ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION FOR THE FISCAL YEAR ENDED JUNE 30, 1925

INTRODUCTION

To the Senate and House of Representatives:

Pursuant to statute the Federal Trade Commission herewith submits to the Congress its annual report for the fiscal year July 1, 1924, to June 30, 1925. The commission was created by an act of Congress approved September 26, 1914, and was organized March 16, 1915. The present is the eleventh annual report to Congress.

On June 30, 1925, the commission consisted of Vernon W. Van Fleet, of Indiana, chairman; John F. Nugent, of Idaho, vice chairman; Charles W. Hunt, of Iowa; Huston Thompson, of Colorado; and William E. Humphrey, of Washington.

CHANGES IN PROCEDURE AND POLICIES

On March 17 and April 30, 1925, the commission announced changes in its rules of procedure and policies (see p. 111).

LIMITATION ON CONGRESSIONAL INQUIRIES

The act making appropriations for the Federal Trade Commission, approved March 3, 1925, contained the following provision:

That no part of this sum shall be expended for investigations requested by either House of Congress except those requested by concurrent resolution of Congress, but this limitation shall not apply to investigations and reports in connection with alleged violations of the antitrust acts by any corporation.

On July 1, 1925, when the appropriations became available for the year, there were before the commission five certain resolutions of the Senate directing investigations and reports with respect to, viz, (a) wealth, debt, and taxation (see p. 131); (b) bread and flour (see p. 112); (c) electric power and tobacco (see p. 112); (d) trade associations (see p. 114); and (e) cooperative organizations (see p. 114).

In view of the provisions of the appropriation act above quoted the commission, being in doubt as to its power to proceed with certain of the foregoing mentioned Senate resolutions, requested the President to ask the Attorney General of the United States for an opinion in the matter. Messrs. Nugent and Thompson dissented and addressed a separate letter to the President (see p. 117). The

commission's correspondence and the opinion of the Attorney General appear on page 112. The commission also requested an opinion from the Comptroller General of the United States. This correspondence and opinion appear on pages 128 and 129.

Work on the inquiry with respect to national wealth, debt, and taxation was definitely discontinued as of June 30, 1925, it being the unanimous opinion of the commission that this resolution was not authorized under the Federal Trade Commission act or the appropriation proviso.

Work with respect to the electric-power and tobacco inquiries was not discontinued but was carried forward in usual course, it being the unanimous view of the commission that this resolution was clearly authorized, except the second portion of the electric-power resolution relating to the expenditure of money to control the avenues of publicity on the question of public ownership. As to this portion the commission was of opinion that it was not authorized, and consequently no work was initiated with respect to it. Commissioners Nugent and Thompson dissented.

REPORT BY DIVISIONS OF WORK

The commission here reports its administration of the Federal Trade Commission act, approved September 26, 1914 (38 Stat. 717); delegated sections of the Clayton Act, approved October 15, 1914 (38 Stat. 730); and the export trade act, approved April 10, 1918 (40 Stat. 516). For the administration of these acts the commission has been organized into four major divisions, i. e., administrative, legal, economic, export trade, and the work of the year is reported under those captions in the order given.

ADMINISTRATIVE DIVISION

This division conducts the business affairs of the commission. It is made up of several units such as are usually found in Government establishments, the functions of the units being governed largely by general statutes. These units are personnel, fiscal affairs, publications, docket, mail and files, supplies, stenographic, and library.

The units are under the direct supervision of the assistant secretary of the commission. The character of work of each is indicated by its designation.

PERSONNEL

During the fiscal year there were several changes in the presidential membership of the commission. The term of office for which Mr. Nelson B. Gaskill was appointed expired September 25, 1924. He was given a recess appointment by the President, effective September 26, 1924, under which appointment he served until February 24, 1925. The vacancy was filled by the nomination by the President of Mr. William E. Humphrey, of Washington, January 26, 1925, who was confirmed by the Senate February 23, 1925 (calendar day), and took oath of office and entered upon duty February 25, 1925. His appointment is for the term expiring September 25, 1931. Mr. Vernon W. Van Fleet was elected chairman of the commission for the year beginning December 1, 1924, succeeding Mr. Huston Thompson. Mr. John F. Nugent was elected vice chairman for the same period.

On June 30, 1925, the total personnel of the Federal Trade Commission was 314, with a total salary of $857,500. Of these employees 175 were under civil service and 139 held excepted positions. Of

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the total personnel (314) 160 were administrative employees, 87 attorneys, 32 economists, and 29 accountants. Excluding the commissioners and secretary, the average salary for all employees was $2,604.87. The average salary for administrative employees was $1,746.87; for attorneys, $3,796.55; for economists, $3,535; for accountants, $2,737.24. There were 98 women employees.

During the year ended June 30, 1925, 36 employees, or 11 per cent, left the service of the commission and 36 new employees entered upon duty, leaving the number of employees at the close of June 30, 1925, the same as at the close of business June 30, 1924. The number of employees coming under the provisions of the civil service retirement law was 197.

The Federal Trade Commission received during the fiscal year ending June 30, 1925, official notice from the Personnel Classification Board granting appeals for reallocation in 17 cases. At the close of the year other appeals were still pending.

At the time of the commission's organization, March 16, 1915, the personnel consisted of 144 persons, these being carried over from the Bureau of Corporations of the Department of Commerce. The total number on the rolls on the date of declaration of war against Germany, April 6, 1917, was 198, and the number in the service at the time of the signing of the armistice, November 11, 1918, was 691. The high-water mark, so far as number of employees is concerned, was on December 9, 1918, when there were 710 employees in the service.

The turnover in the force in the short period of the history of the commission has been exceptionally high. There have been 2,194 original appointments in the little more than 10 years, and of this number 1,880 have left the service. This means that the commission has had about six times as many employees come and go as it now has on its rolls.

A statement of the personnel, including commissioners, at the end of each fiscal year since the organization of the commission is given below:

The above table shows a war-time personnel promptly cut in half after the armistice and a practically stationary personnel for the past five years.

FISCAL AFFAIRS

Appropriations available to the commission for the fiscal year ended June 30, 1925, under the executive and sundry civil act, approved June 7, 1924, amounted to $1,010,000. This includes an item of $50,000 for salaries of commissioners and $18,000 for printing and binding, leaving $940,000 for the general work of the commission.

Expenditures for the year plus outstanding liabilities amounted to $1,007,948.51, which left an unexpended balance of $2,051.49. Of this amount $133.86 represented the unexpended balance of appropriation for printing and binding. The remainder, $1,917.63, represents the unexpended balance of the lump-sum appropriation.

The appropriation, including unexpended balances of appropriations for previous years, and expenditures, are tabulated below.

It is estimated that the outstanding liabilities of the commission as of June 30, 1925, amount to $11,467.84, payment of which will be made from the unexpended balance of the appropriations, "Federal Trade Commission," 1925.

A detailed analysis of the costs of the commission is given in the following statement:

Statement of costs of the Federal Trade Commission for the fiscal year ended June 30, 1925