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THE FEDERAL TRADE COMMISSION ITS HISTORY, ACTIVITIES, AND ORGANIZATION

CHAPTER I

HISTORY

The Federal Trade Commission is an independent establishment created in 1914, whose principal duties are to prevent unfair methods of competition, to compile and investigate the economic facts concerning corporations engaged in interstate commerce, and to supervise the export trade associations formed under the Export Trade Act.

Government Control of Industry. The relation of government to industry has been debated throughout the entire history of the country and varying policies have been adopted from time to time. For many years there has been a steady progress toward greater government supervision over industry. Each successive step was contested, but the tendency for greater control over a wider field has prevailed. When the United States entered the World War the Federal Trade Commission marked the furthest point reached in the extension of government control of industry. Greater powers were exercised by the Interstate Commerce Commission, but that body dealt only with public utility corporations, the common carriers, while the Federal Trade Commission had to do with the broad field of general industry.

The modern aspect of the problem began after the Civil War with the rise of big business. Soon after its advent came the beginnings of modern regulation. These were the state railroad commissions, which served as a model for the Interstate Commerce Commission of 1887. The first step toward the control of general industry was the Sherman Anti-Trust Act of 1890.

Sherman Anti-trust Act. This law is the starting point and background for all the discussion of government control of industry. It provides that “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.” 2 It gives the courts of the United States jurisdiction to prevent and restrain violations of the act and charges the Attorney General with the duty of instituting proceedings in equity to prevent and restrain violations.

This method of dealing with monopolies after they were formed was not used extensively during the first ten years, despite the fact that it was a period of industrial consolidation. Particularly between the years of 1898 and 1901 when, among the many others, there were organized: The United States Steel Corporation, The American Can Company, The American Woolen Company, The United Shoe Machinery Company, The International Paper Company, The American Locomotive Company, and The International Steam Pump Company.

Industrial Commission. This extraordinary era of combination attracted wide attention and caused much discussion of the “trust problem.” In 1898 the Industrial Commission was created to "investigate questions pertaining to immigration, to labor, to agriculture, to manufacturing and to busi

1 Massachusetts 1869, California 1876, New York 1882.

2 On May 15, 1911 in United States vs. Standard Oil Co. the Supreme Court held that the law applies only to combinations in unreasonable restraint of trade, thereby apparently reversing earlier decisions which held any combination illegal regardless of the de„gree of restraint.

ness.” The investigations, which lasted until 1902, included the trust problem to which much time and attention were devoted. The commission recommended greater publicity regarding the operation of corporations as the chief measure of reform. This was to be obtained by Federal supervision exercised by a permanent bureau, "the duties of which shall be, to register all State corporations engaged in interstate or foreign commerce; . . and to collate and publish information regarding such combinations and the industries in which they may be engaged, so as to furnish to the Congress proper information for possible future legislation."

The Bureau of Corporations. Some of the recommendations of the Industrial Commission were translated into action the following year (1903) when the Bureau of Corporations was created. This bureau was the direct predecessor of the Federal Trade Commission, into which it was merged when the latter was created in 1914.

The law under which the Bureau of Corporations was created was section 6 of the act establishing the Department of Commerce and Labor (32 Stat. L., 827) reading as follows:

Sec. 6. That there shall be in the Department of Commerce and Labor a bureau to be called the Bureau of Corporations, and a Commissioner of Corporations who shall be the head of said bureau, to be appointed by the President, who shall receive a salary of five thousand dollars per an

num.

The said Commissioner shall have power and authority to make, under the direction and control of the Secretary of Commerce and Labor, diligent investigation into the organization, conduct, and management of the business of any corporation, joint stock company or corporate combination engaged in commerce among the several States and with foreign nations excepting common carriers subject to “An Act to regulate commerce," approved February fourth, eighteen hundred and eighty-seven, and to gather such information and data as will enable the President of the United States to make recommendations to Congress for legislation for the

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