CONTENTS IV. Deceptive and Dishonest Practices V. Practices Which Restrain Trade. T PREFACE HE Federal Trade Commission will soon have completed the ninth year of its formal existence. For several years, it is true, its energies were largely absorbed in special work of a transitory character, connected with the prosecution of the war, but even during those years its normal functions were never completely in abeyance, and since the armistice it has had ample opportunity to perfect the organization and develop the procedure appropriate to its main task. The Commission is now a going concern, elaborately organized into departments, divisions, and sections, with a personnel of more than 300 men and women and an annual appropriation of nearly a million dollars. The authority of the Commission and the meaning of the fundamental statutes which it administers have been the subject of numerous court decisions, and the Commission itself has published five volumes of reports embodying its complaints, findings, and orders in administrative proceedings. Not only by court decision, but by force of its own precedents and rules, the Commission's administrative technique and modes of procedure have begun to assume definite form. It is possible now to study the Federal Trade Commission, if not as an organization in its full maturity, at least as a piece of machinery which has been fully designed and assembled, and has been exposed for several years to the test of actual service. In the early years of growth of a new governmental agency there is necessarily much of trial and error. In its substantive decisions as well as in matters of procedure, it is inevitable that occasional false starts should be made, and that some policies should be pursued which later prove to have been mistaken. Because in the course of this study some practices are referred to which should in my opinion be corrected, and methods criticised which seem to me defective, it should not be assumed that the Commission's work is to be wholly condemned, or that the fundamental policies of the Federal Trade Commission Act are unsound. At the risk of anticipating conclusions, it may not be amiss to record here my belief that the Commission has a valuable and important function to perform, and that the matters criticised in portions of this study are none of them of such a character that they cannot, if the criticisms are valid, be corrected by changes of method and procedure or by minor legislative amendments. In the course of the investigation, I have been accorded every courtesy and assistance by the members of the Commission and its officers and employees. All proceedings of the Commission, beginning with the issuance of the formal complaint, are matters of public record, and I have spent much time in the Docket Division and the Library of the Commission delving into the material thus available. I have not asked for or obtained access to any records or files not open to public inspection, and I have been careful not to embarrass the employees of the Commission by asking questions concerning matters which could properly be considered confidential. A word as to the field covered by the investigation. This is a study in administrative law and procedure, and only those activities of the Commission which properly fall within the scope of such a study have been examined or discussed, although they constitute only a part of the Commission's work. Thus the Commission has made, at the request of Congress or of the President, or for the assistance of other government departments, a large number of special investigations and reports, such as its study of grain marketing, of the petroleum and fertilizer industries, of tobacco prices, and of the production and distribution of coal, to mention only a few. During the war, it made extensive investigations into costs of production, to assist other government agencies in arriving at fair prices in the purchase of supplies. It had charge of issuing licenses in the United States for the use of inventions, trade marks, or copyrighted matter patented or registered in enemy countries. It is engaged in administering certain provisions of the Webb-Pomerene Export Trade Act of 1918. For the most part these activities are beyond the scope of this study. Investigations and reports, except in so far as they involve the compulsory production of documentary evidence or compulsory testimony, raise no questions properly within the field of administrative law. The activities immediately connected with the war have no permanent significance, important as they were at the time. The work of the Commission under the export trade law has not involved any formal administrative proceedings. The study has, therefore, been limited to the normal and permanent duties of the Commission in administering Section 5 of the Federal Trade Commission Act, and Sections 2, 3, 7, and 8 of the Clayton Act, in the belief that an intensive study of these peculiarly administrative functions would be more helpful than a discursive treatment of its many other activities. |