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in respect of gathering information concerning the organization, business conduct, practices and management of corporations engaged in interstate commerce, as follows: It may require special and annual reports from corporations and others; may, upon its own initiative, investigate the manner in which any final decree in a suit brought by the United States under the antitrust acts is being carried out; upon direction of the President or either house of Congress shall investigate and report the facts relating to any alleged violation of the antitrust acts; upon application of the Attorney General to investigate and make recommendations for the readjustment of the business of any corporation alleged to be violating the antitrust acts in order that the corporation may thereafter conduct its business in accordance with law; to make public such portions of the information which it obtains as it shall deem expedient in the public interest, not including trade secrets or names of customers; to submit to Congress recommendations for additional legislation; to publish its reports and decisions; to classify corporations; to make rules and regulations for carrying out the provisions of the act, and to investigate trade conditions in and with foreign countries where commercial practices or other conditions may affect the foreign trade of the United States and to report thereon to Congress with recommendations. The above very brief summary discloses that the Federal Trade Commission has indeed become an extremely important factor in the commercial life of the country.

In the very recent and important case of Sears Roebuck & Company, Petitioner vs. Federal Trade Commission, Respondent (not yet reported), No. 2559, October Term, 1918, United States Circuit Court of Appeals for the Seventh Circuit, decided April 29, 1919, being an original petition to review the order of the Commission, it was maintained on behalf of petitioner that the act creating the Commission was void because of indefiniteness and hence violative of the Constitution of the United States. Petitioner urged that the fifth section of the law must fall or the words "unfair methods of competition” be construed to embrace no more than those acts which on September 26, 1914, when the law was enacted, were recognized as acts of unfair trade, condemned by the common law as expressed in prior cases. The court did not sustain such contentions and pointed out that the phrase was no more indefinite than "due process of law," "undue influence," "unsound mind," "unfair use," "unjust discrimination," and the like. It was also urged that the construction as placed by the Commission upon the fifth section would bring about an unconstitutional delegation of legislative and judicial power to the Commission. After citing several cases to sustain its position that the contention was without merit, the court upon this point stated:

"With the increasing complexity of human activities many situations arise where governmental control can be secured only by the board' or 'commission' form of legislation. In such instances Congress declares the public policy, fixes the general principles that are to control, and charges an administrative body with the duty of ascertaining within particular fields from time to time the facts which bring into play the principles established by Congress. Though the action of the Commission in finding the facts and declaring them to be specific offenses of the character embraced within the general definition by Congress may be deemed to be quasi legislation, it is so only in the sense that it converts the actual legislation from a static into a dynamic condition. But the converter is not the electricity. And though the action of the Commission in ordering desistance may be counted quasi judicial on account of its form, with respect to power it is not judicial, because a judicial determination is only that which is embodied in a judgment or decree of a court and enforceable by execution or other writ of the court."

The following from the opinion of the court is also interesting:

"On the face of this statute the legislative intent is apparent. The Commissioners are not required to aver and prove that any competitor has been damaged or that any purchaser has been deceived. The Commissioners, representing the Government as parens patriae, are to exercise their common sense, as informed by their knowledge of the general idea of unfair trade at common law, and stop all those trade practices that have a capacity or a tendency to injure competitors directly or through deception of purchasers, quite irrespective of whether the specific practices in question have yet been denounced in common law cases.

But the restraining order of the Commissioners is merely provisional. The trader is entitled to his day in court, and there the same principles and tests that have been applied under the common law or under statutes of the kinds hereinbefore recited are expected by Congress to control.”

The order of the Commission requiring petitioner to cease selling sugar below cost was set aside by the court. The court observed it found in the act no evidence of an intention on the part of Congress, even if it possessed the power, to restrain the owner of property from selling it below cost or even giving it away if he so desired, provided his action in so doing was not in other respects violative of the act.

The Webb Export Law, approved April 10, 1918 (40 U. S. Stat., 516), provides, in its second section, that nothing contained in the Sherman Antitrust Law of 1890 shall be “construed as declaring to be illegal an association entered into for the sole purpose of engaging in export trade and actually engaged solely in such export trade, or an agreement made or act done in the course of export trade by such association, provided such association, agreement, or act is not in restraint of trade within the United States, and is not in restraint of the export trade of any domestic competitor of such association.” There is a further provision in the section that such association shall not enter into any agreement which enhances or depresses prices in the United States, or which substantially lessens competition or otherwise restrains trade therein. Certain verified written statements must be filed with the Commission by all associations which are engaged solely in export trade. To the small dealer the act has opened the door to export trade, through the permitted combination. About fifty trade organizations have filed with the Commission the papers required in order to avail themselves of the benefits conferred by the law.

The Webb law marks a new era in Governmental co-operation with the business men of the country. The effect is certain to appear in the increased vigor of our foreign trade. Coming into being when the industries of the nation were more highly organized than ever before the influence of the recognition by the Government of combinations of capital to operate in foreign fields, holds incalculable possibilities for the expansion and maintenance of the foreign trade of the United States.

BARRY MOHUN. Washington, May, 1919.

THE FEDERAL TRADE COMMISSION

W. B. COLVER, Chairman.
Term expires September 26, 1920.

John F. FORT, Vice-Chairman.

Term expires September 26, 1924.

VICTOR MURDOCK.
Term expires September 26, 1925.

HUSTON THOMPSON.
Term expires September 26, 1919.

*

Term expires September 26, 1921.

* Chief Counsel, E. L. SMITH, Acting Chief Counsel.

J. P. YODER, Secretary. FRANCIS WALKER, Chief Economist. MELVILLE WOOSTER, Chief Accountant.

* Vacant.

X

THE FEDERAL TRADE COM

MISSION LAW
APPROVED SEPTEMBER 26, 1914 (38 U. S. STAT., 717).

To be known as Federal Trade Commission.

Three only of same political party. Terms of office.

AN ACT TO CREATE A FEDERAL TRADE
COMMISSION, TO DEFINE ITS POWERS,

AND FOR OTHER PURPOSES.
Creation of Commission. Composed of Five Commissioners,

Appointed by the President. Not More Than Three of
Same Political Party. Terms of Office, etc. Choice of
Chairmen. Other Employment Forbidden. Removal from

Office. Official Seal.
SECTION 1. That a commission is hereby created and established,
to be known as the Federal Trade Commission (hereinafter referred
to as the commission), which shall be composed of five commis-
sioners, who shall be appointed by the President, by and with the
advice and consent of the Senate. Not more than three of the com-
missioners 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 ap-
pointed only for the unexpired term of the commissioner whom he
shall succeed. The commission shall choose a chairman from its
own membership. No commissioner shall engage in any other bus-
ness, 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 com-
mission. The commission shall have an official seal, which shall be
judicially noticed.
Salaries of Commissioners. Authority to Employ Attorneys

and Others. Clerical Employees Part of Classified Civil
Service. Payment of Expenses. Rental of Offices. Audit

of Expenditures.
SECTION 2. That each commissioner shall receive a salary of
$10,000 a year, payable in the same manner as the salaries of the

Successors appointed for seven years;

Exception.

Chairman chosen from

commission. Outside employment forbidden. President may

re move for inefficiency, etc.

Vacancy ineffectual to prevent function. ing.

Official seal judi. cially noticed.

Salary of Com missioners $10,000 annually.

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