Commission issued 410 complaints
on the basis of the investigations in fiscal 1961, and stipulations to cease and desist were
accepted in 146 additional matters. The Commission closed 892 investigations. Most of
those were closed because the investigations disclosed no basis for corrective action.
However, 216 were closed upon receipt of assurances of discontinuance of the questioned
practices, and 67 were closed because the practice had been abandoned before the
investigations got underway and it did not appear that the practice would be resumed.
The special report procedure under section 6 of the Federal Trade Commission Act was
utilized by the Commission in connection with possible illegal discriminatory advertising
allowances given to and received by department stores and resident buyers. Orders were
issued to 216 department stores and 18 resident buyers requiring the submission under oath
of special reports concerning advertising allowances received by them.
The Commission also continued to use the section 6 special report procedure in
investigations of possible discriminatory promotional allowances in the food industry.
Orders were issued to 111 food suppliers to submit under oath information with respect to
promotional allowances given to favored and nonfavored grocery customers. Special reports
received from suppliers in answer to orders issued in the previous fiscal year have been under
extensive review and study for corrective action where indicated.
The Bureau of Investigation has received numerous complaints of gasoline price wars,
and investigations were undertaken in appropriate cases. Unfair and discriminatory practices
allegedly used by suppliers in connection with the sale and distribution of bread, dairy
products, and auto parts were also the subject of investigations conducted by the Bureau in
the fiscal year.
625514——62—3
25

An investigation was completed during the fiscal year of the shoe industry to determine
whether manufacturers and distributors were engaging in false advertising and misbranding
in regard to the composition of their products. Involved were questions as to whether plastic
or paper products were being used as substitutes for leather or rubber, and as to whether the
products were being affirmatively misrepresented or were deceptive in appearance.
Investigations of false advertising and misbranding of watches during the fiscal year
resulted in the issuance of a number of complaint against the manufacturers and distributors.
Investigations of exaggerated gas mileage claims by domestic manufacturers of automobiles
and some importers have brought about corrective action through stipulation or other
administrative treatment. An industrywide investigation of the rebuilt TV picture tube has
culminated in revisions of labels and advertisements of such tubes to disclose the presence
of used parts.
During this fiscal year the Commission began investigating the advertising of
manufacturers of drug products who are claiming to maintain “quality control," thus
representing that they follow all methods, procedures, and operations necessary to insure the
safety and efficacy of their products. Complaints were issued in instances where these claims
were found to be unjustified. The Commission also issued complaints against advertising
claiming safety for products whose labels bore warnings in the labeling.
Investigations in a series of cases involving the advertising of vitamin products resulted
in the issuance of several complaints by the Commission looking to a requirement that such
advertising, when referring to physiological conditions or symptoms, limit claims for benefit
to those instances due to a deficiency of the vitamins supplied, and also to require the
affirmative disclosure that in the great majority, of persons suffering from such conditions
and symptoms, the cause is not an insufficiency of the vitamins.
MERGER INVESTIGATIONS
Section 7 of the Clayton Act, although originally enacted in 1914, took its present form
by act of December 29, 1950. The statute, as it now stands, prohibits corporate mergers and
acquisitions that may substantially lessen competition or tend to monopoly in any market.
The authority of the Commission to enforce section 7 of the amended Clayton Act is derived
from section 11 of the act.
The Bureau of Investigation is charged with the responsibility of examining all corporate
mergers and acquisitions by corporations subject to the jurisdiction of the Commission and
conducting investigations to determine their probable competitive effects.
26

Mergers and acquisitions are a principal means of corporate growth, and have attracted
the close interest, in recent years, of not only the Government but also business. There is no
requirement in the existing law that parties to a corporate merger or acquisition must notify
the Commission either before or after consummation. With the exception of requests for
premerger clearance or receipt of complaints, the Commission must rely on financial
newspapers, trade journals, manuals of investments, and the like for information that a
merger has occurred or is contemplated. Each merger or acquisition coming to the attention
of the Commission is recorded on an information sheet containing such basic financial and
operational information concerning the combining corporations as is readily available from
recognized reference manuals. In fiscal 1961, 1,032 information sheets were prepared.
Mergers and acquisitions so reported are referred to project attorneys. The project attorneys
examine the preliminary information, consult with staff economists, secure data, analyze and
evaluate the available information and data.
A comprehensive investigation is initiated where there is a probability of a substantial
lessening of competition or a tendency to monopoly "in any line of commerce" (product
market) "in any section of the country" (geographic market). Since the statute deals with the
probable effects, and since there, is no formula for the relevant information and data, no
single fact is sufficiently controlling to answer Section 7 investigative questions. Economic
data relating to the competitive characteristics of the companies, the industry and the markets
involved, are required to determine the competitive impact of the acquisition or merger.
Such facts, for example, as concentration increases, market dominance, market shares,
integration trends, market entry, are necessary to the ultimate determination of future effect
on competition. Such facts, and the guides of recent section 7 case law, attest to the
economic character of the section 7 investigations.
In fiscal 1961, 53 new merger investigations were initiated. In addition, 100 acquisitions
by corporations under investigation for earlier acquisitions were considered.
Investigations to determine the probable competitive effects of mergers and acquisitions
are more time consuming, expensive, and complex than most other investigations conducted
by the Commission. The investigations generally are undertaken immediately after the
mergers and acquisitions are consummated and, if possible, before assets and operations of
the combining corporations are so intermingled as to make an order of divestiture ineffective.
The Commission's rules provide for a premerger clearance procedure. Interested parties
may request advice of the Commission concerning a proposed merger or acquisition. Facts
relating to the proposed transaction may be submitted in writing or in writing or in
conference.
27

On the basis of such facts, and other information available to the Commission, the parties are
informed whether or not consummation of the merger would likely result in further action
by the Commission. Numerous conferences between members of the Bureau's staff and
parties contemplating a merger were held during the fiscal year.
DIVISION OF SCIENTIFIC OPINIONS
This Division furnishes the Commission's legal staff with scientific facts and opinions
concerning the composition and efficacy of foods, drugs, medical devices, cosmetics, and
related commodities where questions of science arise in regard to advertising claims. It
arranges for analyses or other tests of products under investigation and gathers information
on their composition, nature, effectiveness, and safety. The Division provides scientific
opinions and information needed in (1) considering matters under investigation, (2)
negotiating stipulations, and (3) preparing complaints. It also assists the Commission's legal
staff in preparing for hearings involving questions of science and secures the services of
expert scientific witnesses.
Fiscal year ended June 30, 1961
Number of written opinions rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
Number of oral opinions rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418
Number of analyses and tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Number of hearings attended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Number of stipulation conferences attended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Number of expert witnesses secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The written opinions rendered involved the following:
Foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
Cosmetics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Economic poisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
On July 1, 1960, there were 64 requests for scientific and medical opinions awaiting study
and report in the Division, and on June 30, 1961, the number pending was 70. On June 30,
1961, there were outstanding 32 formal complaints involving matters in which the Division
was expected to furnish advice to Commission attorneys and to obtain expert scientific and
medical witnesses.
The opinions rendered dealt with foods and beverages, cold remedies, analgesics, skin
preparations, hair and nail preparations, dentifrices, trusses, shoes and wearing apparel for
which health claims were made, medical books advertised to the public, insecticides,
disinfectants, bleaching and cleansing products, and many other preparations and devices.
Continued attention was given to preparations
28

offered for the treatment of arthritis and rheumatism, to reducing devices, and the advertising
used to promote the sale of contact lenses. Special attention was given to the advertising of
antibiotics and other drugs used in treating dairy animals, which advertising should include
a warning of how long the animal’s milk must be withheld from human consumption after
the drug is administered. Attention was also given to the claims of adequate quality control
appearing in the advertising used by certain manufacturers of generic-named drugs.
Many of the matters referred to the Division for scientific opinion are complex and
difficult to resolve. Much of the advertising under investigation involves drugs, cosmetics,
and devices regarding whose virtues and limitations the published medical and scientific
literature provides, at most, only fragmentary and inconclusive information. Consequently,
the Divisions must locate and confer with the medical specialists and other scientists who
have firsthand knowledge of the therapeutic and other properties of the drugs, cosmetics, and
devices. Authorities in a particular field when contacted may characterize the available
scientific information as preliminary and inconclusive, but having had no actual experience
with the product in question they are unable to state categorically that the advertising claims
are false. In such cases the only hope of accurate appraisal and, where necessary, effective
regulation of the advertising, is to have the products tested clinically. It is becoming
increasingly necessary to have such tests made in order to appraise accurately the advertising
for specific products.
DIVISION OF ACCOUNTING
This Division furnishes accounting services in connection with the investigation and trial
of legal cases and in general economic investigations.
The Division prepares accounting analyses and studies of the pricing policies of
respondents or proposed respondents in connection with the Commission's law enforcement
work in regard to: (1) alleged price discrimination under section 2 of the Clayton Act, as
amended by the Robinson-Patman Act; (2) cost data submitted by respondents in justification
of alleged price discrimination under the Robinson-Patman Act; (3) alleged price fixing in
cases arising under section 5 of the Federal Trade Commission Act; and (4) alleged sales
below cost in violation of section 5 of the Federal Trade Commission Act.
It also compiles production and sales statistics, and analyzes financial data of companies
involved in mergers under section 7 of the Clayton Act. It also compiles statistics concerning
the financial position and operating results of companies under section 6 of the Federal Trade
Commission Act.
29

During the year, accounting services were furnished in connection with 93 legal cases and
investigations. These included 61 Robinson-Patman cases, 14 other Clayton Act cases, and
18 section 5 Federal Trade Commission Act cases.
During the year a study was made of the profitableness of identical companies in each of
24 selected manufacturing industries for the years 1940, 1947-59, and also for the 12 largest
companies in each of 39 industries for the years 1958 and 1959. A report on this study was
submitted to and approved by the Commission and ordered published.
RADIO AND TELEVISION ADVERTISING UNIT
The principal function of this Unit is to monitor radio and television commercials and
various types of printed material. In reviewing radio and television scripts, all networks
submit commercials disseminated during 1 week each month and each individual television
station submits scripts covering a 24-hour period each 3 months. For individual radio
stations a breakdown has been computed based on the amount of coverage. For stations with
powerful transmissions or smaller stations in largely populated areas, continuities are
requested for a 24-hour period each 3 months, or four times a year. Smaller stations or fairly
large stations operating in sparsely populated areas are requested to submit scripts for a 24hour period every 6 months. Small stations, usually individually owned and operated, are
covered by submitting copy once a year.
Twenty-five newspapers, distributed geographically, representing metropolitan and rural
areas, and 10 magazines are obtained each week. In addition to broadcasting networks,
individual stations submitted continuities as follows:
Radio Stations:
Group I (4 times yearly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463
Group II (2 times yearly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 783
Group III (1 time yearly) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,372
Total stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,618
Television stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580
There were reviewed in radio and television advertising the following number of
advertisements, and in the case of newspapers and magazines the number of pages:
Radio-television, 465,324; magazine-newspaper, 169,294.
The Unit operates as a service organization within the Commission on behalf of various
bureaus and divisions. On request, some 46,000 individual ads have been furnished.
The Radio and Television Advertising Unit conducts spot-check monitoring of
commercials disseminated in the Washington and Baltimore areas over both radio and
television. This includes visual
30

monitoring of television commercials. Upon request the Unit has made sound kinescope
recordings of various television ads which have been of substantial assistance to several
bureaus within the Commission.
DIVISION OF TEXTILES AND FURS
This Division enforces four separate pieces of consumer legislation-the Wool Products
Labeling Act of 1939, the Fur Products Labeling Act of 1951, the Flammable Fabrics Act
of 1953, and the Textile Fiber Products Identification Act of 1958.
The Wool, Textile, and Fur Acts require content disclosure on labels, as well as other
important factual information. In addition, the Fur Act requires truthful invoicing, and it and
the Textile Act require important and truthful disclosure in advertising products subject to
their terms. The Flammable Fabrics Act protects consumers by prohibiting the marketing of
dangerously flammable wearing apparel and fabrics.
To assist consumers and businessmen, the rules and regulations under the Fur Act contain
a Fur Products Name Guide, which sets out the true English name of the animal producing
the fur. In addition, the regulations under the Textile Act contain a list of 16 generic names
for manmade fibers, which serve as common denominators for the hundreds of synthetic
fibers now being sold. The Division also maintains a public register of continuing guarantees
filed with the Commission under the four acts. These guarantees protect intermediate sellers
of wool, fur, and textile products when relied upon in good faith. The Division also issues
registered identification numbers to companies whose customers do not wish to reveal their
sources of supply to competitors.
In administering these laws, the Division plans and supervises nationwide industry
counseling and compliance inspection programs. Through industry counseling, the Division
seeks to obtain voluntary compliance with the law. Full-time textile and fur investigators
conducting compliance inspections point out violations to responsible parties, and, where
possible, effect on-the-spot corrections of minor deficiencies. When voluntary compliance
cannot be obtained, the Division initiates formal corrective action against responsible parties.
Willful violators are subject to criminal prosecution.
During fiscal 1961, the Division's investigative staff was doubled to increase its industry
counseling and compliance inspection work.
Special emphasis was given to inspections under the Fur Act because of the increased
number of violations due to the passing off of dyed and bleached furs as "natural." The
number of fur inspections more than doubled those of the previous year. Recom31

mendations for complaint-charging violations with the Fur Act and Regulations rose from
44 in fiscal 1960 to 92 in fiscal 1961.
The Division during the year began active enforcement of the new Textile Act, with a
sampling of over 30 million textile products for labeling, invoicing, and advertising
deficiencies.
The act has now been in effect for 16 months, and, generally speaking, public acceptance
and industry compliance has been good. Using the other consumer acts as criteria, there has
been far more compliance with the Textile Act than during early periods under the Wool and
Fur Acts. There remain, however, many areas where consumer education and industry
counseling are needed.
In fiscal 1961, a general revision of the regulations under the Fur Act was made. The
revised rules encompassed needed clarifications and covered areas necessary for the proper
enforcement of the statute.
Division of Textiles and Furs workload statistics, Fiscal 1961
Wool

Commercial establishments covered by industry
compliance investigations . . . . . . . . . . . . . .

........
Products examined (sampling method in all cases
except fur) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertisements examined . . . . . . . . . . . . . . . . . . .
Formal complaints recommended . . . . . . . . . . . . .
Stipulations recommended . . . . . . . . . . . . . . . . . . .
Compliance investigations of concerns under
cease and desist order or stipulation . . . . . . . . . .
Matters disposed of by acceptance of assurance
of discontinuance . . . . . . . . . . . . . . . . . . . . . . . . .
Interpretations and opinions rendered . . . . . . . . . .
Registered numbers assigned . . . . . . . . . . . . . . . . .
Continuing guarantees accepted and filed . . . . . . .
Laboratory tests performed . . . . . . . . . . . . . . . . . .
Correspondence (incoming)
Correspondence (outgoing) . . . . . . . . . . . . . . . . .

32

Fur

Flammable
fabrics

Textile

Sec. 5
FTC

975

934

1,883

1,242

2,410,285
3,557
21

106,468
25,647
92

31,116,149
.........
14

30,909,148
71,679
13
1

.....
.....
8
.....

4

10

. . . . . . . . ..

24

65

........ .

. . . . . . . . ..

.....

556
8,074
295

3,060
167

. . . . . . . .. .
1,798
....... ..

....... ..
21,370
1,822

.....
.....
.....

803
277
........
........

500
516
12,198
18,381

2,211
177

868
106
. . . .. . . . . .
. .. . . . . . . .

.....
5
.....
.....

.....

Chapter Five

LITIGATION

The preparation and trial of cases before the Commission, from the drafting of complaints
to the briefing and argument of completed cases before the Commission, are the
responsibilities of the Bureau of Litigation with its staff of approximately 65 trial attorneys.
There have long been more cases to try than could be expeditiously handled by the number
of trial attorneys in the Bureau. The volume and effectiveness of the work of the Bureau is,
accordingly, determined primarily by the size and competency of its professional staff.
The trial attorneys study the information and recommendations in individual cases
submitted by the Bureau of Investigation, research the applicable law, and, where warranted,
present to the Commission drafts of complaints with recommendation for their issuance.
When the Commission adopts and issues a complaint, in the form submitted or in modified
form, a formal proceeding is initiated which must be carried through all stages of trial to its
final presentation on the merits to the Commission, ordinarily by the attorney or attorneys
who drafted the complaint.
The cases litigated by this Bureau deal with the great variety of unfair and anticompetitive
practices falling within the broad spectrum of the Commission's jurisdiction, and are
designed to correct such practices and to protect freedom of competitive opportunity in the
affected industries. The practices covered include false advertising and misbranding of all
sorts of products, and such monopolistic and anticompetitive practices as price-fixing
conspiracies, boycotts, exclusive dealing and other restrictive arrangements, price and other
discriminations, and corporate mergers.
The trial of a complaint issued by the Commission is handled by Bureau attorneys before
a hearing examiner, under rules of evidence which closely parallel the rules prevailing in
Federal district courts. When it is received in this Bureau, the information which provides
the basis for the allegations of the complaint is essentially raw material. It is the job of the
trial attorney to convert the relevant and reliable parts of this raw material into evidence, and
to build before the hearing examiner the factual and legal record on which the case will
ultimately stand or fall. After an initial decision is made by the hearing examiner, it is also
the job of the trial attorney to appeal to the Commission
33

relief required by the public interest, and to defend before the Commission those parts of the
decision which may be appealed by the respondent. In such appeals it is the record which
the trial attorney has presented to the hearing examiner on which the Commission must base
its findings of fact, conclusions of law, and appropriate order.
The number of trial attorneys employed by the Bureau has been maintained at the
maximum levels permitted by budgetary considerations. In maintaining these levels there
has been considerable success in efforts to obtain the best qualified attorneys available,
particularly young men with outstanding academic records. The heavy caseload of the
Bureau has made it necessary, and the qualifications of the men who have been added to the
staff in recent years have made it possible, quickly to develop competent trial lawyers able
to cope effectively with the work of the Bureau. Their very competence, however, has
resulted in the diversion of many of the attorneys, as they developed experience, to more
lucrative fields outside of Government or in their transfer to positions of greater
responsibility in the Commission or elsewhere in Government service. The development and
maintenance of a staff of experienced and qualified trial attorneys is, therefore, a continuing
challenge of major consequence to the Bureau.
CASEWORK IN FISCAL 1961
The orders to cease and desist issued in fiscal 1961 exceeded the number issued in 1960,
but there was some decline in the number of complaints issued in 1961 compared to the
record number issued in 1960. The fluctuations shown in these 2 years reflect variations in
the comparative complexity of the cases instituted and tried, and variations which normally
occur from year to year in the number of experienced trial attorneys available to handle them.
The following table, which compares fiscal 1961 with the three prior fiscal years, discloses
that the number of complaints and orders issued against illegal business practices continued
at a, high level during 1961 and considerably exceeded the levels attained in the fiscal years
1958 and 1959:
Statistical summary and comparison fiscal years 1958-61
Antimonopoly cases
1958

.........
Orders to cease and desist
Complaints issued

86
45

1959

79
64

1960

157
57

Deceptive practice cases
1961

120
103

1958

268
228

1959

271
267

1960

346
289

1961

290
265

Total
1958

354
273

1959

350
331

1960

503
346

1961

410
368

NOTE.—The figures showing the division of the workload between antimonopoly and deceptive
Practices Involve a limited number of allocations which could have been made either way. For
example, deceptive practice charges were included in a few complaints and orders which were
classified as antimonopoly, and vice versa. It also be noted that orders partially disposing of cases
are not Included in these figures.
34

ANTIMONOPOLY CASES
As shown above, 120 complaints and 103 orders to cease and desist were issued against
monopolistic practices. The following references indicate their scope and variety.
Merger Cases
Cases under section 7 of the Clayton Act involve corporate mergers and acquisitions
which may substantially lessen competition or tend toward monopoly. On June 30, 1961, 30
merger cases were pending in various stages of trial and these cases represented a substantial
part of the caseload of the Bureau during fiscal 1961. Five now complaints were issued
during the year, one complaint was dismissed without prejudice, and two cases were brought
to a conclusion with orders of divestiture.
The two orders issued during the year were in cases which were vigorously contested
throughout, both before the hearing examiners and by appeals to the Commission. In one of
the cases the Commission modified the examiner's order to make it more effective, and in the
other case the Commission's order represented a reversal of the hearing examiner's dismissal
of the charges.
The Pillsbury Co., the Nation's second largest flour-milling company, was ordered by the
Commission to sell two major competitors it acquired-Ballard & Ballard Co., Louisville, Ky.,
and Duff's Baking Mix Division of American Home Foods, Inc., located at Hamilton, Ohio.
The Commission adopted the initial decision of the hearing examiner after making changes
in the scope and form of the order.
Scott Paper Co., the Nation's leading seller of sanitary paper products, was ordered to sell
three paper industry concerns it had acquired in violation of section 7 of the Clayton Act:
Soundview Pulp Co., Everett, Wash.; Detroit Sulphite Pulp& Paper Co., Detroit, Mich.; and
Hollingsworth & Whitney Co., Boston, Mass. The three companies had been acquired for
stock valued in the aggregate at more than $100 million. The Commission's decision vacated
and set aside the hearing examiner's initial decision dismissing the charges.
The following is a brief summary of the cases in which merger complaints were issued
during the year:
Hooker Chemical Corp., Niagara Falls, N.Y., for acquiring Durez Plastics & Chemicals,
Inc., North Tonawanda, N.Y., and certain assets of Monsanto Chemical Co., St. Louis, Mo.
Ekco Products Co., Chicago, Ill., for acquiring McClintock Manufacturing Co. and
certain assets of Blackman Stamping & Manufacturing Co., both of Los Angeles, Calif.
Leslie Salt Co., San Francisco, Calif., for acquiring The Deseret Salt Co., Salt Lake City,
Utah, and California Salt Co., Los Angeles, Calif.
35

American-Marietta Co., Chicago, Ill., for almost 50 acquisitions from coast to coast.
(Concrete pipe, cement, construction aggregates, lime.)
Kaiser Industries Corp. and three of its subsidiaries and affiliates, Oakland, Calif., for
acquiring 45 percent of the voting stock of Allison Steel Manufacturing Co., Phoenix, Ariz.
The Commission determined that the public interest would be better served by this new
complaint and, accordingly, dismissed without prejudice ,in earlier complaint against Kaiser
Steel Corp.
Robinson-Patman Antidiscrimination Act Cases
Violations of this act lead the numerical list of antimonopoly proceedings. Complaints issued
during fiscal 1961 under this law represented approximately five-sixths of all of the
antimonopoly proceedings instituted during the year; and the orders to cease and desist from
Robinson-Patman violations represented an even larger proportion of all of the antimonopoly
orders issued during the year. The great majority of all proceedings involving the RobinsonPatman Act were disposed of by consent orders.
The largest group of Robinson-Patman Act proceedings involved brokerage cases
charging violations of section 2(c), and represented well over half of all Robinson-Patman
proceedings. Only three of the brokerage cases were contested, the others being disposed of
by consent orders. In the three contested cases: Venus Foods, Los Angeles, Calif., was
ordered to stop making illegal payments to purchasers of its bakery products; Thomasville
Chair Co., Thomasville, N.C., was ordered to stop passing on illegal brokerage to favored
retail customers; and Haines City Citrus Growers Association, Haines City, Fla., a
cooperative of approximately 140 citrus grove owners, was ordered to stop paying unlawful
brokerage to buyers for their own account.
A substantial number of Robinson-Patman Act proceedings involved prohibitions against
discrimination in the granting of advertising and promotional allowances or services which
violated sections 2(d) and 2(e). These subsections require that sellers paying customers for
services and facilities, or furnishing services and facilities, must make them available to all
competing customers on proportionally equal terms.
Preferential treatment of grocery chains was the subject of several 2(d) proceedings
during fiscal 1961. In addition to a variety of food products, commodities involved included
household paper products, waxes and polishes, and glass containers and closures.
Among the companies cited in 2 (d) orders were Penick & Ford, Ltd., The Chun King
Corp., Marcal Paper Mills, Inc., S. C. Johnson
36

& Son Inc., Kerr Glass Manufacturing Corp., and Ball Bros. Co., Inc.
Other 2(d) orders were entered against manufacturers of such diverse products as pipe
and fittings, hosiery, printing and photoengraving supplies, mattresses, and brassieres.
New proceedings instituted under section 2(d) centered on toy manufacturers who
allegedly gave discriminatory promotional allowances to some wholesalers. Companion
cases also were brought charging the favored wholesalers with violating section 5 of the
Federal Trade Commission Act in knowingly inducing the discriminations.
Additional 2 (d) complaints charged the granting of discriminatory allowances in the sale
of books and magazines, floor polishers, vacuum cleaners, sunglasses, grocery products,
candy, plumbing specialties, and automobile replacement glass.
Companies cited in such complaints included Golden Press, Inc.; Grosset & Dunlap, Inc.;
Holt, Rinehart & Winston, Inc.; The Regina Corp.; D. L. Clark Co.; Pittsburgh Plate Glass
Co.; and Quaker Oats Co.
The remainder of the Robinson-Patman Act proceedings were under sections 2(a) and 2(f)
of the act. Under section 2(a) it is unlawful to discriminate in prices between customers
under certain circumstances where the effect may be substantially to lessen competition or
tend to create a monopoly; and under section 2(f) it is unlawful knowingly to induce and
receive such a discrimination. The standards of proof required under these subsections are
somewhat more stringent than under the other subsections of the act because of the
conditions and provisos of section 2(a) and the defenses provided by section 2 (b).
Orders prohibiting price discrimination were entered against manufacturers and other
sellers of food and grocery products, sporting goods, automotive parts and supplies, dairy
products, soap, pharmaceuticals and hats.
Companies cited in 2(a) orders included Pacific Gamble Robinson Co., Borg-Warner
Corp., American Ball Bearing Corp., Perfect Equipment Corp., Gojer, Inc., Cutter
Laboratories, Inc., Hat Corp. of America, and Byer-Rolnick Hat Corp.
New proceedings instituted under section 2 (a) likewise covered a variety of commodity
fields, including automobile tires and tubes, food and dairy products, gasoline, automotive
lamps, and drapery hardware.
The following were among the companies cited for 2 (a) violations: Inland Rubber Corp.,
Westinghouse Electric Corp., Quaker Oats Co., American Bakeries Co., American Oil Co.,
and Graber Manufacturing Co., Inc.
37

The automotive parts field accounted for several proceedings involving knowing
inducement of price discriminations violative of section 2 (f ) of the Clayton Act. Orders
were issued against Southern California, Jobbers, Inc., Southwestern Warehouse Distributors,
Inc., and Automotive Southwest, Inc., together with more than 100 jobber members of these
buying groups. The complaints in these cases alleged that the jobbers had set up buying
companies as "mere bookkeeping devices" to obtain unlawful lower prices in the form of
volume discounts based on the aggregate purchases of all members.
A similar complaint was entered against National Parts Warehouse and its 56 jobber
members.
Sears, Roebuck & Co. was charged with violating section 2(f) in purchasing plumbing
and bathroom fixtures from Universal-Rundle Corp. The latter corporation was charged with
violating section 2(a) in granting discriminatory prices to Sears, which owns 63 percent of
Universal-Rundle's capital stock.
Another 2(f) proceeding involved March of Toys, Inc., and its wholesaler members. They
were ordered to stop knowingly inducing or accepting unlawful price discriminations from
suppliers.
Other Restraint of Trade Cases
In addition to the merger and discrimination cases, the antimonopoly -work of this Bureau
included important proceedings against unfair practices in restraint of trade under section 5
of the Federal Trade Commission Act, and exclusive dealing arrangements under section 3
of the Clayton Act. One complaint was also issued against an interlocking directorate under
section 8 of the Clayton Act, but was dismissed without prejudice when the interlocking
directorship was discontinued. In a few instances the same proceedings included charges
under both section 5 and section 3, and in a few cases a section 5 charge was included in
Robinson-Patman complaints.
Significant restraint of trade cases under section 5 in fiscal 1961 included: the
Commission's order requiring the Grand Union Co., East Paterson, N.J., a 340-store
supermarket chain, to stop knowingly inducing disproportional advertising allowances from
its suppliers, in which case section 5 was used to supplement the intent of the RobinsonPatman Act to halt discrimination; and the Commission's orders requiring The Goodyear Tire
& Rubber Co. and The Firestone Tire & Rubber Co. to discontinue unlawful arrangements
under which commissions were paid for promoting certain manufacturers' automotive tires,
batteries, and accessories.
In a proceeding under sections 5 and 3, Mytinger & Casselberry, Inc., Long Beach, Calif.,
the Nation's largest direct seller of vitamin and mineral food supplements, was ordered to
discontinue making,
38

enforcing, and threatening to enforce exclusive dealing and other restrictive agreements with
distributors of its "Nutrilite Food Supplement." In a proceeding under section 3 against The
Timken Roller Bearing Co., Canton, Ohio, the Nation's largest manufacturer and seller of
tapered roller bearings was ordered to stop unlawfully requiring its distributors and jobbers
not to handle competitive products in the replacement market.
DECEPTIVE PRACTICE CASES
Deceptive practice cases in fiscal 1961 constituted, as they have consistently over the
years, the greater number of matters litigated by the Commission. During the year, 292
complaints -were issued and 272 orders to cease and desist were entered.
Details of the actions in some of the more significant cases follow.
Food, Drugs, and Therapeutic Devices
Vigorous action was taken under the provisions of section 12 of the Federal Trade
Commission Act forbidding the false or misleading advertising of foods, drugs, and
therapeutic devices. Among the respondents named in complaints issued during the year
were a wholesale distributor of a large line of food supplements and drugs who claimed to
exercise quality control in his production methods, and vendors of vitamins and drug
products who claimed to grow hair and cure alcoholism and the common cold. Two sellers
of sedatives were charged in separate complaints with law violation in representing as safe
drugs which, the Commission alleged, were dangerous when taken by some individuals.
Two truss manufacturers were cited for claiming that their devices would cure hernias, and
the seller of an electric vibrator for claiming that his device would effectively treat diseases
or abnormalities of the bones, joints, or respiratory or digestive systems of the body.
Of more than ordinary interest to the public were the complaints issued against Lanolin
Plus, Inc., Approved Formulas, Inc., Phoenix Pharmaceutical Co. et al., and Vitalife Vitamins
et al. Included in each of the complaints was the charge that, in offering their vitamin pills
for tiredness, the respondents had misled consumers by failing to reveal the material fact that,
in the great majority of cases of persons suffering tiredness, the condition was not caused by
a deficiency of the vitamins or minerals provided and that in such cases the preparations
would be of no benefit.
In four cases involving analgesics, the Commission issued simultaneous complaints
against American Home Products Corp., Bristol Myers Co., Plough, Inc., and Sterling Drug,
Inc., alleging misrepre39

sentation in making claims for speed of relief by Anacin, Bufferin, St. Joseph Aspirin, and
Bayer Aspirin. The manufacturers of three of the preparations (Anacin, St. Joseph Aspirin,
and Bayer Aspirin) each claimed, according to the complaints, that their product would
relieve pain faster than any other analgesic available and offered for sale to consumers.
Bufferin, the complaint against Bristol-Myers Co. alleged, has been advertised as relieving
pain twice as fast as aspirin.
The truth is, the complaints alleged, there is no significant difference, in the rate of speed
with which these analgesics relieve pain.
Wearing Apparel and Textiles
Over 150 complaints and orders were recorded in cases involving the invoicing, labeling,
and advertising of wearing apparel and its components. Furs continued to lead the parade
of those commodities whose vendors preticket with fictitiously high prices.
Three respondents were in trouble because they were apparently unable to distinguish
between Indian Madras and domestic cotton fabrics although, according to complaints issued
against them, they affirmatively implied in advertising that they did know the difference and
that the domestic cloth was Madras (Sun Fast Textiles, Inc., Ship’n Shore, Inc., and Churchill
Sportswear (Co.). Agreements containing consent orders to cease and desist were accepted
from the first two named.
Two complaints were issued against sellers of fabrics alleged not to meet the minimum
burning time standards prescribed by the Flammable Fabrics Act (Ware Knitters, Inc., et al.,
and California Floral Manufacturing Co.). In an agreement containing a consent order to
cease and desist, the last-named respondent agreed to stop selling, or introducing in
commerce, flammable fabrics used in making leis.
Automobiles and Automotive Supplies
The Commission's activities during the year in this area ranged from proceedings
involving the advertising of whole automobiles to that of accessories and replacement parts.
Rootes Motors, Inc., importer of the English-made Hillman, Singer, Sunbeam, and
Humber automobiles, agreed to the entry of an order forbidding further representations in
advertising that parts and services for these automobiles are immediately available in any
area of the United States when they are not so available.
Montgomery Ward & Co., Inc., was charged with making fictitious pricing and savings
claims for its automobile tires. The complaint alleged that "list prices" shown in newspaper
advertisements were not the company's customary retail prices but were substantially higher.
A consent order approved by the Commission prohibits the company from continuing the
representations.
40

Home and Household Products
Proceedings in this category were concerned with the advertising or labeling of a wide
variety of goods, including house paint, sewing machines, vacuum cleaners, lawnmowers,
kitchen utensils, rubber gloves, furnace repairs, food wrapping, and carpets.
In a proceeding against Aluminum Co. of America, Inc., and a wholly owned subsidiary,
Wear-Ever Aluminum, Inc, the respondents were alleged to have used false and misleading
television commercials in demonstrating "New Super-Strength Alcoa Wrap."
Two hams were depicted, one in a wrinkled and torn wrapper and the other in a neatappearing wrapper identified as "Alcoa Wrap." It was announced that the two hams had been
wrapped and unwrapped the same number of times and that the ham in the ordinary wrapper
would be dry and tasteless, while the “Alcoa” wrapped ham would be juicy and tasty.
The complaint alleged that the two hams had not been wrapped and unwrapped the same
number of times, that the hams had been specially selected, the poorest looking for use in
depicting the “ordinary” wrapper and the best looking to depict “Alcoa Wrap,” and also that
the “ordinary” wrapper had been deliberately torn and wrinkled, while the “Alcoa Wrap” had
not been abused.
The companies and their advertising agents were ordered to cease, using demonstrations
which purport to prove Alcoa Wrap's properties in preserving the quality or appearance of
food, or its strength, durability, or any other characteristic, when such proof is not actually
given.
Orders were issued to stop other allegedly deceptive television demonstrations used in
advertising "Colgate Dental Cream with Gardol" by Colgate-Palmolive Co., “Schick Safety
Razors” by Eversharp, Inc., and “Mennen Sof’ Stroke Shaving Cream” by the Mennen Co.
The use of "scare" tactics and other selling methods alleged to be deceptive was involved
in complaints which issued against two sellers of furnaces, Missouri-Kansas Furnace Co. and
Davis Furnace Co.
In pending proceedings against The Quaker Oats Co., the respondent had been charged
with misrepresenting that the briquets it manufactures from corncobs are "charcoal.)
The Commission alleges that the company has falsely described its briquets as "Chuck
Wagon Charcoal Wheels," "Chuck Wagon Charcoal Briquets,” and “Chuck Wagon Charcoal
Briquets—real Hickory Flavor!”
The complaint contends that the public generally understands and believes that a product
described as "charcoal" is made from wood and that use of the designation to describe
briquets produced pri625514-62—4
41

marily from corncobs is deceptive. Furthermore, it says, the company’s use of the term "real
Hickory Flavor" enhances this deception.
In another pending case, The Scott & Fetzer Co., one of the largest manufacturers of
vacuum cleaners in the industry, faces charges that it had used fictitious pricing, "scare"
tactics, and numerous other unfair practices to promote the sale of its "Kirby" vacuum
cleaners.
One of the allegations is that Scott & Fetzer attempted to "scare" prospects by
emphasizing that the germ-infested condition of their rugs and mattresses renders them
highly dangerous to the prospect's family and that the “Kirby” will correct this condition.
The Company also is charged with misrepresenting in “help wanted” advertisements that
salaried jobs with guaranteed minimum earnings are available for qualified persons with its
distributors and subdistributors.
Books
Printed and oral representations regarding books offered for sale to the public engaged
the attention of the Commission during the year. Holt, Rinehart & Winston, Inc., formerly
Henry Holt & Co., Inc., was alleged in a Commission complaint to have made false,
misleading, and deceptive claims in newspaper advertisements and other printed material for
its book titled "Folk Medicine."
The publisher consented to order forbidding it to misrepresent that the regimen in the
book cures numerous “nagging" ills and chronic ailments or diseases which defy
conventional medical diagnosis and treatment.
Encyclopaedia Britannica, Inc., was ordered, after lengthy litigation, to stop selling its
encyclopedia or other books, services, or merchandise through deceptive pricing, savings,
and limited-time-only claims. The Commission found that, except in one type of cover, the
set of books had sold for the same prices since 1949.
Foreign Origin
Some vendors want their customers to think that domestic products offered for sale are
imported. Other vendors want to conceal the fact that their products were foreign made. It
all depends on the nature of the goods and the place where they did or did not come from.
In English Sportswear, Inc., the Commission has charged the company and two of its
officers with misrepresenting that men’s sport coats it manufactures in this country are made
in and imported form England. This false impression, the complaint alleged, was created by
the labeling and advertising description “English Sports Coat” for the garments, which were
not even English styled
Other cases concerned the alleged deceptive offering of Dutch-made ski suits as Swiss,
hats made in Japan in Philippine hemp as “Genuine Milan,” and an American-made
automotive oil additive developed by
42

U.S. companies as made in Germany using a formula developed by a German scientist, Hong
Kong-made watchbands as American, and Japanese sunglasses as American.
Advertising of Hemorrhoid Remedies
An industrywide investigation, which will continue into fiscal 1962, of the advertising
of products offered for the relief or treatment of hemorrhoids was initiated toward the end
of the year.
Letters were sent to more than 100 makers of hemorrhoid products to determine whether
their advertising may be exaggerating the efficacy of the products. Where the claims appear
to overstate the merits of the product, the makers will be required, under special orders
authorized by section 6 of the Federal Trade Commission Act, to give the Commission staff
more detailed information on the evidence on which the claims are based.
43

Chapter 6

HEARING EXAMINERS

When a formal complaint is issued by the Commission, it is assigned to a hearing
examiner who has the responsibility of taking testimony in support of and in opposition to
the allegations of the complaint. During the year, a staff of 16 examiners served the
Commission.
The Administrative Procedure Act outlines the powers and duties of all hearing examiners
in the Federal service, including the Federal Trade Commission. Their appointment and
tenure are under the sole authority of the Civil Service Commission.
Hearing examiners have complete charge of cases from the time the Commission issues
its complaint until the initial decision if rendered. They hold pretrial conferences; conduct
hearings; rule upon offers of proof, admissibility of evidence, and all procedural and other
interlocutory motions; and make and file an initial decision in each proceeding. In the
performance of their duties as adjudication officers, hearing examiners are exempt from all
direction, supervision, or control except for administrative purposes.
When a hearing examiner has completed the taking of testimony in any case, he allows
the attorneys for both parties to file proposed findings of fact and draft of order. Thereafter
he prepares and files an initial decision which, under the Administrative Procedure Act,
becomes the decision of the Commission if no appeal is made from it by either of the parties,
or if the Commission itself does not enter a stay order or put the case on its own docket for
review. In any event, the decision of the hearing examiner becomes a part of the formal
record and is taken into consideration by the Federal courts in any review of the case. His
decision is given great weight because he is the man who, under the law, has the duty of
listening to the witnesses and passing upon their credibility. The Commission may adopt,
in whole or in part, the decision of the hearing examiner or may set it aside completely, in
which case the Commission either rewrites the decision or remands it to the hearing examiner
for the taking of further testimony.
Performance during fiscal 1961 shows that the Commission's hearing examiners handled
a record number of cases; nevertheless at the
44

year's end the number to be disposed of had increased over the previous year, as shown by the following
table:
Fiscal year
1955 . . . . . . . . . . . . . .

1956
1957
1958
1959
1960
1961

45

..............
..............
..............
..............
..............
..............

On hand

126
167
181
199
248
232
373

Received

165
201
250
377
376
545
444

Total
handled

291
368
431
576
624
777
817

Disposed
of

124
187
232
328
392
404
436

On hand

167
181
199
248
232
373
381

Hearing
days

611
670
733
783
779
858
9281/2

Chapter Seven

OFFICE OF THE GENERAL COUNSEL

The General Counsel and the attorneys of his staff represent the Commission- as its
counsel in all cases advancing beyond the agency, or otherwise arising in the courts. When
Commission cases reach the Supreme Court, the legal services devolving upon the
Commission are performed by this Office in collaboration with the Solicitor General of the
United States.
The General Counsel functions as the Commission's law officer and principal legal
adviser. In addition to the courtwork, his Office administers the Webb-Pomerene Export
Trade Act; passes upon all trade practice rules and "Guides" before their issuance by the
Commission; gives informal advice to businessmen on trade regulation matters involving
laws administered by the Commission; reviews, analyzes, and prepares reports of the
Commission on new legislation; polices Commission cease-and-desist orders for compliance
purposes; initiates penalty suits by the Attorney General for enforcement of such orders;
institutes court action for enforcement of subpenas and for enforcement by actions in
contempt of court for disobedience to decrees affirming Commission orders; integrates
mandatory order compliance with work programs for securing voluntary adherence to
stipulations, trade practice rules, and guides.
The General Counsel represents the Commission in hearings before congressional
committees. The special legal assistants to the Commission are supervised by him. Legal
studies and manuals for guidance of the Commission's professional staff are prepared under
the supervision of the General Counsel.
Duties Conferred in Acts Administered by Other Agencies
The Office of the General Counsel also processes and reports upon industry voluntary
agreements and programs utilized under the Defense Production Act, also upon small
business production pools, research and development programs, and related agreements
under the Small Business Act. These are made subject to consultation with the Chairman of
the Commission prior to their being put into effect. The review by the General Counsel's
Office of these industry agreements, programs, and pools is directed to such purposes as
aiding small business, eliminating or minimizing anticompetitive effects that may run counter
to the basic policies of the Federal Trade Com46

mission Act and the antitrust laws, and preventing undue concentration of economic power.
DIVISION OF SPECIAL LEGAL ASSISTANTS
The principal assignment of this Division is the preparation of documents needed to
implement Commission decisions in adjudicative proceedings. The work includes the
examination of formal records and reporting on them to the Commission or individual
Commissioners.
Attorneys of the Division consult with Commissioners and staff members on questions
of law, policy, and procedure in connection with all phases of the Commission's work. They
prepare reports and recommendations on a wide variety of subjects, including questions of
substantive law, proposed trade practice rules, and proposed reports to the public.
During fiscal 1961 the Division prepared drafts of 368 case dispositions, of which 96
were final decisions and 272 were interlocutory. Division attorneys also prepared 1,77
miscellaneous reports and recommendations. This total of 545 documents represents an
increase of 63 over the number prepared in the preceding year.
APPELLATE DIVISION
The principal function of the Appellate Division is to represent the Commission in
proceedings in Federal courts.
Any person, partnership, or corporation against which the Commission has issued an
order to cease and desist may petition a, U.S. court of appeals to review and set aside the
order. Disobedience of a court's decree enforcing a Commission order or subpena may be
punished by the court as a contempt. When a subpena issued by the Commission has not
been obeyed, the Commission may apply to a U.S. district court to order compliance. Any
person suffering legal wrong because of final Commission action for which there is no other
adequate remedy in any court may obtain a review in a U.S. district court.
In addition to its courtwork, the Division prepares opinions and makes recommendations
on questions of substantive and administrative law and procedure arising in the work of the
Commission and in court proceedings.
During fiscal 1961 the Division handled 82 cases. It completed litigation in 35 cases, 4
of which were antimonopoly proceedings, 16 involved deceptive practices, 11 concerned the
Commission's subpena powers 1 involved a trademark cancellation proceeding, 1 was an
order enforcement proceeding, concerned the applicability of Public
47

Law 86-107 to Clayton Act orders including those previously outstanding, and 2 were suits
for injunction to restrain the Commission's actions.
The Supreme Court denied 10 petitions for certiorari to review courts of appeals decisions
in favor of the Commission. It also denied a petition filed on the Commission's behalf to
review an unfavorable decision. The Court granted 2 petitions, one filed on behalf of the
Commission.
Cases open for further action at the close of the fiscal year comprised 4 in the Supreme
Court, 39 in courts of appeals, and 4 in district courts. These included 23 antimonopoly, 15
deceptive-practice, 5 subpena, and 4 miscellaneous matters.
The Division filed 41 briefs and memoranda upon the merits, and assisted in the
preparation of 19 other briefs filed on the Commission’s behalf by the Department of Justice.
Twenty-eight arguments were made by the Division staff, and three others by the Department
of Justice. Proceedings to obtain court orders enforcing subpenas were initiated in 13 cases.
In addition, approximately 175 other papers were filed in cases in Federal litigation. The
Division made numerous other court appearances and participated in several conferences in
chambers. It represented the Commission in 10 of the 11 U.S. courts of appeals, in the U.S.
Court of Customs and Patent Appeals, and in 8 U.S. district courts.
Antimonopoly Cases in Federal Courts
In the Supreme Court
Decisions
There were no antimonopoly decisions in Commission cases by the Supreme Court this
fiscal year. However, the Court denied a petition for rehearing filed by Henry Broch, & Co.,
Chicago, Ill.
Petition for certiorari granted
Henry Broch & Co., seller's broker's unlawful sharing of brokerage with customer in
violation of section 2 (e) of the Clayton Act. Certiorari granted to review the Seventh
Circuit's modification of the Commission's order.
Petition for certiorari denied
American Motor Specialties Co., New York, N.Y., price discrimination in the purchase
of automotive products. Review of court of appeals decision (Second Circuit) affirming the
Commission's order was denied
48

Pending case
Mid-South Distributors, Inc., Memphis, Tenn., price discrimination in the purchase of
automotive products. Petition for certiorari filed from Fifth Circuit decision affirming order
of the Commission.
In Courts of Appeals
Decisions and other dispositions
Eight of the ten antimonopoly cases pending at the beginning of the year reached decision
before its close.
Crown Zellerbach Corp., San Francisco, Calif. (Ninth Circuit), unlawful acquisition of
competitor paper company. The Commission’s order was affirmed.
Eric Sand & Gravel, Erie, Pa. (Third Circuit), unlawful acquisition of competitor. The
court vacated the Commission’s order of divestiture and remanded the case to the
Commission for further consideration.
Swannee Paper Corp., Ramson, Pa. (Second Circuit), discriminatory payments for the
benefit of a food chain in connection with the advertising and resale of petitioner’s paper
products. The Commission’s order was modified and enforced.
Schick, Inc., Lancaster, Pa., and Sperry Road Corp., New York, N.Y. (D.C. Circuit). The
court held that Public Law 86-107 did not apply to cease-and-desist orders issued prior to
enactment of that statute.
Mid-South Distributors, Inc., Memphis, Tenn. (Fifth Circuit), price discrimination in the
purchase of automotive products. The Commission’s order was affirmed.
Thompson Ramo Wooldridge, Inc. (formerly known as Thompson Products, Inc.),
Euclid, Ohio (sixth Circuit), price discriminations in the sale of automotive products. The
petition to review the Commission’s order was dismissed pursuant to stipulation.
Anheuser-Busch, St. Louis, Mo (Seventh Circuit), price discrimination between
customers in different areas in sale of beer. On remand from the Supreme Court, the Court
set aside the Commission’s order and denied the Commission’s motion for remand.
Venus Foods, Los Angeles, Calif. (Ninth Circuit), violation of 2(c) of the Clayton Act.
The petition to review the Commission’s order was dismissed pursuant to stipulation.
Henry Broch & Co.., Chicago, Ill. (Seventh Circuit), seller’s broker’s unlawful sharing
of brokerage with customer. The court modified the Commission’s order, limiting the
prescription to transactions between the particular seller and buyer involved in the proved
violation.
49

Reynolds Metals Co., Richmond, Va. (D.C. Circuit), A. G. Spalding & Bros., Inc.,
Chicopee, Mass. (Third Circuit), both involving unlawful acquisitions of competing firms,
and Sun Oil Co., Philadelphia, Pa. (Fifth Circuit), involving price discrimination in gasoline
sales, remained pending at the close of the year.
Pending cases which arose during the year include: Mytinger and Casselberry, Inc., Long
Beach, Calif. (D.C. Circuit); Timken Roller Bearing Co., Canton, Ohio (Sixth Circuit),
exclusive dealing agreements in violation of section 3 of the Clayton Act in the distribution
of vitamin supplements and tapered roller bearings, respectively; Atlantic Refining Co.,
Philadelphia, Pa. (Seventh Circuit), Firestone, Tire & Rubber Co., Akron, Ohio (Fifth
Circuit), Goodyear Tire & Rubber Co., Akron, Ohio (Seventh Circuit), and Shell Oil Co.,
New York, N.Y. (Fifth Circuit) , all of which involve marketing arrangements for promoting
sales of tires, batteries, and accessories in restraint of trade; Alhambra Motor Parts Co., Inc.,
Alhambra, Calif. (Ninth Circuit), price discrimination in the purchase of automotive
products; Asheville Tobacco Board of Trade, Asheville, N.C. (Fourth Circuit), conspiracy,
in restraint of trade involving the allocation of selling time to warehousemen on the Asheville
tobacco market; Exquisite Form Brassiere, Inc., New York, N.Y. (D.C. Circuit), price
discrimination in the sale of brassieres and the applicability of the "meeting competition"
defense to the furnishing of promotional allowances; Pillsbury Co., Minneapolis, Minn.
(Fifth Circuit), and Scott Paper Co., Chester, Pa. (Third Circuit), unlawful acquisitions of
other corporations; Thomasville Chair Co., Thomasville, N.C. (Fifth Circuit), the,
procurement of discriminatory advertising and promotional payments; American News Co.,
New York N.Y. (Second Circuit), inducing and receiving from publishers discriminatory
promotional allowances; The Grand Union Co., Ne-v York, N.Y. (Second Circuit), receiving
discriminatory advertising and promotional allowances from suppliers.
Antideceptive Practice Cases in Federal Courts
In the Supreme Court
Petitions for certiorari denied
Review of courts of appeals decisions affirming and enforcing Commission orders was
denied in the following cases:
Bantam Books, Inc., New York, N.Y. (Second Circuit), failure to disclose abridgment of
books or substitution of title.
Allen V. Tornek, New York, N.Y. (D.C. Circuit), false and misleading advertising of
watches.
Niresk Industries, Inc., Chicago, Ill. (Seventh Circuit), false advertising of electric
cooker-fryers.
50

Hunter Mills Corp., New York, N.Y. (Second Circuit), misbranding of wool products and
the furnishing of false guarantees with respect thereto.
Theodore Kagen Corp., New York, N.Y. (D.C. Circuit), false and misleading advertising
of watches.
Peerless Products, Inc., Chicago, Ill. (Seventh Circuit), sale of punchboards for use of
others in selling merchandise by lottery.
Ward Laboratories, Inc., New York, N.Y. (Second Circuit), misrepresentation in
connection with the sale of preparations for the treatment of hair and scalp.
Pending case
Evis Manufacturing Co., San Francisco, Calif., false advertising of a water-conditioning
device. Petition for certiorari filed on behalf of the Commission from Ninth Circuit decision
setting aside the Commission's order.
In Courts of Appeals
Decisions and other dispositions
Nine of the twelve cases pending at the beginning of the year reached decision before its
close. In four of these the Commission's orders to cease and desist were affirmed and
enforced:
Max H. Goldberg, t/a Novel Co., Chicago, Ill. (Seventh Circuit), sale and distribution of
merchandise by lottery.
Theodore Kagen Corp., New York, N.Y. (D.C. Circuit), failure to disclose true
composition of metal in simulated gold watch cases.
Peerless Products, Inc., Chicago, Ill. (Seventh Circuit), sale of punchboards for use of
others in selling merchandise by lottery. Petition for rehearing denied.
Hunter Mills Corp., New York, N.Y. (Second Circuit), misbranding of 'wool products and
the furnishing of false guarantees with respect thereto.
In two cases the Commission's orders to cease and desist were modified:
Maurice J. Feil and Leo A. Loeb, t/a The Enurtone Co., Los Angeles, Calif. (Ninth
Circuit), misrepresentation of a device designed to cure bed wetting.
Morton’s, Inc., Boston, Mass. (First Circuit), misbranding, and fictitious price advertising
of fur products in violation of the Fur Products Labeling Act.
One case, Michael Silver (Kulin Waste, Co.), Worcester, Mass. (First Circuit),
misbranding of wool products, was dismissed for lack of prosecution by petitioner. The
courts twice reversed the Commission's decisions and set aside its orders: Globe Readers
Service , Inc., Michi51

gan City, Ind. (Seventh Circuit), deceptive practices in the solicitation and sale of magazine
subscriptions, and Evis Manufacturing Co., San Francisco, Calif. (Ninth Circuit), false
advertising of a water conditioning device.
Five cases arose and reached decision during the year. In three of these, the
Commission's orders to cease and desist were affirmed and enforced: Nate Gellman,
Minneapolis, Minn. (Eighth Circuit), distribution of punchboards designed for use in sale of
merchandise; Clinton Watch Co., Chicago, Ill. (Seventh Circuit), fictitious pricing of watches
and misrepresentation of guarantees thereon; Hoving Corp., New York, N.Y. (Second
Circuit), misbranding and false and deceptive invoicing and advertising of fur products in
violation of the Fur Products Labeling Act.
Two other petitioners for review of Commission orders were dismissed pursuant to
stipulations of the parties: Arnold Constable Corp., New York, N.Y. (Second Circuit),
fictitious price advertising of luggage and cashmere coats, and Witkower Press, Inc.,
Hartford, Conn. (D.C. Circuit), false advertising of book entitled "Arthritis and Common
Sense."
Pending cases
Travelers Health Association, Omaha, Nebr. (Eighth Circuit), misrepresentation of
insurance policies. Pending throughout the year on remand from the Supreme Court.
Bankers Securities Corp., Philadelphia, Pa. (Third Circuit), fictitious price advertising of
rugs.
Holland Furnace, Co., Grand Rapids, Mich. (Seventh Circuit), unfair and deceptive
practices in the sale of furnaces and parts. Pending throughout the year.
Samuel A. Mannis, Hollywood, Calif. (Ninth Circuit), false and deceptive invoicing and
advertising of fur products in violation of the Fur Products Labeling Act.
Baltimore, Luggage Co., Baltimore, Md. (Fourth Circuit), fictitious pricing of luggage.
Samuel A. Cannon, Newark, N.J. (D.C. Circuit), misrepresentation of correspondence
courses purporting to secure government employment for subscribers.
Harry Carr, Boston, Mass. (First Circuit), misbranding of wool products in violation of
the Wool Products Labeling Act.
Exposition Press, Inc., New York, N.Y. (Second Circuit), misrepresentation of royalties
in connection with book publishing.
United States Retail Credit Association., Inc., Mentor, Ohio (Fourth Circuit), use of
deceptive trade name and other misrepresentations in the collection of delinquent accounts.
52

Wren Sales Co., Inc., Chicago, Ill. (Seventh Circuit), sales plans involving operation of
games of chance, gift enterprises and lottery schemes.
Proceedings in Federal Courts for Enforcement of Orders
In the Supreme Court
Petition for certiorari granted
St. Regis Paper Co., New York, N.Y. Petition granted to review two questions decided
favorably to the Commission by the Second Circuit: (1) that in an investigation of possible
violation of section 7 of the Clayton Act, the Commission is entitled to obtain, under an order
requiring special reports, retained copies of U.S. census reports; and (2) that the $100-perday penalty provided by section 10 of the Federal Trade Commission Act applies to St. Regis'
default in filing the report.
In Courts of Appeals
Decisions
Washington Fish & Oyster Co., Seattle, Wash. (Ninth Circuit). The Commission’s
application for enforcement of its order was granted
St. Regis Paper Co., New York, N.Y. (Second Circuit). The court reversed the decision
of the district court (Southern District of New York) on the Commission's appeal and
affirmed that decision on the defendant's cross-appeal. St. Regis' petition for certiorari has
been granted as to two of the issues (see statement, supra).
Subpena Enforcement Cases in Federal Courts
In the Supreme Court
Petition for certiorari was denied in three cases:
Flotill Products, Inc., Stockton, Calif., and Hunt Foods & Industries, Inc., Fullerton,
Calif., filed petitions for certiorari to review two Ninth Circuit decisions affirming district
court orders enforcing Commission subpenas.
Walter L. Dilger (Beatrice Foods Co.), Chicago, Ill., petition for certiorari filed on behalf
of the Commission to review the Seventh Circuit's decision reversing a district decision
enforcing a Commission subpena.
53

In Courts of Appeals
Decisions
Hunt Foods & Industries, Inc., Fullerton, Calif. (Ninth Circuit), the court affirmed the
district court's enforcement of the Commission's subpena. The Ninth Circuit also denied a
petition for rehearing by Flotill Products, Inc., Stockton, Calif.
Pending case
Elmer C. Adams, Sr, & Elmer C. Adams, Jr., St. Louis, Mo. (Eighth Circuit), on crossappeals from decisions of district court, infra.
In District Courts
Decisions and other dispositions
The district courts enforced the Commission's subpenas in Norwood's, Inc., Northampton,
Mass. (District of Massachusetts); Cumberland Farm Dairy, Inc., Woonsocket, R.I. (District
of Rhode Island); Television Service Association of Delaware Valley, Philadelphia, Pa.
(Eastern District of Pennsylvania) ; and Plantation Pipe Line Co., Atanta, Ga. (District of
Columbia). The courts denied enforcement in Walter Dilger, secretary of Beatrice Foods
Co., Chicago Ill. (Northern District of Illinois), and ordered enforcement as to certain
specifications and denied enforcement as to others in Elmer C. Adams Sr. & Elmer C.
Adams, Jr., St Louis, Mo. (Western District of Missouri).
Commission applications for enforcement of subpenas were withdrawn in Fishell and
Fishell & Associates et al., Los Angeles, Calif. (Southern District of California), and KayserRoth, Corp., New York, N.Y. (Southern District of New York).
Pending cases
Three subpena enforcement cases were pending at the close of the year:
Horace G. Barden, Chicago, Ill. (Northern District of Illinois) Moore Business Forms,
Niagara Falls, N.Y. (District of Columbia); and Standard American, Inc., Philadelphia, Pa.
(Eastern District of Pennsylvania).
Trademark Cancellation Proceeding in Federal Court
Bart Schwartz International Textiles, Ltd., New York, N.Y. (U.S. Court of Customs and
Patent Appeals). The court affirmed a decision of the Trademark Trial and Appeal Board
granting the Commission's petition to cancel a fabric trademark obtained by fraud.
54

Suits Against the Commission in Federal Courts
In Courts of Appeals
Decisions
Bigelow-Sanford Carpet Co., New York, N.Y., and Courtaulds (Alabama), Inc., Le
Moyne, Ala. The District of Columbia Circuit affirmed the district court's decisions in favor
of the Commission in suits for declaratory judgment and injunctive relief as to the
Commission's promulgation of certain rules and regulations under the Textile Fiber Products
Identification Act.
In Nash-Finch, Co., Minneapolis, Minn. (D.C. Circuit), the court affirmed the district
court's holding that Public Law 86-107, amending the Clayton Act, does not apply to orders
issued prior to its enactment.
In District Courts
The District Court for the District of Columbia granted the Commission’s motion to
dismiss a complaint for injunction filed by S. Klein Department Stores, Inc., New York, N.Y.
The court also granted the Commission's motion for summary judgment in Courtaulds
(Alabama), Inc., Le Moyne, Ala. Similar injunctive relief was likewise denied to Carl
Brandenfels, St. Helens, Oreg., who sought to enjoin the Commission from investigating ,t
hair and scalp treatment business.

DIVISION OF COMPLIANCE
This Division obtains and maintains compliance with the Commission's cease-and-desist
orders. Without continuous surveillance, the Commission is unable to know whether or how
its orders are being obeyed.
Each respondent is required to report how he is complying with these orders and intends
to do so in the future. Immediately following the entry of an order, the Division scrutinizes
these reports and augments them where necessary by conferences, supplemental report-S, or
investigations. In addition, the DivisionRequests and analyzes results of the investigations of complaints of violation of orders.
Collaborates with U.S. attorneys at their request for prosecution in district courts of the
United States in civil penalty suits based on violation of Commission orders.
Works out acceptable voluntary compliance program.
Discovers violations and speeds prosecutions of the penalty provisions of the Federal
Trade Commission Act, which is imperative in the public interest.
55

NOTE.-Violation of a cease-and-desist order makes a respondent liable to civil penalty up to $5,000 for
each violation. Where the violation continues, each day of its continuance is a separate offense.
Penalty proceedings during fiscal 1961
Pending July 1, 1960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Filed during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
____
Total for disposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Disposed of during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
____
Pending June 30, 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Certified, not yet filed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Summary of civil suits since 19471
Fiscal year

1947
1948
1949
1950
1951
1952
1953
1954
1955
1

Total Judgments

Suits certified to the
Attorney
General

1
$38,000.00
............
0
............ ..........
0
16,900.00
............
9
7,000.00
............
1
80,000.00
............
5
11,600.00
............
3
59,538.20
............
2
8,950.00
............
11
40,132.69
............
This Division was established In May 1947.

Fiscal Year

1956
1957
1958
1959
1960
1961

............
............
............
............
............
............

Total . . . . . . . .

Total
Judgments
$19,342.70
24,704.60
21,557.38
55,650.00
39,300.00
38,000.00
_________
460,675.57

Suits certified to the
Attorney
General
9
12
11
10
25
33

Civil Penalty Cases Concluded

Americana Corp. (Md.). Misrepresentations made in connection with the sale of
encyclopedias and other books. Judgment for $16000.
Crown Manufacturing Co., Inc. (E.D. Pa.). Misbranding and false invoicing of woolen
interlinings. Judgment for $5,000.
William C. Moore. & Co. (W.D. Wash.). Misrepresentation of nursery stock, fertilizer,
and planting materials. Judgment for $10,000.
Shay Auerbach (E.D.N.Y.). False invoicing of wool products. Judgment for $7,000.
Civil Penalty Cases Pending
Vulcanized Rubber & Plastics Co. (Supreme Court). Misrepresentations as to the rubber
content of combs designed for use on human hair. Judgment of $6,000 entered in the
Eastern District of Pennsylvania and affirmed by the Third Circuit. Pending upon petition
for certiorari.
Universal Wool Batting Corp. et al. (S.D.N.Y.). Misbranding of wool batting.
56

Maurice J. Lennett (Mass.). Failure to disclose prior use of automobile springs.
Fong Poy (N.D. Calif.). Misrepresentation of herbs and drugs sold for use in the treatment
of various diseases.
Superior Wool Batting Corp. (E.D.N.Y.). Misbranding of wool batting.
National Training Service, Inc., et al. (Conn.). Misrepresentation of courses of study
designed to prepare purchasers thereof for examination for civil service positions.
United States Printing & Novelty Company (S.D.N.Y.). Sale of lottery devices.
Kenneth R. Ogle (S.D. Ohio). Misrepresentations of photographic albums and
certificates for photographs.
Sears, Roebuck & Co. (D.C.). Misrepesentations of savings afforded purchasers of
automobile tires.
Sterling Materials Co., Inc. (E.D.N.Y.) Misrepresentation of roofing and foundation
paints.
Ohmlac Paint & Refining Co. (E.D.N.Y.). Misrepresentation of roofing and foundation
paints.
Carbozite Protective Coatings, Inc. (E.D.N.Y.). Misrepresentation of roofing and
foundation paints.
National Toilet Co. (Tenn.) Misrepresentation of a cosmetic preparation.
Harold Schiff et al. (Md.). Bait and switch advertising of vacuum cleaners.
Empire Press, Inc. (N.D. Ill.). Sale of lottery devices.
Magic Weave, Inc. (Mass.). Misrepresentations of a reweaving kit and course of
instruction.
George's Radio & Television Co., Inc. (D.C.). Misrepresentation of regular price of
television sets.
Doris Savitch (E.D.N.Y.). Misrepresentation of a drug preparation.
Permanent Stainless Steel, Inc. (S.D. Tex.) Misrepresentation of stainless-steel cooking
utensils.
L. M. Clothing Co., Inc., et al. (S.D.N.Y.). Misbranding of wool products.
Matthew B. Huttner et al. (S.D.N.Y.). Failure to reveal that books had previously been
published under different titles.
Leonard Melley (D.C.). Misrepresentation of encyclopedias.
Gerald .C. Burd (N.D. Calif.). Misrepresentation of cooking equipment and supplies
therefor.
Lewis I. Heater et al. (N.D. Calif.). Misrepresentation of a correspondence course
designed to train purchasers in the field of motel management.
625514-62—5
57

Gene J. Davidson (E.D. Pa.). Misrepresentation of vending machines.
Woody Fashions, Inc., et al. (S.D.N.Y.). Misbranding of wool products.
Columbia Alkali Corp. et al. (N.D. Ohio, E.D.). Penalties for violations of order
prohibiting concerted price-fixing and related activities.
In all civil penalty cases the Division prepares for transmission with the certification to
the Attorney General, for filing in the U.S. district court all the necessary pleadings and a
trial memorandum, and offers full aid of its attorneys in prosecution and trial of the case.
Usually the offer is accepted and the Division attorneys not only fully participate but often
solely conduct the trials. They also prepare all necessary further pleadings and briefs for
filing with the court, which includes requests for admissions, interrogatories, objections,
motions, and court findings, and personally arrange and take all necessary oral depositions
of those witnesses who cannot be subpenaed to appear personally.
The primary objective is to obtain compliance with orders rather than to exact a large
number of civil penalty judgments. This cannot be achieved without prompt application of
civil penalty procedures when compliance apparently cannot be obtained otherwise.
Experience shows that a respondent may be in compliance today and in violation 3 or 4
years hence, and that without reasonable and continued surveillance approximately 70
percent of such orders would have no meaning or effect. In at least 70 percent of the
compliance cases handled it is necessary to do much more than analyze and file reports. In
about two-thirds of the cases which involve continued work, they do so either because the
original reports of compliance later prove unsatisfactory, or new violations are discovered.
Most orders involving restraints of trade are issued under , the Clayton Act, and until July
23, 1959, when the President signed Public Law 86-107 amending section 11 of that act, had
no finality unless enforced by decree by the U.S. court of appeals after proof of violation, and
proof of a further violation was necessary for a fine in contempt. As amended, the same
finality and penalties for violations apply to Clayton Act orders as apply to Federal Trade
Commission Act orders, specifically exempting only court proceedings initiated under
section 11 prior to the date of the enactement of the amendment. However, the U.S. Court
of Appeals for the D.C. Circuit has held that Public Law 86-107 does not apply to orders
which were outstanding at the time of its enactment. Sperry Band Corp. v. F.T.C., 288 F. 2d
403 (decided February 19, 1961) ; Schick, Inc. v. F.T.C., 288 F. 2d 407 (decided February
9, 1961) ; Nash Finch Co. v. F.T.C., 288 F. 2d 407 (decided February 15,1961).
58

During fiscal 1961 this Division conducted a survey of identical bidding by manufacturers
of steel products in connection with proposals for sealed bids from public agencies, and
considerable documentary evidence relating to the question of compliance by the more than
70 steel manufacturers subject to the Commission's cease-and-desist order against the steel
industry (American Iron & Steel Institute et al., docket 5508) is currently under study.
Also, in connection with the Commission's order in Cement Institute et al., docket 3167,
an industrywide price-fixing conspiracy matter, detailed information and data have been
secured relating to identical delivered prices, uniform terms of sale, trucking policies, and
other trade practices of the respondent cement producers in certain areas, which are being
analyzed to determine whether, and to what extent, the cease-and-desist order may have been
violated. World on these cases is in progress and has not reached the stage of release for the
public record.
The Division instituted, during fiscal 1961,26 investigations of compliance with Clayton
Act orders, 14 of which are still outstanding., A total of 1'70 compliance investigations was
instituted and supervised by the Division, 40 of which were in connection with antimonopoly
matters. The Division received from the Commission for attention to compliance 103
antimonopoly orders and 302 antideceptive orders issued during the year.
Current Order Compliance
The most substantial portion of the Division's work consists of securing compliance
reports and, where necessary, enforcing compliance with orders currently issued. As each
order is issued, the Division must study and analyze reports to insure that respondents adjust
their business practices to conform to the Commission's cease-and-desist orders, and where
voluntary compliance cannot be obtained, to initiate and pursue enforcement in the court.
Statistics on Matters and Cases Handled in Fiscal 1961
"Matters" consist of (a) reports of compliance for processing; (b) complaints of alleged
violation of orders; (a) conferences and opinions regarding compliance; and (d) initiating and
processing preliminary inquiries into compliance. Each category of these “matters" is a
distinct operation requiring substantial man-hours. In other words, the same case often
requires handling several times, as is apparent from the following table showing the number
of “matters" and the number of "cases" handled, and disclosing that 1,315 "matters" handled
involved but 448 cases.
59

Matters
Fiscal 1961
Total pending July 1, 1960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,880

Received during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
,472
Total for disposition during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,352
Disposed of during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,315
Total pending June 30, 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,037
Cases
Cases pending July 1, 1960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619
Received during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
Total for disposition during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,193
Disposed of during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
448
Cases pending June 30, 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745
OFFICE OF EXPORT TRADE

By the Webb-Pomerene (Export Trade) Act of 1918, the Congress of the United States
authorized cooperative activity among American exporters, within certain circumscribed
bounds, for the purpose of promoting the foreign trade of the United States. This legislation
was predicated upon the assumption that if Americans are to enter the markets of the world
on more nearly equal terms with their organized competitors and their organized customers,
and if small American producers and manufacturers are to engage in export trade on
profitable terms, they must be free to unite their efforts and encouraged, through certain
dispensations from the restrictions of the, Sherman Antitrust Act.
At the time of their formation, export trade associations are required to file with the
Commission various documents descriptive of their organizational structure and manner of
operation.
The Office of Export Trade performs staff functions related to the Commission's
administration of the Webb-Pomerene Act. Such responsibilities embrace supervisory
authority over export associations and the corollary duty of inquiring into, and recommending
reform of, activities outside the act's permissive area.
During 1960, 38 export associations were registered with the Commission. Their total
exports, in terms of dollar values, by classes of products, were as follows:
Class of exports
Value
Metal and metal products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,806,858
Products of mines and wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,249,322
Lumber and wood products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,041,816
Foodstuffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,605,978
Miscellaneous, including motion pictures, textiles, rubber products, etc . . . . . . . . . . . . . . . . 611,381,159
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 928,085,133
60

LEGISLATION
The General Counsel, as principal legal adviser to the Commission, with the primary
assistance of an Assistant General Counsel who specializes in this field, advises and assists
the Commission upon legislative matters.
No legislation directly relating to the Commission was enacted by the Congress during
the fiscal year. of importance to the Commission, however, and possibly affecting the
administration of its laws, is Public Law 86-752, the Communications Act Amendments,
1960, approved September 13, 1960. Sections 8 and 9 of that act deal with and proscribe the
practices of "payola,” “ plugola," and the broadcasting or telecasting of rigged quiz shows.
Immediately following congressional hearings, which brought such practices to light, the
Commission assumed jurisdiction in the "payola" field and over 100 consent cease-and-desist
orders were issued. After enactment of the above statute, however, the Commission
withdrew from this area since it was deemed that Congress had chosen the Federal
Communications Commission as the agency to formulate and prosecute governmental policy
in these fields. The disposition of the outstanding Commission orders awaits the
promulgation by the Federal Communications Commission of new rules implementing its
responsibilities under the statute.
There are several legislative proposals pending in Congress on which the Commission
continues to urge favorable action. Of particular interest are bills to require that notification
of proposed matters be made to the Commission by corporations of significant size engaged
in interstate commerce. As an important corollary provision, the Commission seeks to have
legislation enacted which would enable it after proper hearings and with adequate provisions
for court review, to issue preliminary injunctions or restraining orders against proposed
mergers pending determination as to violation of section 7 of the Clayton Act.
Another series of bills pending in Congress propose amendments to the Federal Trade
Commission Act to empower the Commission to issue temporary cease-and-desist orders to
restrain certain acts and practices violative of statutes over which the Commission has
jurisdiction pending completion of the adjudicative proceedings before the Commission.
The Federal Trade Commission has also indicated to Congress that it favors enactment
of a bill which would amend the Federal Trade Commission Act so as to provide for certain
disclosures in advertisements of prescription drugs. The proposal would require that such
advertisements would be deemed to be misleading in a material respect unless containing
conspicuous and truthful disclosure
61

of the quantitative formula of the drug, its side effects, contraindications and its efficacy.
The Commission has stressed that with the recent advances in the drug industry, resulting in
many new miracle drugs, advertisements thereof addressed to the medical profession should
reveal full information as to the possible effects of such drugs on the human body and health.
In the course of legislative work during the fiscal year 1960-61, the Commission reported
on 28 bills and legislative proposals. In addition, oral presentation and participation were
made with regard to 13 bills or items of congressional committee consideration.
62

Chapter Eight

CONSULTATION

Securing voluntary compliance with Commission laws on an industrywide basis is the
primary mission of this Bureau.
The principal tools used in accomplishing this objective are Guides and Trade Practice
Rules. Other means involve the negotiation of stipulation agreements and individual advice
to small businessmen.
These voluntary procedures are extremely effective in supporting any genuine desire of
businessmen to compete fairly. In securing the maximum amount of industrywide voluntary
law observance, two desirable results are achieved: (1) competitive inequities are minimized,
and (2) consumers are benefited by the elimination of unfair practices, principally false
advertising.
Further explanation of the functions and accomplishments of this Bureau follow.
DIVISION OF TRADE PRACTICE CONFERENCES
This Division is responsible for administering the Commission's trade practice conference
program. Its primary objective is to obtain expeditious industrywide voluntary compliance
with laws administered by the Commission. The results of this work considerably reduce the
need for mandatory processes, and the expense and competitive inequities incident thereto.
The Division's endeavors fall in three categories: (1) the establishment and revision of
trade practice rules, (2) obtaining compliance Lit with rules, and (3) interpretive and
educational work under the rules.
Rulemaking
Proceedings to establish trade practice rules usually commence with an application
received from a particular industry. This proposal is considered from the standpoint of
effecting and maintaining substantial improvement is law observance by members of the
industry. The Commission normally authorizes proceedings in those instances where it
appears that the interests of the industry will be constructively advanced on sound
competitive principles and better law observance achieved. Trade practice rule proceedings
also may be initiated by the Commission.
63

Upon authorization, the first step in the proceeding is an industry conference where all
industry members are afforded opportunity to propose and discuss appropriate trade practice
rules for their industry. After considering this information and other relevant facts, a draft
of proposed rules is submitted to the Commission for release for a public hearing. After the
public hearing a study is made of the entire record and final rules are submitted to the
Commission with the recommendation that they be approved and issued.
Accomplishments During Fiscal 1961
New rules were promulgated for the Fluorocarbons Industry, and revised rules were
promulgated for the Hosiery Industry and the Poultry Hatching and Breeding Industry.
Trade practice conferences were held for the Residential Aluminum Siding Industry,
Pleasure Boat Industry, Florida, Fresh Citrus Fruit Industry, Stationers' Industry, Household
Furniture Industry, and Fresh Fruit and Vegetable Industry.
Public hearing was held in the rule revision proceedings for the Luggage and Related
Products Industry. Twelve new applications for trade practice proceedings were received,
and at the end of the fiscal year proceedings for the establishment of rules for 30 industries
were pending in various stages of processing.
Among other applications for trade practice conferences received and given attention
during the year was that of the Rebuilt Automotive Parts Industry. Here involved is failure
to reveal that industry products have been rebuilt, reconditioned, etc., as the case may be.
Other pending proceedings advanced during the year include those for the Metallic Watch
Band Industry, Mirror Manufacturing Industry, Wholesale Optical Industry, Wire Rope
Manufacturing Industry, and Metal Clad Door Industry.
Rule Administration
Trade practice rules are presently in effect for 162 industries. The Division's
administration work is directed toward obtaining and maintaining industrywide voluntary
compliance -with these rules. This entails a close working liaison with industry members and
their trade associations, furnishing rule interpretations and advice to industry members,
issuing warnings on courses of business conduct that would contravene rule provisions,
conducting discussions on subjects covered by rules, and effecting voluntary discontinuance
of practices found to violate rule requirements. During the year satisfactory disposition was
effected in 513 rule compliance matters.
64

Educational work designed to effect voluntary compliance included the holding of
conferences with department stores and chain drug and variety stores in Chicago, Phoenix,
Los Angeles, and San Francisco. Staff members discussed the advertising and sale of
jewelry articles and watches as well as the Commission's Guides on pricing, guarantees, bait
advertising, and advertising allowances. The conferences were arranged in cooperation with
various trade associations, including the National Retail Merchants Association and the
Better Business Bureaus.
Statistics relating to rule compliance activities during fiscal 1961 are as follows:
Compliance matters pending July 1, 1960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361
New compliance matters initiated during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570
____
Total for disposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 931
Disposed of during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
Pending June 30, 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418
Statistics relating to rule interpretation work during fiscal 1961 are as follows:
Rule interpretation matters pending July 1, 1960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Rule Interpretations received during fiscal 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
_____
Total for disposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
Rule Interpretations effected during fiscal 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286
_____
Rule Interpretation matters on hand June 30, 1961
17

DIVISION OF STIPULATIONS
This Division administers the program for obtaining voluntary law observance through
the negotiation of stipulations to cease and desist. The stipulation procedure is designed to
afford an informal means whereby a person charged with law violation could present his side
of the matter and enter into an agreement or stipulation to discontinue those practices the
Commission believes to be unlawful. A stipulation becomes effective when approved by the
Commission and is a matter of public record.
The Division also has the responsibility of obtaining compliance with approved
stipulations.
In fiscal 1961 the Commission approved 146 stipulations and 13 were pending with the
Commission at the close of the year. A summary of stipulation negotiations for the fiscal
year follows:
Cases pending in the Division July 1, 1960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Cases received by the Division during fiscal 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
____
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
65

Reported to the Commission for action on executed stipulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Reported to the Commission for instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reported to the Commission with recommendation that complaint issue . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reported to the Executive Director or Secretary with closing recommendation . . . . . . . . . . . . . . . . . . . 2
Referred to the Bureau of Investigation for further attention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
___
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
___
Cases pending in the Division June 30, 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

DIVISION OF SMALL BUSINESS
This Division informally advises small businessmen concerning trade regulations
administered by the Commission.
Two objectives are sought: (1) to give informal advice and opinions to small
businessmen, thereby aiding them to voluntarily conduct their business practices legally and
(2) to advise small businessmen on how to prepare applications for complaint against illegal
acts and practices of their competitors or suppliers.
Problems confronting small businessmen involve a wide variety of possible situations
calling for the interpretation of the statutes administered by the Commission. Each request
is given the research, consultation, or liaison work required. Whenever appropriate, the
advice and opinions furnished are supported by citations and relevant documents.
Statistical Summary
Matters in process July 1, 1960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Matters received during fiscal year 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583
Matters completed during fiscal year 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540
Matters pending June 30, 1961 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

GUIDE PROGRAM
Through this program the, Commission seeks to accomplish two principal objectives: (1)
to spell out in layman's language the requirements of the law applicable to different types of
advertising practices under the, Federal Trade Commission Act and discriminatory practices
under the Robinson-Patman Act; and (2) by diligent administration of the Guides to see that
a maximum degree of voluntary compliance with the law is obtained. The Guides serve the
additional purpose of spotlighting persistent violations which warrant the application of
formal corrective procedures.
Beginning in 1955 the Commission issued the following Guides:
Cigarette Advertising Guides . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tire Advertising Guides . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guides Against Deceptive Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guides Against Bait Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guides Against Deceptive Advertising of Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guides for Advertising Allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66

1955
1958
1958
1959
1960
1960

The Division's work on all of the above Guides during the fiscal year resulted in the
disposition of 845 individual cases, the furnishing of 335 individual interpretations, and the
distribution of 116,126 copies of all the Guides.
During the year, Bureau officials conducted citywide meetings with businessmen in
various cities throughout the country to discuss in detail the requirements of the Guides in
particular and Commission law in general. These meetings consisted of formal presentations
by Commission personnel of the problems frequently encountered under the Guides,
followed by extensive question-and-answer periods during which businessmen were afforded
an opportunity to raise questions of particular concern to them. Meetings were held in
Cincinnati, Memphis, Hartford, Tampa, Boston, Mobile, Birmingham, Seattle, Portland, and
Evansville, Ind.
A special project not specifically covered by the Guides was also undertaken following
receipt of complaints alleging that refrigerator manufacturers and sellers had been
misrepresenting actual storage capacity by advertising the gross capacity, which included the
space occupied by the condenser, coils, baffles, insulated partitions and ducts. Traditionally,
capacity had been expressed in terms of net volume and referred only to actual storage area.
A letter was sent to all members of the industry warning that the practice appeared to be
deceptive. These communications were successful in obtaining prompt and virtually
complete elimination of the deception.
Deceptive Pricing
For the second successive year, compliance work under the Deceptive Pricing Guides
doubled the volume of the preceding year. A total of 481 individual cases was disposed of,
238 of which were closed upon receipt of an adequate assurance of discontinuance
accompanied by revised advertising. Evidence of the continuing interest of businessmen in
these particular Guides was demonstrated by the fact that during the year 20,000 copies were
distributed, in addition to the estimated one,-half million copies distributed when the Guides
were first promulgated.
Tire Guides
Administration of the Tire Advertising Guides continued with the handling of 148 cases,
56 of which were closed following receipt of adequate assurances of discontinuance
supported by samples of revised advertising. The Bureau undertook industrywide programs
to warn industry members against certain practices which were becoming more prevalent.
These included the advertising of half-price
67

sales where only the second tire was offered at half-price; savings mathematically
misrepresented by means of trick computations; guarantee advertising where many
advertisers were failing to disclose that their guarantees were prorated and where it appeared
that the proration was based on a fictitious list price. Warnings also were issued against the
growing problem of advertised selling prices in comparison with higher "no trade-in prices"
in situations where few, if any, sales were made without "trade-ins."
Guarantees
During this first full year of administration of the Guides Against Deceptive Advertising
of Guarantees, the Division was able to dispose of 176 complaints alleging violations, 55 of
which were closed following receipt of adequate assurances of compliance accompanied by
revised advertising showing that the new ads contained disclosures required by the Guides.
More than 20,000 copies of these Guides were mailed in response to 680 requests.
Moreover, industry members and others continued to reprint and distribute copies at their
own expense.
Negotiations on an industrywide basis were continued in industries where previously
there had been widespread failure to observe the principles set forth in the Guarantee Guides.
Noticeable improvement in advertising was achieved through such efforts with the
manufacturers of automobiles, electrical appliances, and water heaters.
Advertising Allowances
Interpretive work under the Guides for Advertising Allowances was continued during the
year which saw the staff of this Bureau supply interpretations regarding the manner in which
the Guides could be expected to apply to a number of complex situations which were
troubling various businessmen. The response to these Guides for Advertising Allowances
continued, with over 59,000 copies being distributed in response to over 1,000 requests.
68

Chapter Nine

ECONOMICS

The functions of this Bureau are to give economic and statistical assistance to the
Commission in its investigative and trial work and to make economic studies for publication
in response to requests by the President, by Congress, or by the Commission. As of June 30,
1961, all economic and statistical assistance and research work was conducted through the
Division of Economic Evidence and Reports.
DIVISION OF ECONOMIC EVIDENCE AND REPORTS
This Division at the request of other bureaus of the Commission, prepares economic
exhibits, analyzes economic evidence, compiles statistical materials, and assists in the
formulation of requests for economic data. For example, economic and clerical assistance
was given in the investigations and trial of merger cases, and statistical advice was given
concerning the investigation of television and radio rating organizations.
Work on "Part II-Concentration and Integration in Retailing" was begun with the mailing
of questionnaires to the companies canning and freezing fruit, juices, and vegetables. On
February 1, 1961, an interim staff report was released on the preliminary analysis of the data
submitted on frozen fruit, juices, and vegetables. One of the findings disclosed at that time
was that, although the industry had a large number of small concerns, sales were highly
concentrated among the large operators. About 80 percent of the freezers sold less than $2.5
million annually, the remaining 20 percent accounted for nearly 85 percent of total industry
sales.
The 10 large chains showed a marked tendency to purchase directly from the large
freezers. The 10 largest freezers supplied 54 percent of the direct frozen food purchases of
the 10 largest chains, and 80 percent of the direct purchases of the big chains were from the
28 freezers with annual sales volume exceeding $5 million.
Packer brands bulk largest in terms of total industry sales. In 1959 about 58 percent of
total sales were packer brands, 26 percent were customer branded, and 6 percent were sold,
largely for reprocessing, without brands. The ratios applying to chainstore purchases were
markedly different. Nearly 60 percent of the merchandise purchased directly by the
chainstores was under the chain's own label; about 40 percent was packer branded.
69

The individual independent grower under contract is the principal source of fruits and
vegetables for the freezer. In 1959 more than 75 percent of the green peas, spinach,
strawberries, and potatoes were so obtained. Other sources included facilities operated by
the freezers themselves and marketing cooperatives.
The freezers made more acquisitions in 1959 than in any of the previous years. In
contrast with 64 acquisitions by 33 companies between 1950 and 1959, in the latter year
alone 12 companies acquired 10 processing facilities, 2 distributing and warehousing
facilities, and 4 farms. The acquiring freezers ranged in size from medium to large.
The foregoing represent only preliminary findings. When the analysis of all forms has
been completed, a more comprehensive picture will have been developed of the market
structure of the frozen fruit and vegetable industry and the marketing patterns between
freezers and large chains, other food retailers, and other outlets. The data also will cover
promotional payments, contract terms, production, inventory information, and financial data.
The final report will analyze various interrelationships among freezers and between freezers
and retailers.
70

Chapter Ten

APPROPRIATIONS AND
FINANCIAL OBLIGATIONS

FUNDS AVAILABLE FOR THE FISCAL YEAR 1961
Funds available to the Commission for the fiscal year 1961 amounted to $8,009,500.
Public Law 86-626, 86th Congress, approved July 12, 1960, provided $7,507,500; and the
Third Supplemental Appropriation Act, 1961, Public Law 87-14, 87th. Congress, approved
March 31, 1961, provided $502,000.
Obligations by activities, fiscal year 1961
1. Antimonopoly:
Investigation and litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,446,735
Economic and financial reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616,604
Trade practice conferences, industry guides, and small business . . . . . . . . . . . . . . . . . . . . 133,700
2. Deceptive practices:
Investigation and litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,003,900
Trade practice conferences, industry guides, and small business . . . . . . . . . . . . . . . . . . . . 266,600
Textile and fur enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607,500
Lanham Act and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900
3. Executive direction and management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468,585
4. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,600
_________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,003, 124
Settlement Made Under Federal Tort Claims Act

During the fiscal year 1961 the Commission paid no claims nor were any claims pending.
Comparative Appropriations
Appropriations available to the Commission for the past 3 fiscal years and 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
1959 . . . . . . .

1960 . . . . . . .
1961 . . . . . . .

Number of
employees
732
782
855

Nature of appropriation

Appropriations

Lump sum . . . . . . . . . .
. . . do . . . . . . . . . . . . . .
. . . do . . . . . . . . . . . . . .

$6,488,000
6,840,000
8,009,500

Obligations
$6,476,661
6,839,059
8,003,124

Balanc
$11,399
941
6,376
71

Chapter Eleven

APPENDIXES
Federal Trade Commission- 1915-61
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
Sigurd Anderson
William C. Kern
Edward T. Tait
Earl W. Kintner
Paul Rand Dixon
Philip Elman
72

State from which appointed
Wisconsin
Illinois
Georgia
Washington
New Hampshire
Minnesota
New 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
South Dakota
Indiana
Pennsylvania
Indiana
Tennessee
Maryland

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. 1, 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, 1934-Feb. 17, 1952.
Aug.27, 1935-Dec. 31, 1948.
Oct.15, 1945-Oct. 31, 1956.
Sept.28,1949-March 31, 1953
Nov. 16, 1949-Sept. 25, 1955.
Oct. 25, 1950-Sept. 25, 1953.
June 18, 1952-Sept. 25,1954.
April 1, 1953-Sept. 12, 1955.
Sept. 26, 1953-May 31,1959.
Sept. 26, 1954-.
Sept. 12, 1955-.
Sept. 26, 1955-.
Nov. 2, 1956-Oct. 31, 1960.
June 9, 1959-Mar. 20, 1961.
Mar. 21, 1961-.
April 21, 1961-.

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 (38 Stat. 730, 731, 732), amended
as Indicated below.
3. Webb-Pomerene Export Trade Act, approved April 10, 1918 (40 Stat. 516).
4. Wheeler-Lea Act, approved March 21, 19.38 (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 2 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, 1950, 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 Act. (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).
13. Public Law 85-909, 85th Congress, approved September 2, 1958 (72 Stat. 1749).
14. Textile Fiber Products Identification Act, approved September 2, 1958 (72 Stat. 1717).

Federal Trade Commission Act
[Public No. 203—63d Congress, as amended by Public-No. 447-75th Congress, as amended by Public-No.
459-81st Congress, as amended by Public-No. 542-82d Congress, as amended by Public-No. 85-791-85th
Congress, as amended by Public-No. 85-909—85th Congress]1
[H.R. 15613, S. 1077, H.R. 2023, H.R. 5767, H.R. 6788 and H.R. 9020]
An Act To create a Federal Trade Commission, to define its powers and duties, and for other purposes
SECTION 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
______________
1

The act is published as also amended by Public No. 706, 75th Cong. (see footnote 7). and as further amended,
as above noted, by Public No. 459, 81st Cong., ch. 6:1, 2d session, H.R. 2023 (An Act to regulate oleomargarine, etc.),
approved Mar. 16. 1950, and effective July 1, 1950 (see footnotes 9, 12, and 13).

625514-62—6

73

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, 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 his 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.2 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, payable in the same manner
as the salaries of the judges of the courts of the United States.3 The commission shall appoint a secretary,
who shall receive a salary of $5,000 a year,4 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
from time to time find necessary for the proper performance of its duties and as may be from time to time
appropriated for by Congress.5
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 find 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 paid on the presentation
of itemized vouchers therefor approved by the commission.
___________________
2

Under the provisions of section 3 of Reorganization Plan No. 8 of 1950, effective May 24, 1950 (as published
in the Federal Register for May 25, 1950, at p. 8175), the functions of the Commission with respect to choosing a
chairman from among the membership of the Commission were transferred to the President. Under said plan, prepared
by the President and transmitted to the Senate and House on Mar. 18, 1950, pursuant to the provisions of the
Reorganization Act of 1949, approved Tune 20, 1949, there were also transferred to the Chairman of the Commission,
subject to certain limitations, "the executive and administrative functions of the Commission, Including functions of the
Commission with respect to (1) the appointment and supervision of personnel employed under the Commission, (2) the
distribution of business among such personnel and among administrative units of the Commission, and (3) the use and
expenditure of funds."
3
The salary of the Chairman was fixed at $20,500 and the salaries of the other four Commissioners at $20,000
by Sec. 105(9) and Sec 106(a) (45), respectively, of Public Law 854, 84th Cong., ch. 804, 2d sess., H.R. 7619 (An Act
to adjust tie rates of compensation of the heads of the executive departments and of certain other officials of the Federal
Government, and for other purposes), approved July 81, 1956.
4
The salary of the Secretary is controlled by the provisions of the Classification Act of 1923, approved mar. 4,
1923, 42 Stat. 1488, as amended, which likewise generally controls the compensation of the employees.
5
See preceding footnote.

74

Until otherwise-provided by law, the commission may rent suitable offices for its use.
The Auditor for the State aid Other Departments shall receive and examine all accounts of expenditures
of the commission.6
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 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 power 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 States 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
____________
6

24.

75

Auditing of accounts was made a duty of the General Accounting Office by the Act of June 10, 1921, 42 Stat.

for the Government, and for other purposes,"' approved February 12, 1913; and also the Act entitled "An Act
6 supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved
October 15, 1914.
SEC. 5. (a) (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 label
or container of which bears, the trade-mark, brand, 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 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, law, 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 insofar as they are
subject to the Packers and Stockyards Act, 1921, as amended, 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.7
_______________
7

Public No. 542, 82d Cong., ch. 745, 2d sess., H.R. 5767, approved July 14, 1952 (the McGuire Act, 15 U.S.C.
45, 66 Stat. 631), amended sec. 5(a) of this act, by Inserting In lieu thereof see. 5(a) (1) through (6).
Theretofore, by subsection (f) of sec. 1107 of the "Civil Aeronautics Act of 1938," approved June 23, 1938, Public
No. 706, 75th Cong., ch. 60.1, 3d sess., S. 3845, 52 Stat. 1028, the language of former sec. 5(a) was amended by
Inserting Immediately following the words "to regulate commerce," the words "air carriers and foreign air carriers subject
to the Civil Aeronautics Act of 1938,” as above set out In sec. 5 (a) (6).
Public No. 85-909, 85th Cong., H.R. 9020, approved Sept. 2, 1958, amended the Packers and Stockyards Act, 1921,
as amended (7 U.S.C. 296, 227, and 72 Stat. 1749, 1750) by striking out subsec. (b) of sec. 406 and Inserting In lieu
thereof the following:
“(b) The Federal Trade Commission shall have power and jurisdiction over any matter involving meat, meat food
products, livestock products In unmanufactured form, or poultry

76

(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 In 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 record In the proceeding has been filed In
a court of appeals of the United States, as hereinafter provided, the Commission may at any time, upon 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 products, which by this Act to made subject to the power or jurisdiction
of the Secretary, as follows:
"(1) When the Secretary in the exercise of his duties requests of the Commission that It make
Investigations and reports In any case.
"(2) In any Investigation of, or proceeding for the prevention of, an alleged violation of any Act
administered by the Commission, arising out of acts or transactions involving meat, meat food products,
livestock products In unmanufactured form, or poultry products, if the Commission determines that effective
exercise of Its power or jurisdiction with respect to retail sales of any such commodities is or will be
Impaired by the absence of power or jurisdiction over all acts or transactions Involving such commodities
in such Investigation or proceeding. In order to avoid unnecessary duplication of effort by the Government
and burdens upon the Industry, the Commissioner shall notify the Secretary of such determination, the
reasons therefor, and the acts or transactions Involved, and shall not exercise power or jurisdiction with
regard to acts or transactions (other than retail sales) involving such commodities if the Secretary within ten
days from the date of receipt of the notice notifies the Commission that there is pending In his Department
an Investigation of, or proceeding for the prevention of, an alleged violation of this Act Involving the same
subject matter.
"(3) Over all transactions In commerce In margarine or oleomargarine and over retail sales of meat, meat
food products, livestock products In unmanufactured form, and poultry products.
“(c) The Federal Trade Commission shall have no power or Jurisdiction over any matter which by this
Act is made subject to the jurisdiction of the Secretary, except as provided in subsection (b) of this section."
*
*
*
*
*
*
*
The same Public Law also amended subsection 6 of sec. 5 (a) of the Federal Trade Commission Act (15
U.S.C. 45 (a) (6) and 38 Stat. 719) by substituting "persons, partnerships, or corporations Insofar as they are
subject to the Packers and Stockyards Act, 1921, as amended, except as provided In sec. 406(b) of said act"
for "persons, partnerships, or corporations subject to the Packers and Stockyards Act, 1921, except as
provided In see. 406(b) of said act."
77

section.8 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 in 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 days9 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 transmitted by the clerk
of the court to the Commission, and thereupon the Commission shall file In the court the record in the
proceeding, as provided In section 2112 of title 28, United States Code. Upon such filing of the petition the
court shall have jurisdiction of the proceeding and of the question determined therein concurrently with the
Commission until the filing of the record and shall have power to make and enter 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.10 The findings of the Commission, as to the facts,
if supported by evidence, shah 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 terms 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 be 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 same shah be
subject to review by the Supreme Court upon certiorari, as provided in section 240 of the Judicial Code.
(d) Upon the filing of the record with it the jurisdiction of the court of appeals of the United States to
affirm, enforce, modify, or set aside orders of the Commission shall be exclusive.11
________________
8

This sentence was amended by Public Law 85-791, 85th Cong., H.R. 6788, approved August 28 ' 1958, 72 Stat.

942.
9

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 the enactment of this Act, as amended by this Act, shall begin on the date of the enactment of this Act."
10
The above two sentences were also amended by Public Law 85-791.
11
The above section was also amended by Public Law 85-791.

78

(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 a
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 (e) 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 of 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
79

denied, or (3) the decision of the court has been affirmed by the Supreme Court, then the order of the
Commission rendered upon such rehearing. shall become final in the same manner as though no prior order
of the Commission had 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 of 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 a separate
offense.12
SEC. 6. That the commission shall also have power—13
(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 filing 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 defendent 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
_____________
12

Foregoing sentence added by subsection (c) of Sec. 4, Public No. 459, 81st Congress. (See footnote 1.)
Public, No. 78, 73d Cong., approved June 16, 1933, making appropriations for the fiscal year ending June 30,
1934, for the "Executive Office and sundry independent executive bureaus, boards, commissions," etc., made the
appropriation for the Commission contingent upon the provision (48 Stat. 291 ; 15 U.S.C.A., see. 46a) that "hereafter
no new investigations shall be initiated by the Commission as the results of a legislative resolution, except the same be
a concurrent resolution of the two Houses of Congress."
13

80

to be violating the antitrust Acts in order that the corporation may thereafter 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
for 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 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
81

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 same 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 willfully 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 fall 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 default, the corporation shall forfeit to the United States the sum of $100 for each
82

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 15.
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 showing a temporary injunction 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 newspaper, 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
83

(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 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. 14.14 (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 or 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 both 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 time 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 false advertisement, unless
he has refused, an the request of the Commission, to furnish the Commission the name and post-office
address of the manufacturer, packer, distributor, 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 purposes 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 falls to reveal facts material in the light of such representation 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 representation of material fact, and includes, or is accompanied in each instance
by truthful disclosure of, the formula showing quantitatively each ingredient of such drug.
_______________
14
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"
84

(2) 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.15
(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 man or 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 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 rubbed, 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 article; except that such term shall not include soap.
(f) 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 known 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.16
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
person, partnership, corporation, or circumstance, shall not be affected thereby.
SEC. 18. This Act may be cited as the "Federal Trade Commission Act."
Original approved September 26,1914.
Amended and approved March 21,1938.17
__________________
15

Subsection (a) of sec. 4 of Public No. 459, 81st Congress (see footnote 1), amended sec. 15 of this Act by
inserting "(1)" after the letter "(a)" in subsection (a) above, and by adding at the end of such subsection new paragraph
(2), above set out.
16
Subsection (b) of sec. 4 of Public No. 459, 81st Congress (see footnote 1) further amended sec. 15 of this Act,
by adding at the end thereof the new subsection (f) as above set out.
17
See footnote. 1.

85

Packers and Stockyards Act
[Public Law 85-909, 85th Congress, H.R. 9020, September 2, 1958]
AN ACT To amend the Packers and Stockyards Act, 1921, as amended, and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of America in Congress
assembled, That the Packers and Stockyards Act, 1921, as amended (42 Stat. 159, as amended; 7 U.S.C. 181
and the following), is amended as follows:
(1) By amending section 202 by inserting after the word "unlawful" the words "with respect to
livestock, meats, meat food products, livestock products in unmanufactured form, poultry, or poultry
products".
(2) By amending section 406 by striking out subsection (b) and inserting in lieu thereof the
following:
“(b) The Federal Trade Commission shall have power and jurisdiction over any matter involving
meat, meat food products, livestock products in unmanufactured form, or poultry products, which by this
Act is made subject to the power or jurisdiction of the Secretary, as follows:
“(l) When the Secretary in the exercise of his duties requests of the Commission that it make
investigations and reports in any case.
“(2) In any investigation of, or proceeding for the prevention of, an alleged violation of any Act
administered by the Commission, arising out of acts or transactions involving meat, meat food
products, livestock products in unmanufactured form, or poultry products, if the Commission
determines that effective exercise of its power or jurisdiction with respect to retail sales of any such
commodities is or will be impaired by the absence of power or jurisdiction over all acts or
transactions involving such commodities in such investigation or proceeding. In order to avoid
unnecessary duplication of effort by the Government and burdens upon the industry, the
Commissioner shall notify the Secretary of such determination, the reasons therefor, and the acts or
transactions involved, and shall not exercise power or jurisdiction with regard to acts or transactions
(other than retail sales) involving such commodities if the Secretary within ten days from the date
of receipt of the notice notifies the Commission that there is pending in his Department an
investigation of, or proceeding for the prevention of, an alleged violation of this Act involving the
same subject matter.
(3) Over all transactions in commerce in margarine or oleomargarine and over retail sales of
meat, meat food products, livestock products in unmanufactured form, and poultry products.
(c) The Federal Trade Commission shall have no power or jurisdiction over any matter which by
this Act is made subject to the jurisdiction of the Secretary, except as provided in subsection (b) of this
section.
" (d) The Secretary of Agriculture shall exercise power or jurisdiction over oleomargarine or retail
sales of meat, meat food products, ]livestock products in unmanufactured form, or poultry- products only
when he determines, in any investigation of, or any proceeding for the prevention of, an alleged violation
of this Act, that such action is necessary to avoid impairment of his power or jurisdiction over acts or
transactions involving livestock, meat, meat food products, livestock products in unmanufactured form,
poultry or poultry products, other than retail sales thereof. In order to avoid unnecessary duplication of
effort by the Government and burdens upon the industry, the Secretary shall notify the Federal
86

Trade Commission of such determination, the reasons therefor, and the acts or transactions involved, and
shall not exercise power or Jurisdiction with respect to acts or transactions involving oleomargarine or
retail sales of meat, meat food products, livestock products in unmanufactured form, or poultry products
if the Commission within ten days from the date of receipt of such notice notifies the Secretary that there
is pending in the Commission an investigation of, or proceeding for the prevention of, an alleged
violation of any Act administered by the Commission involving the same subject matter.
(e) The Secretary of Agriculture and the Federal Trade Commission shall include in their respective
annual reports information with respect to the administration of subsections (b) and (d) of this section."
SEC. 2. Said Act is further amended(1) by striking out the words "at a stockyard" from sections 301 (c) and 301 (d)
(2) by striking out the last sentence of section 302 (a) : Provided, However, That nothing herein
shall be deemed a definition of the term "public stockyards" as used in section 15(5) of the Interstate
Commerce Act;
(3) by inserting after the first sentence in section 303 the following sentence: "Every other
person operating as a market agency or dealer as defined in section 301 of the Act may be required
to register in such manner as the Secretary may prescribe.";
(4) by amending section 311 by striking out the words "stockyard owner or market agency"
wherever they occur and inserting "stockyard owner, market agency, or dealer" and by striking out
"stockyard owners or market agencies" and inserting "stockyard owners, market agencies, or
dealers";
(5) by striking out the words "at a stockyard" from section 312 (a).
SEC. 3. Subsection 6 of section 5 (a) of the Federal Trade Commission Act (15 U.S.C. 45 (a) (6)) is
amended by striking out "persons, partnerships or corporations subject to the Packers and Stockyards Act,
1921, except as provided in section 406 (b) of said Act", and substituting therefor the following: "persons,
partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as
amended, except as provided in section 406(b) of said Act".
SEC. 4. Section 407 of the Packers and Stockyards Act, 1921, as amended, is amended (1) by inserting
“(a)” immediately after "Sec. 407." and (2) by adding at the end thereof the following new subsection:
“(b) The Secretary shall maintain within the Department of Agriculture a separate enforcement unit to
administer and enforce title III of this Act."
Approved September 2, 1958.

Clayton Act
[Public-No. 212-63d Congress, As Amended by Public-No. 692-74th Congress1 and Public-No. 899-81st
Congress and Public Law 86—107, 86th Congress]
[H.R. 15657]
An Act To supplement existing laws against unlawful restraints and monopolies, and for other purposes
SEC. 1. DEFINITIONS. (38 Stat 730; 15 U.S.C.A., sec. 12.)
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, in_______________
1

The Robinson-Patman Act (see footnote 2). See also footnotes 5 and 1 3 with respect to the repeal of Section
9, Section 17 in part, Section 18 and 19, and Sections 21-25, inclusive, by two acts of June 25, 1948, namely, C. 645
(62 Stat. 683) and C. 646 (62 Stat. 896); and footnotes concerning the amendment of Sections 7 and 11 by act of Dec.
29, 1950, C. 1184 (64 Stat. 1125).

87

cludes 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 section seventythree 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
or foreign nation, or between any insular possessions or other places under the jurisdiction of the United
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" wherever used 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. DISCRIMINATING IN PRICE, SERVICE, OR FACILITIES.2 (49 Stat. 1526; 15 U.S.C.A., sec. 13,
as amended.)
SEC. 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 use, consumption, 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, 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 grants 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
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
__________________
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 said 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 from its trading
operations, in proportion to their purchases or 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.''

88

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 prevent persons engaged in selling
goods, wares, or merchandise in commerce from selecting their own customers in bona fide 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 or 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 or 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 fact 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 is 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.
625514—62—7

89

SEC. 3. TYING OR EXCLUSIVE LEASES, SALES, OR CONTRACTS. (38 Stat. 731; 15 U.S.C.A., sec.
14.)
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, consumption 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 purchaser thereof shall not use or deal in the goods,
wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor
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.
SEC. 4. VIOLATION OF ANTITRUST LAWS-DAMAGES. (38 Stat. 731; U.S.C.A., sec. 15.)
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 is 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. 4A.3 Whenever the United States is hereafter injured in its business or property by reason of
anything forbidden in the antitrust laws it may sue therefor in the United States district court for the district
in which the defendent resides or is found or has an agent, without respect to the amount in controversy, and
shall recover actual damages by it sustained and cost of suit.
SEC. 4B. Any action to enforce any cause of action under sections 4 or 4A shall be forever barred unless
commenced within four years after the cause of action accrued. No cause of action barred under existing law
on the effective date of' this Act shall be revived by this Act.
SEC. 5. PROCEEDINGS BY OR IN BEHALF OF UNITED STATES UNDER ANTITRUST LAWS.
FINAL JUDGMENTS OR DECREES THEREIN AS EVIDENCE IN PRIVATE LITIGATION.
INSTITUTION THEREOF AS SUSPENDING STATUTE OF LIMITATIONS. (38 Stat. 731;
15 U.S.C.A., sec. 16.)
SEC. 5. (a) A final judgment or decree heretofore or hereafter rendered in any civil or criminal
proceeding 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 action or proceeding
brought by any other party against such defendant under said laws or by the United States under section 4A,
as to all matters respecting which said judgment or decree would be an estoppel as between the parties
thereto: Provided, That this section shall not apply to consent judgments or decrees entered before any
testimony has been taken or to judgments or decrees entered in actions under Section 4A.
(b) Whenever any civil or criminal proceeding is instituted by the United States to prevent, restrain, or
punish violations of any of the antitrust laws, but not including an action under section 4A, the running of
the statute of limitations in respect of every section 4A, the running of the statute of limitations in respect
___________________
3
Sec. 4A, 4B, 5 (a) and 5 (b) were added by Pub. Law 137, approved July 7, 1955, 69 Stat. 282, 283.
90

of every private right of action arising under said laws and based in whole or in part on any matter
complained of in said proceeding shall be suspended during the pendency thereof and for one year thereafter:
Provided, however, That whenever the running of the statute of limitations in respect of a cause of action
arising under section 4 is suspended hereunder, any action to enforce such cause of action shall be forever
barred unless commenced either within the period of suspension or within four years after the cause of action
accrued.
SEC. 6. LABOR OF HUMAN BEINGS NOT A COMMODITY OR ARTICLE OF COMMERCE. (38 Stat.
731; 15 U.S.C.A., see. 17.)
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 horticultural 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. ACQUISITION BY CORPORATION OF STOCK OR OTHER SHARE CAPITAL OF OTHER
CORPORATION OR CORPORATIONS. (38 Stat. 731; 15 U.S.C.A., sec. 18.)
4
SEC. 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 bring 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 acquiring and owning all or
any part of the stock of a branch or short line
__________________
4
This section, and also section 11, which amend the respective sections of the Clayton Act, were
enacted by Act of Dec. 29, 1950 (P.L. 899; 64 Stat. 1125; 15 U.S.C. 18).
91

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 of
the acquisition of stock or otherwise of any other common carrier where these 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. INTERLOCKING DIRECTORS, OFFICERS, OR EMPLOYEES OF BANKS AND DIRECTORS
OF OTHER CORPORATIONS. (38 Stat. 732 (as amended by 48 Stat. 718) ; 15 U.S.C.A., sec.
19.)
SEC. 8. No private banker or director, officer, or employe 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.
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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 there, 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 $1000,000, 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 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. WILLFUL MISAPPLICATION, EMBEZZLEMENT, ETC., OF MONEYS, FUNDS, ETC., OF
COMMON CARRIER A FELONY. (38 Stat. 733; 18 U.S.C.A., sec. 412.)
SEC. 9.5 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 and knowingly converts the same to his own use or to 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 States under the laws thereof; and a judgment of conviction or acquittal on the merits under the laws
of any State shall e a bar to any prosecution hereunder for the same act or acts.
________________
5
Repealed by Act of June 25, 1948, c. 645 (62 Stat. 683), which revised, codified, and acted 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., See- 660 (62 Stat 730).
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SEC. 10. LIMITATIONS UPON DEALINGS AND CONTRACTS OF COMMON CARRIERS, WHOSE
INTERLOCKING DIRECTORS, ETC. (38 Stat. 734; 15 U.S.C.A., sec. 20.)
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 Commerce 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
SEC. 11. JURISDICTION TO ENFORCE COMPLIANCE, COMPLAINTS, FINDINGS, AND ORDERS.
APPEALS, SERVICE. (38 Stat. 734; 15 U.S.C.A., sec. 21)
Sec. 11(a)6 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 1038; in the Federal Reserve Board where applicable to
________________
6
This section, and also section 7, which amend the respective sections of the Clayton Act, were
enacted by Act of Dec. 29, 1950. (P.L. 899; 64 Stat. 1125; 15 U.S.C. 21.)
94

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:
(b) 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 8 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 time so fixed
and show 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 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 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 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 record in the proceeding
has been filed in a court of appeals of the United States, as hereinafter provided, the Commission or Board
may at any time, upon 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 or Board 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 or Board 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 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 court of appeals of the United States, in the manner provided in subsection (c) of this section.7
(c) Any person required by such order of the commission or board to cease and desist from any such
violation may obtain a review of such order in the court of appeals of the United States for any circuit within
which such violation
________________
7
Parts of paragraphs two, three, four and five of this section were amended by Public Law 85-791,
85th Cong., H.R. 6788, approved August 28, 1958, 72 Stat. 943.
The first and second paragraphs of this section were redesignated as subsections (a) and (b), the last
sentence of subsection (b) was amended, and the third, fourth, fifth, sixth and seventh paragraphs were
amended by public Law 86-107, 86th Cong., S. 726, approved July 23, 1959, 73 Stat. 243-246.
The amendments so made do not apply to any proceeding initiated before the date of ,enactment of that
Act under the third or fourth paragraph of section II. Each such proceeding continues to be governed by the
provisions of such section as they existed on the day preceding the date of enactment of Public Law 86-107.
95

occurred or within which such person resides or carries on business, by filing in the court, within sixty days
after the date of the service of such order, a written petition praying that the order of the commission or board
be set aside. A copy of such petition shall be forthwith transmitted by the clerk of the court to the
commission or board, and thereupon the commission or board shall file in the court the record in the
proceeding, as provided in section 2112 of title 28, United States Code. Upon such filing of the petition the
court shall have jurisdiction of the proceeding and of the question determined therein concurrently with the
commission or board until the filing of the record, and shall have power to make and enter a decree affirming,
modifying, or setting aside the order of the commission or board, 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 or
board as to the facts, if supported by substantial evidence, shall be conclusive. To the extent that the order
of the commission or board is affirmed, the court shall issue its own order commanding obedience to the
terms of such order of the commission or board. 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 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 as to the court
may seem 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 shall file such modified or new findings, which, if
supported by substantial 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 same shall be subject to review by the Supreme Court upon
certiorari, as provided in section 1254 of title 28 of the United States Code.
(d) Upon the filing of the record with it the jurisdiction of the court of appeals to affirm, enforce, modify,
or set aside orders of the commission or board shall be exclusive.
(e) Such proceedings in the 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 board or judgment of the court to
enforce the same shall in anywise relieve or absolve any person from any liability under the antitrust laws.
(f) 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 (1) 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 (2),by leaving a copy thereof at the residence or the
principal office or place of business of such person; or (3) by mailing by registered or certified mail a copy
thereof addressed to such person 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 mailed
by registered or certified mail as aforesaid shall be proof of the service of the same.
(g) Any order issued under subsection (b) 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 or
96

board may thereafter modify or set aside its order to the extent provided in the last sentence of subsection
(b) ; or
(2) upon the expiration of the time allowed for filing a petition for certiorari, if the order of the
commission or board has been affirmed, or the petition for review has been dismissed by the 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 or board has been affirmed
or the petition for review has been dismissed by the 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 or board be affirmed or the petition for review be
dismissed.
(h) If the Supreme Court directs that the order of the commission or board be modified or set aside, the
order of the commission or board 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 correct ed to accord with the mandate, in which
event the order of the commission or board shall become final when so corrected.
(i) If the order of the commission or board is modified or set aside by the 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 or board rendered in accordance with the mandate of the
court of appeals shall become final on the expiration of thirty days from the time such order of the
commission or board 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
or board shall become final when so corrected.
(j) If the Supreme Court orders a rehearing; or if the case is remanded by the court of appeals to the
commission or board 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 of the court has been affirmed by the Supreme Court, then the order of the commission or board
rendered upon such rehearing shall become final in the same manner as though no prior order of the
commission or board had 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 who violates any order issued by the commission or board under subsection (b) after
such order 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 any such order shall he
a separate offense, except that in the case of a violation through continuing failure or neglect to obey a final
order of the commission or board each day of continuance of such failure or neglect shall be deemed a
separate offense.
SEC. 12. PLACE OF PROCEEDING UNDER ANTITRUST LAWS. SERVICE OF PROCESS. (38 Stat.
736; 15 U.S.C.A., sec. 22.)
SEC. 12. That any suit, action, or proceeding under the antitrust laws against a corporation may be
brought not only in the judicial district whereof it is
97

an inhabitant, but also in any district wherein it may be found or transact, business; and all process in such
cases may be served in the district of which it is an inhabitant, or wherever it may be found.
SEC.13. SUBPOENAS FOR WITNESS IN PROCEEDINGS BY OR ON BEHALF OF THE UNITED
STATES UNDER ANTITRUST LAWS. (38 Stat. 736; 15 U.S.C.A., sec. 23.)
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. VIOLATION BY CORPORATION OF PENAL PROVISIONS OF ANTITRUST LAWS. (38 Stat.
736; 15 U.S.C.A., sec. 24.)
SEC. 14. That whenever a corporation shall violate any of the penal provisions of the antitrust laws,
such violation shall be deemed to be 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 $6,000 or by imprisonment for not
exceeding one year, or by both, in the discretion of the court.
SEC. 15. JURISDICTION OF UNITED STATES DISTRICT COURTS TO PREVENT AND RESTRAIN
VIOLATIONS OF THIS ACT. (38 Stat. 736; 15 U.S.C.A., sec. 25.)
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 may
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 he 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.
SEC 16. INJUNCTIVE RELIEF AGAINST THREATENED LOSS BY VIOLATION OF ANTITRUST
LAWS. (38 Stat. 737; 15 U.S.C.A., sec. 26.)
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,
98

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 bring 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. PRELIMINARY INJUNCTIONS, TEMPORARY RESTRAINING ORDERS. (38 Stat. 737; first
two paragraphs are 28 U.S.C.A., see. 381.)
SEC. 17.8 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 clearly 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 filed 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 take 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 NO RESTRAINING ORDER OR INTERLOCUTORY ORDER OF INJUNCTION WITHOUT
GIVING SECURITY. (38 Stat. 738; 28 U.S.C.A. sec. 382.)
SEC. 18.9 That, except as otherwise provided in section 16 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
_______________________
8
9

See second paragraph of footnote 13.
See second paragraph of footnote 13.

99

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. ORDERS OF INJUNCTION OR RESTRAINING ORDERS-REQUIREMENTS. (38 Stat. 738;
28 U.S.C.A., sec. 383.)
SEC. 19.10 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.RESTRAINING ORDERS OR INJUNCTIONS BETWEEN AN EMPLOYER AND EMPLOYEES,
EMPLOYERS AND EMPLOYEES, ETC., INVOLVING OR GROWING OUT OF TERMS OR
CONDITIONS OF EMPLOYMENT. (38 Stat. 738; 29 U.S.C.A., sec. 52.)
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 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. DISOBEDIENCE OF ANY LAWFUL WRIT, PROCESS, ETC., OF ANY UNITED STATES
DISTRICT COURT, OR ANY DISTRICT OF COLUMBIA COURT. (38 Stat. 738; 28
U.S.C.A., sec. 386.)
SEC. 21.11 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 thing 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.
10
11

100

Ibid.
See footnote 13.

SEC. 22. RULE TO SHOW CAUSE OR ARREST. TRIAL. PENALTIES. (38 Stat. 738; 28 U.S.C.A., sec.
387.)
SEC. 22.12 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 place fixed by the court: Provided, however, That if the accused,
being a natural person, fall 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 United 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 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.
_________________
12

Ibid.
101

SEC. 23. EVIDENCE, APPEALS. (38 Stat. 739; 28 U.S.C.A., sec. 388.)
SEC. 23.13 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 stayed, and the accused, if thereby
sentenced to imprisonment, shall be admitted to ball in any 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 CASES OF CONTEMPT NOT SPECIFICALLY EMBRACED IN SECTION 21 NOT
AFFECTED. (38 Stat. 739; 28 U.S.C.A., sec. 389.)
14
SEC. 24. 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.
SEE. 25. PROCEEDINGS FOR CONTEMPT LIMITATIONS. (38 Stat. 740; 28 U.S.C.A., sec. 390.)
SEC. 25.15 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. INVALIDING OF ANY CLAUSE, SENTENCE, ETC., NOT TO IMPAIR REMAINDER OF
ACT. (38 Stat. 740; 15 U.S.C.A., sec. 27.)
SEC. 26. If 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.*
________
15
Sections 21 to 25, inclusive, were repealed by Act of Tune 25, 1948, c- 645 (62 Stat. (%83), 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 65, Federal Rules of Civil Procedure, which covers the
substance of the matter involved.
14
A See footnote 13.
15
See footnote 13.
*Original act.
102

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 an to be dangerous when worn by individuals, and for other
purposes.
Be it enacted by the Senate and House 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.
(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 be 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, felted, 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 powers 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.
103

(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 lf 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 foot. wear covered by section
2 (d) of this Act, notwithstanding any exception contained in such Commercial Standard with respect to hats,
gloves, and footwear.
(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, flock, or other type of raised fiber surface when tested as described in said standard shall
be classified as class 1, normal flammability, when the time of flame spread is three and one-half seconds
or more, and as class 3, rapid and intense burning, when the time of flame spread is less than three and onehalf 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 means 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.
______________
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.

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(e) The Commission is authorized and directed to prescribe such rules and regulations as may be
necessary and proper for purposes of administration and enforcement of this Act.
(d) The Commission is authorized to(1) cause inspections, analyses, tests, and examinations to be made of any article of wearing
apparel or fabric which It has reason to believe falls within 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 enjoin 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 the 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 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 shall be disposed of
by destruction, by delivery to the owner or claimant thereof upon payment of court costs and fees and storage
and other proper 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.
625514—8
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PENALTIES
SEC. 7. Any person who willfully violates section 3 or 8 (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, affected the flammability of the
fabric or wearing apparel covered by the guaranty which he received. Such guaranty shall be either (:L) 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 be 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 be prohibited by the Commission from
participating 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 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.
EXCLUSIONS
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
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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 wearing 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.

Textile Fiber Products Identification Act
[Public Law 85-897, 85th Congress, H.R. 469, September 2, 1958]
AN ACT To protect producers and consumers against misbranding and false advertising of the fiber content
of textile fiber products, and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of America in Congress
assembled, That this Act may be cited as the "Textile Fiber Products Identification Act".
DEFINITIONS
SEC. 2. As used in the Act(a) The term "person" means an individual, partnership, corporation, association, or any other form of
business enterprise.
(b) The term "fiber" or "textile fiber" means a unit of matter which is capable of being spun into a yarn
or made into a fabric by bonding or by interlacing in a variety of methods including weaving, knitting,
braiding, felting, twisting, or webbing, and which is the basic structural element of textile products. (c) The
term "natural fiber" means any fiber that exists as such in the natural state.
(d) The term "manufactured fiber" means any fiber derived by a process of manufacture from any
substance which, at any point in the manufacturing process, is not a fiber.
(e) The term "yarn" means a strand of textile fiber in a form suitable for weaving, knitting, braiding,
felting, webbing, or otherwise fabricating into a fabric.
(f) The term "fabric" means any material woven, knitted, felted, or otherwise produced from, or in
combination with, any natural or manufactured fiber, yarn, or substitute therefor.
(g) The term "household textile articles" means articles of wearing apparel, costumes and accessories,
draperies, floor coverings, furnishings, beddings, and other textile goods of a type customarily used in a
household regardless of where used in fact.
(h) The term "textile fiber product" means—
(1) any fiber, whether in the finished or unfinished state, used or intended for use in household
textile articles;
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(2) any yarn or fabric, whether in the finished or unfinished state, used or intended for use in
household textile articles; and
(3) any household textile article made in whole or in part of yarn or fabric;
except that such term does not include a product required to be labeled under the Wool Products Labeling
Act of 1939.
(i) The term “affixed” means attached to the textile fiber product in any manner.
(j) The term "Commission" means the Federal Trade Commission.
(k) 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.
(1) The term "Territory" includes the insular possessions of the United States, and also any Territory
of the United States.
(m) The term "ultimate consumer" means a person who obtains a textile fiber product by purchase or
exchange with no intent to sell or exchange such textile fiber product in any form.
MISBRANDING AND FALSE ADVERTISING DECLARED UNLAWFUL
SEC. 3. (a) The introduction, delivery for introduction, manufacture for introduction, sale, advertising,
or offering for sale, in commerce, or the transportation or causing to be transported in commerce, or the
importation into the United States, of any textile fiber product which is misbranded or falsely or deceptively
advertised within the meaning of this Act or the rules and regulations promulgated thereunder, is 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, offering for sale, advertising, delivery, transportation, or causing to be transported, of any
textile fiber product which has been advertised or offered for sale in commerce, and which is misbranded
or falsely or deceptively advertised within the meaning of this Act or the rules and regulations promulgated
thereunder, is 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 sale, offering for sale., advertising, delivery, transportation, or causing ,to be transported, after
shipment in commerce, of any textile fiber product, whether in its original state or contained in other textile
fiber products, which is misbranded or falsely or deceptively advertised, within the meaning of this Act or
the rules and regulations promulgated thereunder, is 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.
(d) This section shall not apply
(1) to any common carrier or contract carrier or freight forwarder with respect to a textile fiber
product received, shipped, delivered, or handled by it for shipment in the ordinary course of its
business;
(2) to any processor or finisher in performing a contract for the account of a person subject to
the provisions of this Act if the processor or finisher does not change the textile fiber content of the
textile fiber product contrary to the terms of such contract;
(3) with respect to the manufacture, delivery for transportation, transportation, sale, or offering
for sale of a textile fiber product for exportation from the United States to any foreign country;
(4) to any publisher or other advertising agency or medium for the dissemination of advertising
or promotional material, except the manufacturer,
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distributor, or seller of the textile fiber product to which the false or deceptive advertisement relates,
if such publisher or other advertising agency or medium furnishes to the Commission, upon request,
the name and post office address of the manufacturer, distributor, seller, or other person residing in
the United States, who caused the dissemination of the advertising material; or
(5) to any textile fiber product until such product has been produced by the manufacturer or
processor in the form intended for sale or delivery to, or for use by, the ultimate consumer: Provided,
That this exemption shall apply only if such textile fiber product is covered by an invoice or other
paper relating to the marketing or handling of the textile fiber product and such invoice or paper
correctly discloses the information with respect to the textile fiber product which would otherwise
be required under section 4 of this Act to be on the stamp, tag, label, or other identification and the
name and address of the person issuing the invoice or paper.
MISBRANDING AND FALSE ADVERTISING OF TEXTILE FIBER PRODUCTS
SEC. 4. (a) Except as otherwise provided in this Act, a textile fiber product shall be misbranded if it is
falsely or deceptively stamped, tagged, labeled, invoiced, advertised, or otherwise identified as to the name
or amount of constituent fibers contained therein.
(b) Except as otherwise provided in this Act, a textile fiber product shall be misbranded if a stamp, tag,
label, or other means of Identification, or substitute therefor authorized by section 5, is not on or affixed to
the product showing in words and figures plainly legible, the following:
(1) The constituent fiber or combination of fibers in the textile fiber product, designating with equal
prominence each natural or manufactured fiber in the textile fiber product by its generic name in the order
of predominance by the weight thereof if the weight of such fiber is 5 per centum or more of the total fiber
weight of the product, but nothing in this section shall be construed as prohibiting the use of a nondeceptive
trademark in conjunction with a designated generic name: Provided, That exclusive of permissible
ornamentation, any fiber or group of fibers present in an amount of 5 per centum or less by weight of the total
fiber content shall not be designated by the generic name or the trademark of such fiber or fibers, but shall
be designated only as "other fiber" or "other fibers" as the case may be.
(2) The percentage of each fiber present, by weight, in the total fiber content of the textile fiber product,
exclusive of ornamentation not exceeding 5 per centum by weight of the total fiber content:'Provided, That,
exclusive of permissible ornamentation, any fiber or group of fibers present in an amount of 5 per centum
or less by weight of the total fiber content shall not be designated by the generic name or trademark of such
fiber or fibers, but shall be designated only as "other fiber" or "other fibers" as the case may be: Provided
further, That in the case of a textile fiber product which contains more than one kind of fiber, deviation in
the fiber content of any fiber in such product from the amount stated on the stamp, tag, label, or other
Identification shall not be a misbranding under this section unless such deviation is in excess of reasonable
tolerances which shall be established by the Commission: And provided further, That any such deviation
which exceeds said tolerances shall not be a misbranding if the person charged proves that the deviation
resulted from unavoidable variations in manufacture and despite due care to make accurate the statements
on the tag, stamp, label, or other identification.
(3) The name, or other Identification issued and registered by the Commission, of the manufacturer of
the product or one or more persons subject to section 3 with respect to such product.
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(4) if it is an imported textile fiber product the name of the country where processed or manufactured.
(c) For the purposes of this Act, a textile fiber product shall be considered to, be falsely or deceptively
advertised if any disclosure or implication of fiber content is made in any written advertisement which is
used to aid, promote, or assist directly or indirectly in the sale or offering for sale of such textile fiber
product, unless the same information as that required to be shown on the stamp, tag, label, or other
identification under section 4(b) (1) and (2) is contained in the heading, body, or other part of such written
advertisement, except that the percentages of the fiber present in the textile fiber product need not be stated.
(d) In addition to the information required in this section, the stamp, tag, label, or other means of
identication, or advertisement may contain other information not violating the provisions of this Act.
(e) This section shall not be construed as requiring the affixing of a stamp, tag, label, or other means of
identification to each textile fiber product contained in a package if (1) such textile fiber products are
intended for sale to the ultimate consumer in such package (2) such package has affixed to it a stamp, tag,
label, or other means of Identification bearing, with respect to the textile fiber products contained therein,
the information required by subsection (b), and (3) the information on the stamp, tag, label, or other means
of identification affixed to such package is equally applicable with respect to each textile fiber product
contained therein.
(f) This section shall not be construed as requiring designation of the fiber content of any portion of
fabric, when sold at retail, which is severed from bolts, pieces, or rolls of fabric labeled in accordance with
the provisions of this section. at the time of such sale: Provided, That if any portion of fabric severed from
a bolt, piece, or roll of fabric is in any manner represented as containing percentages of natural or
manufactured fibers, other than that which is set forth. on the labeled bolt, piece, or roll, this section shall
be applicable thereto, and the information required shall be separately set forth and segregated as required
by this section.
(g) For the purposes of this Act, a textile fiber product shall be considered to. be falsely or deceptively
advertised if the name or symbol of any fur-bearing animal is used in the advertisement of such product
unless such product, or the part thereof in connection with which the name or symbol of a fur-bearing animal
is used, is a fur or fur product within the meaning of the Fur Products Labeling Act: Provided, however, That
where a textile fiber product contains the hair or fiber of a fur-bearing animal, the name of such animal, in
conjunction with the word "fiber", "hair", or "blend", may be used.
(h) For the purposes of this Act, a textile fiber product shall be misbranded if it is used as stuffing in any
upholstered product, mattress, or cushion after having been previously used as stuffing in any other
upholstered product, mattress, or cushion, unless the upholstered product, mattress, or cushion containing
such textile fiber product bears a stamp, tag, or label approved by the Commission indicating in words plainly
legible that it contains reused stuffing.
REMOVAL OF STAMP, TAG, LABEL, OR OTHER IDENTIFICATION
SEC. 5. (a) After shipment of a textile fiber product in commerce it shall be unlawful, except as provided
in this Act, to remove or mutilate, or cause or participate in the removal or mutilation of, prior to the time
any textile fiber product is sold and delivered to the ultimate consumer, any stamp, tag, label, or other
Identification required by this Act to be affixed to such textile fiber product, and any person violating this
section shall be guilty of an unfair method of competition, and an unfair or deceptive act or practice, under
the Federal Trade Commission Act.
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(b) Any person(1) introducing, selling, advertising, or offering for sale, in commerce, or Importing into the
United States, a textile fiber product subject to the provisions of this Act, or
(2) selling, advertising, or offering for sale a textile fiber product whether in its original state
or contained in other textile fiber products, which has been shipped, advertised, or offered for sale,
in commerce.
may substitute for the stamp, tag, label, or other means of identification required to be affixed to such textile
product pursuant to section 4 (b), a stamp, tag, label, or other means of identification conforming to the
requirements of section 4(b), and such substituted stamp, tag, label, or other means of identification shall
show the name or other identification issued and registered by the Commission of the person making the
substitution.
(c) If any person other than the ultimate consumer breaks a package which bears a stamp, tag, label, or
other means of identification conforming to the requirements of section 4, and if such package contains one
or more units of a textile fiber product to which a stamp, tag, label, or other identification conforming to the
requirements of section 4 is not affixed, such person shall affix a stamp, tag, label, or other identification
bearing the information on the stamp, tag, label, or other means of identification attached to such broken
package to each unit of textile fiber product taken from such broken package.
RECORDS
SEC. 6. (a) Every manufacturer of textile fiber products subject to this Act shall maintain proper records
showing the fiber content as required by this Act of all such products made by him, and shall preserve such
records for at least three years.
(b) Any person substituting a stamp, tag, label, or other identification pursuant to section 5(b) shall keep
such records as will show the information set forth on the stamp, tag, label, or other identification that he
removed and the name or names of the person or persons from whom such textile fiber product was received,
and shall preserve such records for at least three years.
(e) The neglect or refusal to maintain or preserve the records required by this section is unlawful, and
any person neglecting or refusing to maintain such records shall be guilty of an unfair method of competition,
and an unfair or deceptive act or practice, in commerce, under the Federal Trade Commission Act.
ENFORCEMENT OF THE ACT
SEC. 7. (a) Except as otherwise specifically provided herein, this Act shall be enforced by the Federal
Trade Commission under rules, regulations, and procedure provided for in the Federal Trade Commission
Act.
(b) The Commission is authorized and directed to prevent any person from violating the provisions of
this Act in the same manner, by the same means, 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 the provisions of this Act shall be subject to the penalties
and entitled to the privileges and Immunities provided in said Federal Trade Commission Act, in the same
manner, by the same means, and with the same jurisdiction, powers, and duties 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 make such rules and regulations, including the
establishment of generic names of manufactured fibers, under and in pursuance of the terms of this Act as
may be necessary and proper for administration and enforcement
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(d) The Commission is authorized to cause inspections, analyses, tests, and examinations to be made of
any product subject to this Act.
INJUNCTION PROCEEDINGS
SEC. 8. Whenever the Commission has reason to believe—
(a) that any person is doing, or is about to do, an act which by section 3, 5, 6, 9, or 10 (b) is
declared to be unlawful; and
(b) that it would be to the public interest to enjoin the doing of such act until complaint is issued
by the Commission under the Federal Trade Commission Act and such complaint is dismissed by
the Commission or set aside by the court on review or until an order to cease and desist made thereon
by the Commission has become final within the meaning of the Federal Trade Commission Act,
the Commission may bring suit in the district court of the United 'States or in the United States court of any
Territory, for the district or Territory in which such person resides or transacts business, to enjoin the doing
of such act and upon proper showing a temporary injunction or restraining order shall be granted without
bond.
EXCLUSION OF MISBRANDED TEXTILE FIBER PRODUCTS
SEC. 9. All textile fiber products imported into the United States shall be stamped, tagged, labeled, or
otherwise identified in accordance with the provisions of section 4 of this Act, and all invoices of such
products required pursuant to section 484 of the Tariff Act of 1930, shall set forth, in addition to the matter
therein specified, the information with respect to said products required under the provisions of section 4(b)
of this Act, which information shall be in the invoices prior to their certification, if such certification is
required pursuant to section 484 of the Tariff Act of 1930. The falsification of, or failure to set forth the
required information in such invoices, or the falsification or perjury of the consignee's declaration provided
for in section 485 of the Tariff Act of 1930, insofar as it relates to such information, is 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; and any person who falsifies, or perjures the consignee's declaration insofar
as it relates to such information, may thenceforth be prohibited by the Commission from Importing, or
participating in the importation of, any textile fiber product into the United States 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. A verified statement from the manufacturer
or producer of such products showing their fiber content as required under the provisions of this Act may
be required under regulation prescribed by the Secretary of the Treasury.
GUARANTY
SEC. 10. (a) No person shall be guilty of an unlawful act under section 3 ff he establishes a guaranty
received in good faith, signed by and containing the name and address of the person residing in the United
States by whom the textile fiber product guaranteed was manufactured or from whom it was received, that
said product is not misbranded or falsely invoiced under the provisions of this Act. Said guaranty shall be
(1) a separate guaranty specifically designating the textile fiber product guaranteed, in which case it may be
on the invoice or other paper relating to said product; or (2) a continuing guaranty given by seller to the buyer
applicable to all textile fiber products sold to or
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to be sold to buyer by seller in a form as the Commission, by rules and regulations, may prescribe; or (3) a
continuing guaranty filed with the Commission applicable to all textile fiber products handled by a guarantor
in such form as the Commission by rules and regulations may prescribe.
(b) The furnishing of a false guaranty, except where the person furnishing such false guaranty relies on
a guaranty to the same effect received in good faith signed by and containing the name and address of the
person residing in the United States by whom the product guaranteed was manufactured or from whom it was
received, is unlawful, and shall be an unfair method of competition, and an unfair and deceptive act or
practice, in commerce, within the meaning of the Federal Trade Commission Act.
CRIMINAL PENALTY
SEC. 11. (a) Any person who willfully does an act which by section 3, 5, 6, 9, or 1 0 (b) is declared to
be unlawful shall be guilty of a misdemeanor and upon conviction 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 in this
section shall limit any other provision of this Act.
(b) Whenever the Commission has reason to believe that any person is guilty of a misdemeanor under
this section, it may certify all pertinent facts to the Attorney General. If, on the basis of the facts certified,
the Attorney General concurs in such belief, it shall be his duty to cause appropriate proceedings to be
brought for the enforcement of the provisions of this section against such person.
EXEMPTIONS
SEC. 12. (a) None of the provisions of this Act shall be construed to apply to(1) upholstery stuffing, except as provided in section 4(h)
(2) outer coverings of furniture, mattresses, and box springs;
(3) linings or interlinings incorporated primarily for structural purposes and not for warmth;
(4) filling or padding incorporated primarily for structural purposes and not for warmth;
(5) stiffenings, trimmings, facings, or interfacings;
(6) backings of, and paddings or cushions to be used under, floor coverings;
(7) sewing and handicraft threads;
(8) bandages, surgical dressings, and other textile fiber products, the labeling of which is subject
to the requirements of the Federal Food, Drug and Cosmetic Act of 1938, as amended;
(9) waste materials not intended for use in a textile fiber product;
(10) textile fiber products incorporated in shoes or overshoes or similar outer footwear;
(11) textile fiber products incorporated in headwear, handbags, luggage, brushes, lampshades,
or toys, catamenial devices, adhesive tapes and adhesive sheets, cleaning cloths Impregnated with
chemicals, or diapers.
The exemption provided for any article by paragraph (3) or (4) of this subsection shall not be applicable if
any representation as to fiber content of such article is made in any advertisement, label, or other means of
Identification covered by section 4 of this Act.
(b) The Commission may exclude from the provisions of this Act other textile fiber products (1) which
have an insignificant or inconsequential textile fiber content, or (2) with respect to which the disclosure of
textile fiber content is not necessary for the protection of the ultimate consumer.
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SEPARABILITY CLAUSE
SEC. 13. If any provision of this Act, or the application thereof to any person, as that term is herein
defined, is held invalid, the remainder of the Act and the application of the remaining provisions to any
person shall not be affected thereby.
APPLICATION OF EXISTING LAWS
SEC. 14. 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 Act of the United States.
EFFECTIVE DATE
SEC. 15. This Act shall take effect eighteen months after enactment, except for the promulgation of rules
and regulations by the Commission, which shall be promulgated within nine months after the enactment of
this Act. The Commission shall provide for the exception of any textile fiber product acquired prior to the
effective date of this Act.
Approved September 2, 1958.
114

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 on 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. Proposed 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.).3—Pointing the way to a general Improvement in accounting practices,
the Commission, published Fundamentals of a Cost System for Manufacturers (H. Doc. 1356, 64th, 31 p.,
o. p., 7/l/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, o. p.), 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. 122), include approximately 870 separate investigations.
Documents out of print (designated "o. p.11) 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

115

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., o. p.) ; Part II, Fruits, Vegetables, and, Grapes, 906 p., 6/10/37,
o. p.; Part III, Supplementary Report, 154 p., 11/8/37; and interim reports of 12/26/35 (H. Doc. 380, 74th,
6 p.), and 2/l/37 (S. Doc. 17, 75th, 16 p., o. p.).]
Agricultural Prices.—See Price Deflation.
Antibiotics Manufacture (F. T. C).—Because of the rising Importance and the cost of antibiotic drugs,
and the lack of published information on their production, a Commission resolution of July 13, 1956,
authorized the study which appeared as Economic Report on Antibiotics Manufacture (361 p., 6/27/58). This
volume covered the origin and history of the industry, the companies manufacturing antibiotics, production
processes, marketing, prices, costs, profits, patents and trademarks, and public health aspects.
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., o. p., 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 sealed 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).
___________________
4

Conditions With Respect to the Sale and Distribution of Milk and Dairy Products (H. Doc. 94, 75th, 1/4/87),
p. 38; Report of the F. T. C. on Agricultural Income Inquiry, Part I (8/2/37), P. 26; Agricultural Implement and
Machinery Industry (H. Doc. 702, 75th, 6/6/89), p. 1038; The Present Trend of Corporate Mergers and Acquisitions
8/7/47) ; The Merger Movement: A Summary Report (1948) : and P. T. C. Annual Reports: 1938, pp. 19 and 29: 1939,
p 14; 1940, p. 12: 1941, p. 19; 1942, p. 9; 1943. 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 Pilling."

116

Chain Stores (Senate).— Practically every phase of chain-store operation was covered (S. Res. 224,
70th, 5/5/28), 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
in selected cities. (For subtitles of 33 reports published under the general title, Chain Stores, 1931-33, see
F. T. C. Annual Report, 1941, p. 201.)
In 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." 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. (Reportof the P. T. C. on the Cigarette Shortage, 33 pages, processed, o. p., 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 the
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 (1-1. Doc. 152, 65th, 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,
4:20 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/l/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 Reports 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.).
_______________
7

See footnote 4.

117

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—Monthly Reports on Cost of Production, 4/20/20 to 10/30/20, Nos. 1 to 6, and two quarterly reports
with revised costs, 8/25/20 and 12/6/20. processed, o. p.). An injunction to 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.
(523 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., 5/15/18), recommending legislation striking at this practice; Commercial Bribery (S.
Doc. unnumbered, 65th, 36 p., q. 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 46 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, 1947-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, an estimate of reserves available to major companies and an analysis of
effect of possible. shortage on big and small companies. The Control of Iron Ore, o. p. (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 & report, Cooperation in Foreign Countries (S.
Doc. 171, 68th, 202 p., o. p., 11/29/24),. recommending further development of cooperation in 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, o. p. 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,
118

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."
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 1948 the Commission published The Merger Movement: A Seminary 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 (H. Res. 439. 69th, 3/2/27), the
Commission reported evidence of cooperation among State association.4 but no indication that cottonseed
crushers or refineries had fixed prices in violation of the antitrust laws (Cottonseed Industry, H. Doe. 193,
70th. 87 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 and 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. 91, 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).
119

Distribution Cost Accounting (F. T. C.).—To provide a guide for current legislation and determine ways
for improving accounting methods, the Commission 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) o. p., 3/31/52.
Distribution Methods and Costs (F. T. C.).—This inquiry into methods and costs of distributing
important consumer commodities (F. T. 0. 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 Costs were transmitted to Congress and published under the subtitles: Part 1, 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 (1.3/2/44, 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., o. 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., o. p.). See also Commission 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.).—A 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 Com120

mission found that although some association activities were in restraint of trade, there were no substantial
antitrust violations (Report of the F. T. C. on Commercial Feeds, 206 p., o. p., 8/29/21.
Fertilizer (Senate),Begun by the Commissioner of Corporations8 (S. Res. 487, 62d, 3/l/13), this inquiry
disclosed extensive use of bogus 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 in 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 facts 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 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 20, 1914, upon passage of the Federal Trade Commission
Act, sec. 8 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 linen 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.
625514-62-9
121

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 o. p.) ; II. Terminal Grain Markets and Exchanges (9/15/20, 3,33 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 (9/15/120 347 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 Home Committee
on Agriculture, Future Trading, hearings, 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 Milling (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 Flour (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 loan,
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 finding 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).
122

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 were presented to Congress in a report on the Growth and Concentration in the Flour-Milling Industry
(6/2/47, 36 P.).
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, in a preliminary report, Profits 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 for 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-Marketing (F. T. C.).—On October 9, 1958, the Commission launched a study of significant
economic trends in food marketing. In the first phase of this investigation facts were developed concerning
the growth of corporate chains and voluntary and cooperative wholesalers. On June 30, 1959, the
Commission published a statistical report entitled Economic Inquiry into Food Marketing—Interim Report
(6 p., 22 tables, o. p.). This was followed by publication of Economic Inquiry into Food Marketing, Part 1,
Concentration and Integration in Retailing (January 1960, 338 p.).
Food-Wheat 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 Com123

mission 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 Products 1914-18 (6/6/21, 234 p., o. p.) showed 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 P. 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 Yew 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., 6/30/82).
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 was being practiced, a Commission investigation (S. Res. 133, 66th,
7/25/19) 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/l/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," but completed by the
F. T. C., this inquiry dealt with the cost of growing beets and the cost of beet-sugar manufacture (Report on
the Beet Sugar Industry in the U. S., H. Doc. 158, 65th, 164 p., o. p., 5/24/17).
_________________
11
See footnote 8.
124

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., 1/11/34; supplemental report, 111 p., o. p., processed, 6/27/38.
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), showed 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 Effects of Grain Exchange Actions Affecting Futures
Trading During the First Six Months of 1946 (85 p., o. 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 1943, for futures trading to be conducted in the
usual manner on the Chicago, Kansas City and Minneapolis grain exchanges under existing conditions of
Government price 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/l/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.
625514-62-10

125

Industrial Concentration and Product Diversification in the 1,000 Largest Manufacturing Companies:
1950 (F. T. C.).—This purely statistical report published in January 1957 has 127 pages of text which state
the findings in 52 text tables and 22 charts covering all manufacturing, food, electrical apparatus, and
transportation equipment, and 529 pages of appendix tables covering these and other manufacturing
industries. The 4 leading shippers of each product are identified, but shipments by individual companies are
not disclosed.
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,
o. p., 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 1924 until 1946.
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 in the electrical
equipment industry which exists in each of the important industrial nations.
International Petroleum Cartel.—A 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., o. 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 and agreements 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
International Steel Cartels (F. T. C.).—A 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 prices in the export trade, and established
reserved and unreserved areas. (International Steel Cartels (1948), 115 p., o. p., also 12 p. processed
summary.)
Iron Ore.—See Control of Iron Ore.
Large Manufacturing Companies (F. T. C.).—This 1951 report, entitled A 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., o. 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),
126

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
P. T. C. on Lumber Manufacturers' Trade Associations, incorporating regional reports of 1/10/21, 2/18/21,
6/9/21, and 2/15/22 (150 p., o. p.) ; Report of the F. T. C. and 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., 5/7/23).
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, 11/21/39, o. p.).
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 Selected 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 in dealer agreements and in certain manfacturers' 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 leading 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 $70,000,00.0,000
[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).
127

Packer Consent Decree.—See Food (President) Continued—Meat Packing. "Paper-Book (Senate),
Wartime, 1917-18.—This inquiry (S. Res. 269, 64th, 9/7/16) 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. 76, 65th, 125 p., o. p., 8/21/17)].
Paper—Newsprint (Senate), Wartime, 1917-18.—High prices of newsprint (S. Res. 177, 64th, 4/2/16)
were shown to have been partly a result of certain newsprint association activities in restraint of trade.
Department of Justice proceedings resulted in abolishment of the association and indictment of certain
manufacturer& 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 Newsprint Paper Investigation (in
response to S. Res. 95, 65th, 6/27/17; S. Doc. 61. 65th, 8 ., 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, 6/18/13 12 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/l/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 Competition (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 pipe____________
12

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

128

line companies which were unfair to small producers (Report on Pipe-Line Transportation of Petroleum, 467
p., o. p., 2/28/16), 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 F. T. C.
motion, in which report legislation to remedy existing conditions was recommended; and Report of the F.
T. C. on Panhandle, Crude Petroleum (Texas) (19 p., o. p., 2/3/28)—pursuant to F. T. C. motion, 10/6/26 (in
response to requests of producers of crude petroleum).
Potomac Electric Power Co. (Procurement Director, United States Treasury).—A study (2/29/44) of the
financial history and operations of this corporation for the years 1896-1943 was made at the request of the
Director of Procurement, 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 (S. Res. 329, 68th, 2/9/25) resulted in two reports, the first of
which, Electric Power Industry—Control of Power Companies (S. Doc. 213, 69th, 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, 11/8/29) 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/l/34; and F. T. C. Act, See. 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, o. p.) comprised 95 volumes.14
_____________
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 Report, 1941, p. 221 ; and for lists of companies investigated, see F. T. C. Annual Reports,
1935, p. 21, and 1936, p. 36.

129

Price Bases (F. T. C.).—More than 3,500 manufacturers representing practically every industrial segment
furnished data for this study (F. T. C. 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 method15 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 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 Deflation (President).—To an inquiry (3/21/21) of President Harding, the Commission made
prompt reply (undated) presenting its views of the causes of a disproportional decline of agricultural prices
compared with consumers' 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 Report for Manufacturing Corporations.—Since 1947, the Federal Trade
Commission has summarized for each calendar quarter uniform, confidential financial statements collected
from a probability sample of all enterprises classified as manufacturers, except newspapers, which are
required to file U. S. Corporation Income Tax Form 1120. The quarterly summaries, entitled Quarterly
Financial Report for Manufacturing Corporations, are published by the Government Printing Office and sold
by the Superintendent of Documents. In the published summaries, profits per dollar of sales and rates of
profit on stockholders' equity are shown each quarter for each of 60 industry and size groups of
manufacturing corporations. Also shown each quarter are 45 income statement and balance sheet items, and
as many financial and operating ratios, for each of 45 industry and size groups of corporate manufacturers.
(Similar reports for retail trade and wholesale trade corporations were published for the year 1950 and for
each quarter of 1951 and 1952.)
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 1927 and the succeeding Federal Communications Act of 1934. The investigation was
followed by Commission and Department of Justice proceedings on monopoly charges which culminated
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 pre-war (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 1947-56, includes 25
selected manufacturing industries.
_______________
15

Basing-point systems are also discussed in the published reports listed under "Cement," "Steel Code," and "Steel
Sheet Piling" herein.

130

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 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, H. 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 nonprice-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 New York stock
or curb exchanges. The Report of the F. T C. on Compensation of Officers and Directors of Certain
Corporations (15 p., processed, 2/26/34, o. p.) 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 5/12/22) 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 system 18 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
________________
16

The salary lists do not appear in the report but are available for inspection.
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 basing-point system is also discussed
in published reports listed under "Cement" and "Price Bases" herein.
18
See footnote 15.
17

131

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 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), o. p., 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/l/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 1988
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 1985,
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, 6&h, 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
132

on New 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 the World War, 1917-18, 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. 329, 2/9/25) 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 (S. 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, S.
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, May 24-29, 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), 1917-184—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.19
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 (94 p., o. p., 5/l/22) ; and Report of the F. T. C. on
Wartime Profits and Costs of the Steel Industry (138 p., o. p., 2/18/25). 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 and 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 billions of dollars by checking unjustifiable price advances.
________________
19

See footnote 10.
Approximately 260 of the wartime cost inquiries are listed in the F. T. C. Annual Reports, 1918, pp. 29-30, and
1919, pp. 88-42, and in World War Activities of the F. T. C., 1917-18 (69 p., processed, 7/15/40).
20

133

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 106 p. appendix). Compilation of the information
contained in the report was began by the Office of Price Administration prior to the transfer of the financial
reporting function 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-Newsprint, Profiteering, and
Textiles—Woolen Rag Trade, o. p.

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-1-d, M-1-c, and M-1-f.
Antifreeze Solutions, Manufacturers of (W. P. B.), Wartime, 1943-44.—War Production Board Order
L-258 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 (W. 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 bad been improperly related to secure capital equipment or whether orders that had been
related had been extended for the purpose of obtaining capital equipment in violation of priorities
regulations.
Chromium Processors (W. P. B.), Wartime, 1942-43.—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 was conducted concurrently with a survey of nickel processors.
Commercial Cooking and Food and Plate Warming Equipment, Manufacturers of (W. P. 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 plants
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
134

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.
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 mixed 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.
135

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 industry so as to eliminate the need for a wheat subsidy, without reducing farmers' returns, or to reduce
bread prices. The report was made to 0. 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 shippers, 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 (NV. P. B.), Wartime, 1943-44.—The Commission made a Nation-wide
survey for 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 67 representative
furniture companies were studied to determine whether, and to what extent, price increases were justified.
A 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 L131 and M-9--c.
Jewel Bearings, Consumers of (W. P. B.), Wartime, 1942-43.—For 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 ma136

chines, 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 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 (0. P. A.), Wartime, 1941-42.—Costs, profits, and other financial data regarding operations
of 68 paperboard mills (0. P. A. request, 11/12/41), for use in connection with price stabilization work, were
transmitted to 0. 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, 194145.—Pursuant to Executive orders (January 1942), 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 deter137

mine 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 compiled with the
copper orders, that is, W. P. B. General Preference Order No. M-9-a, Supplemental Order No. M-9-b, and
Conservation Order m-9-c, 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, 1942-43.—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, 1941-42.—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 in 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 dis138

tributing important commodities. The 19-11-45 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.
139
U.S. GOVERNMENT PRINTING OFFICE: 1962