The resolutions adopted by the industry at the conference were placed in two groups. Group I resolutions were affirmatively approved by the commission and Group II resolutions were accepted. by the commission as expressions of the trade. The resolutions embraced in Group I refer to the following practices:

Inducing breach of contract, misbranding, fraud and misrepresentation, the labeling of products, substitution of quality, secret rebates, and price discrimination.

The resolutions embraced in Group II include the following practices:

Selling at cost to induce purchase of other products, arbitration, selling without specifications, differentials between carload and less than carload shipments, and antidumping.

COTTONSEED OIL MILLS INDUSTRY

A trade practice conference for the cottonseed oil mills industry was held at Memphis, Tenn., July 24, 1928, Edgar A. McCulloch, commissioner, presiding, assisted by M. Markham Flannery, director of trade practice conferences.

It was estimated that, based on volume, approximately 95 per cent of the industry, covering 14 Southern States, was represented.

Resolutions adopted by the conference were arranged in groups. Group I included resolutions affirmatively approved by the commission and Group II, resolutions accepted by the commission as an expression of the trade.

The resolutions embraced in Group I prohibit:

Price discrimination, commercial bribery, and misbranding, and provide for publication of price statistics.

The following resolution, which was something of an innovation, in that no similar rule has been included in any previous trade practice conference, was adopted:

Resolved, That the clandestine violation of any of said resolutions, those accepted by the Federal Trade Commission merely as expressions of the industry as well as those approved by said commission, shall be deemed to be unfair methods of competition.

Commissioners Humphrey and Ferguson did not concur in the approval of this rule, being of the opinion it was beyond the power of the commission.

Resolutions included in Group II condemn unwarranted cancellation of contract, or post or predating of contracts under certain circircumstances, define character and quality of commodities, regulating time of delivery, condition of purchases, brokerage, and commissions.

PAINT, VARNISH, AND LACQUER AND ALLIED INDUSTRIES

A trade practice conference was held for the paint, varnish, and lacquer and allied industries, at the Ambassador Hotel, Atlantic City, N. J., on August 1, 1928, at which G. S. Ferguson, jr., commissioner, presided, assisted by M. Markham Flannery, director of trade practice conferences.

Approximately 60 per cent of the paint, varnish, and lacquer industry, based on volume, was present.

Resolutions which were divided into two classes were adopted by the conference. Those relating to business conduct are designated as rules 1, 2, and 3, and were affirmatively approved by the commission. Those relating to committee work and requests to the commission are designated A, B, and C, and were accepted by the commission as expressions of the trade.

The resolutions embraced in the first group relate to commercial bribery, false advertising, and misbranding. The resolutions contained in the second group relate to the establishment of a committee. to cooperate with the commission.

REBUILT TYPEWRITER INDUSTRY

A second trade practice conference was held for the rebuilt typewriter industry, at Cleveland, Ohio, August 22, 1928, at which Edgar A. McCulloch, commissioner, presided, assisted by M. Markham Flannery, director of trade practice conferences.

The conference was attended by members of the industry, who conduct about 50 per cent of the volume of business in this field and comprise about 5 per cent of the industry in numbers.

The conference previously held for this industry on February 27, 1920, defined the term "rebuilt" as applied to typewriters.

Two resolutions were passed by the conference which were affirmatively approved by the commission. These resolutions define and prescribe the use and application of the words "rebuilt " and "overhauled."

PUBLISHERS OF PERIODICALS

A trade-practice conference for publishers of periodicals was held at the Waldorf-Astoria Hotel, at New York City, on October 9, 1928, at which William E. Humphrey, chairman of the commission, presided, assisted by Attorney Martin A. Morrison and by M. Markham Flannery, director of trade-practice conferences.

Practically the entire periodicals publishing field was represented, in person or through associations.

The following resolution was unanimously adopted:

Whereas, at this conference or trade practice for periodicals, held in response to the call of Hon. William E. Humphrey, chairman of the Federal Trade

Commission, Chairman Humphrey has said in part: "The majority of the periodical publishers not only obey the law but often go far beyond what the law requires in selecting the advertisements they will publish. I do not believe there is an industry in America conducted by more honest, high-minded, public-spirited men and women than the publication industry. I do not believe that any industry in America has greater power for good. I believe that the future greatness and security of the Nation rests to a greater extent upon the publishing industry than probably any other": Be it

Resolved, That we express our sincere appreciation of such commendation, from so high an official and personal source, of the principles and conduct of the publishing industry; and

Whereas, The record of the publishing industry for many years past shows that the very great majority of such publishers have, of their own initiative, taken measures to eliminate fradulent advertising from their columns, and have welcomed every practicable suggestion to increase the efficiency of such measures; be it

Resolved, That we recognize the fact that the National Better Business Bureau, an organization composed of and supported by the business of advertising, is the most competent agency of assistance to the business of advertising in preventing fraud in advertising and selling and that said bureau has expressed its willingness to cooperate in every way with publishers, in eliminating fradulent advertising; be it further

Resolved, That we desire and will welcome every cooperation and assistance of the National Better Business Bureau and, said bureau having expressed its willingness and ability to do so, we request said bureau to advise periodical publishers generally, and, wherever deemed advisable, any governmental agency, whenever advertising, which is being published or is likely to be offered for publication, is established by said National Better Business Bureau to be fraudulent upon reasonable investigation and notice to the person complained of. The National Better Business Bureau, by the above resolution, was selected by the publishers as the machinery through which the industry would do its own policing of the periodical field. In other words, the National Better Business Bureau, operating wholly in behalf of the publishers and advertising industry, will report to the commission, through the division of trade practice conferences, violations of the trade practice conference rule. This, however, does not preclude anyone from reporting such violations directly to the commission, nor does it in any way affect the exercise of the commission's prerogative to cause applications for complaints to be filed on the commission's own initiative.

CHIEF EXAMINER

The chief examiner supervises all of the legal investigating work of the commission. Most of this work is the investigation of applications for complaints preliminary to the correction of unfair methods of competition under the various laws administered by the commission. To this division are also referred special inquiries, primarily of a legal nature, which the commission may be directed to do by the President, either House of Congress, or the Attorney General. Investigations preliminary to the possible issuance of complaints originate in several ways, i. e., by the direction of the commission, by information obtained in other investigations, and in the great majority of cases by direct application to the commission from competitors or the public, which may be affected by alleged unfair practices. No formality is required in making an application for a complaint, a letter setting forth the facts in detail being sufficient, which should, however, be accompanied by all evidence in the possession of the complaining party in support of the charges being made.

When an application is received by the chief examiner the jurisdictional elements, such as interstate commerce, methods of competition involved, and public interest are considered. In many cases it is necessary to supplement the data submitted by correspondence or by a preliminary investigation before deciding whether to docket an "application for the issuance of complaint." A smaller percentage of the total inquiries received are now docketed than formerly. By referring to Table 1 (p. 87) it will be noted that during the year only about 20 per cent of the inquiries were docketed as applications for complaints. In 1923 about 30 per cent of the total inquiries received were docketed and in 1921 about 50 per cent. This decrease is accounted for by the fact that as precedents are established by the commission and the courts, it is possible to dispose of more inquiries without an extensive investigation.

After an application is docketed it is assigned by the chief examiner to an examining attorney or a branch office for investigation. It is their duty to secure all the facts regarding the matter from both the applicant and the respondent. Without disclosing the name of the applicant, the party complained against is approached, advised of the charges, and requested to submit such evidence as it desires in defense or explanation of its position. The examining attorney, after developing the facts from all available sources, summarizes the

evidence in a final report, reviewing the law applicable thereto, and making a recommendation as to action. The entire record is then. reviewable by the chief examiner, and, if it appears to be complete, is submitted with recommendation to the board of review or the commission for their consideration.

The chief examiner also conducts, by direction of the commission or upon requests of other units, supplemental investigation of applications for complaints, of formal complaints where additional information is desired by the chief counsel, or suspected violations of the commission's orders to cease and desist. This includes the alleged violation of stipulations to cease from unfair practices entered into between respondents and the commission and the violation of resolutions subscribed to at trade-practice conferences.

The investigating work of the commission is carried on from its main office at Washington, D. C.. and through its three branch offices located at 45 Broadway, New York City; 608 South Dearborn Street. Chicago, Ill.; and 544 Market Street, San Francisco, Calif. An attorney from the San Francisco office is also located at Seattle. Wash., with an office at 431 Lyon Building. Business men can confer at these places with qualified representatives of the commission regarding cases and in light of the rulings made by the commission.

THE CLAYTON ACT

The commission has concurrent jurisdiction with the Department of Justice in the enforcement of sections 2, 3, 7, and 8 of the Clayton Act. Effective enforcement of section 7 has been most difficult and in its annual report for the year ending June 30, 1927, the commission directed attention to the decisions of the United States Supreme Court in the cases against the Western Meat Co., Swift & Co., and the Thatcher Manufacturing Co., construing this act (272 U. S. 554). In this decision the order of the commission against the Western Meat Co., including the prohibition of the acquisition of the physical assets of the Nevada Packing Co., through ownership of the illegally acquired stock, was affirmed. In the case of Swift & Co. and the Thatcher Manufacturing Co., however, by a 5 to 4 vote, the court set aside the commission's orders on the ground that the statute conferred no authority upon the commission to order a disposition of physical assets although obtained as a result of an illegal acquisition of stock. In these two cases the acquisition of the physical properties was consummated before the commission filed its complaints, while in the case against the Western Meat Co., the physical property had not been acquired at the time final order was issued. The result is that a corporation may purchase the stock of a competitor in violation of section 7, and if it can use the stock thus acquired to com