points in the case. These contained no names and were for the guidance of those interested in the opinions of the commission with regard to particular practices and the interpretation of the law. The commission considered that this method of disposing of cases would not only save much time and money but would also serve the public interest as well as a formal proceeding. However, after the experience of two years the commission decided that the results did not warrant the continuance of this method of handling complaints. The "conference rulings" were ineffectual and were not such orders as could be made the basis of enforcement proceedings. No more "conference rulings" were issued, and since then formal proceedings have been held in all such

cases.

The number of applications for complaints has increased steadily from the organization of the commission, as the following table shows.

When a formal complaint is made it is served by someone duly authorized by the commission either (a) by delivering a

copy to the person to be served, or to a member of the partnership to be served, or to an executive officer or a director if it is a corporation; or (b) by leaving a copy of the complaint at the principal office or place of business of the person, partnership, or corporation; or (c) by sending one there by registered mail. A complaint thus served contains the charges and gives notice of a hearing to be held on a certain day, at least forty days after the service of the complaint. Attention is also called in the complaint to that rule of practice before the Federal Trade Commission requiring a written answer within thirty days from the service of the complaint. This answer "shall contain a short and simple statement of the facts which constitute the ground of defense. It shall specifically admit or deny or explain each of the facts alleged in the complaint, unless the defendant is without knowledge in which case he shall so state, such statement operating as a denial."

Although the law says the defendant has the right to show cause why an order should not be entered by the commission requiring him to cease and desist from the violation of the law as charged, the commission has assumed that the burden of proof is on it to establish the allegations of the complaint. Consequently the defendant is not required to bring any witnesses on the date fixed by the complaint. The usual practice on that date is to fix a time and place for the beginning of the taking of testimony. The testimony is usually taken before an examiner of the commission who has had experience in trials in the courts. He passes upon the admissibility of the evidence presented at the hearings before him. But before the taking of the testimony is finally closed, either party objecting to the ruling of the examiner upon the introduction of evidence may have such ruling reviewed by the commission. Subpoenas requiring the attendance of witnesses or the production of documentary evidence can be issued by any member of the commission. Witnesses receive the same fees and mileage that are paid witnesses in the courts of

the United States. In cases where sufficient cause can be shown testimony may be taken by deposition. If the respondents are surprised or unprepared for the cross-examination of witnesses who testify in support of the commission's complaint, the commission will recall such witnesses at a later date for cross-examination. After the testimony to support the complaint has been presented the respondents are given a reasonable length of time to prepare evidence to be given in support of their answer or in rebuttal of the testimony presented in support of the complaint. In the proceedings the commission is represented, and the evidence is offered, by attorneys while the respondent may appear in person or be represented by counsel. When the evidence has all been introduced before the examiner, the attorneys on both sides present to the commission briefs of the law and facts. The pleadings, evidence, and summary thereof are also presented to the commission. The counsel for the respondent can, if it is desired, make oral argument before the commission. The commission then makes its findings as to the facts and issues its order to cease and desist from the practices complained of or dismisses the case.

If the respondent fails to obey the order the commission may apply to the circuit court of appeals in any circuit, where the method of competition in question is used or where the respondent resides or carries on business, for the enforcement of its order. Or if the respondent receiving an order to cease and desist wishes to, he may obtain a review of the case in the circuit court of appeals, which has authority to affirm, set aside, or modify the order of the commission. In either case a transcript of the record is filed in a circuit court of appeals of the United States. But the findings of the commission as to facts are conclusive if supported by testimony. If either party applies to the court for leave to adduce additional evidence, the court may order such evidence to be taken before the commission. The commission can then modify its findings as to facts or change its order in the

light of the new evidence. Of the thirty appeals to court that have been made up to June 30, 1921, there have been seventeen decided, fifteen unfavorably to the commission and two favorably. Several of these have been taken to the Supreme Court on appeal, and more are likely to be, as the time limit for appeals has not expired.

The following table shows the number and status of the formal complaints that have been issued so far.2

Analysis of the charges in the formal complaints served up to June 30, 1921 shows that thirty-nine complaints have charged violations of Section 2 of the Clayton Act (prohibiting price discrimination); ninety-three complaints have

1

1 A good many of these cases contained practically identical principles.

2 The discrepancies in this and the table of applications between the number of applications going to formal complaints and the number of the latter served, are due, on the one hand, to the consolidation of applications against similar respondents, and, on the other, to the fact that some applications have several respondents who were preceded against individually.

charged violations of Section 3 of that act (prohibiting "tying contracts"); twenty-six complaints have charged violations of Section 7 of the act (prohibiting "holding companies"), two complaints have charged violations of Section 8 of the Clayton Act (prohibiting "interlocking directorates"); three complaints have charged violations of Section 4 of the Export Trade Act; and in eight hundred and twentyone complaints there have been charges of violations of the general prohibition of unfair methods of competition contained in Section 5 of the Federal Trade Commission Act.

3

The list of the particular methods of competition that have been condemned by the commission as being unfair and in violation of the law, is a long one. Among the most wide-spread and far-reaching unfair methods of competition is commercial bribery. The commission has devoted much attention to this practice, and on May 15, 1918, submitted a special report on it to Congress in accordance with that part of Section 6 of the Federal Trade Commission Act which authorizes them to "make special reports to Congress and to submit therewith recommendations for additional legislation." The report called the attention of Congress to the fact that the commission has no criminal jurisdiction and in dealing with commercial bribery it was limited to one side, the giving side, and urged Congress to pass a strong law against the practice making both giving and receiving a crime. Furthermore, in several industries, notably the paint and varnish, the printing ink, and the ship chandlery and repair business, where bribery was very wide-spread, the commission not only has issued many complaints but also is coöperating with a trade association in each one to stamp out the practice.

Trade Practice Submittal. In 1919 the commission began a new procedure, the trade practice submittal, to supplement its restrictive procedure in preventing unfair methods of competition. This is an attempt to eliminate, simultaneously and by

A list of the most common and important of the methods condemned is published in the Annual Report of the Federal Trade Commission for the fiscal year ended June 30, 1920.