rung, and the result was that after the decisions in the Standard Oil and the American Tobacco cases in 1911, and from that point on, was just a series of antitrust cases. By 1914, when the Federal Trade Commission bill was pending, I was retained by the Merchants Association of New York to come down and to do what I could to assist with Mr. Brandeis, later Mr. Justice Brandeis, in trying to get that bill on the statute books.

Much has been asked, particularly in the very intelligent questions by Congressman Dolliver, as to why it was in 1914 that they adopted the commission form, and in that connection he criticized the use of the word "inevitable." I might make the same criticism.

Between 1911 and 1914, there was just agitation regarding the antitrust decisions in the Standard Oil and American Tobacco cases. About the only thing which was then in mind, as a mode of regulating very large enterprises, was the commission form, which had been adopted in 1887 in the Interstate Commerce Commission Act.

Governor Hughes started the Public Service Commission idea in 1906 with respect to the regulation of public utilities, so that it was quite natural to think of that, especially as there were two points of view from 1911 until 1914. First of all, businessmen were greatly perturbed by the sweep of the Supreme Court's decision in the American Tobacco case and the Standard Oil case and felt that they would like to have something which, instead of immediately prosecuting them criminally and confronting them with injunction and dissolution, might be in the nature of a mere warning to them.

That is why, when the Federal Trade Commission was set up, it had merely cease and desist powers. That is one reason. The other was that by means of this Commission and its investigatory power, and so forth, there could be something like a restraining hand put on offenses, which in time might mature into antitrust law offenses.

To use the phrase which was current at that time, it was designed to stop a monopoly or a restraint in trade in its incipiency.

That is the real reason why the Commission form of government was advocated and was adopted at that time.

I think that Professor Oppenheim would agree, if he had been actively on the job then as I was, and if he had had the experience that I had at that time as a lawyer, 34 years ago.

I had had more than 10 years' prior familiarity with the subject of trusts, and in 1914 I knew all of the principals who were in the Senate and the House when the Federal Trade Commission Act was set up. I was seeing almost daily Mr. Brandeis. I could explain many things in connection with that bill, and that question of Congressman Dolliver, I think, could be answered in the way that I have described.

After the Commission was created by statute in 1914, and was set up by appointment and organized in 1915, I promptly found myself engaged in considerable practice under that statute, and I am told that, so far as age, continuous service before the Commission, and number of matters and importance of matters are concerned, I probably have had more cases over a longer period of time than any other practicing lawyer who has been continuously active before the Commission during the last 33 years, from 1915 to date. With the exception that I have on a few occasions acted for complainants, and on still fewer occasions have come in by permission as amicus curiae, I have always been repre

senting the respondent, and have always been advising corporations who are trying to keep out of trouble with the Federal Trade Commission.

So the point of view which I am down here to indicate to you-and, as I said, spending my own money to come in and testify-is a point of view wholly different from that of Wendell Berge, and wholly different from that of Professor Oppenheim. It is that of a man who bares scars from his fights with the Commission over a period of 33 years, and I trust that I have inflicted some scars on them. I have won some cases and I have lost some cases. I have seen them in action. I have seen every Commissioner from the very first day to the present time, and I want, speaking from that, to tell what my experience has been.

The CHAIRMAN. You mention the fact that you have suffered scars. I would say that time has dealt very generously with you.

Mr. MONTAGUE. I might say at the present time that I think that some of the sharpest encounters that I have had with the Federal Trade Commission have been within the past year. So do not think of me as being a tamed cat in any sense. I am not built that way.

I might make reference to many things which have occurred during that period.

The fact that the Commission was a judge, jury, and prosecutor all in one, curiously enough, was not very much discussed in 1914, when this legislation was pending. It is a very singular_fact, but what they were mostly thinking about was the Interstate Commerce Commission, which had the same situation, and which had become quite familiar. They were also very familiar with the fact that businessmen were then very keen to have this Commission, the thought being that instead of taking a risk as to what the law meant, in a case which might involve indictment and fine, or dissolution, they would have only an order to cease and desist, and therefore they were keen for it. So no one seemed to have very much worry or concern about that, but after the bill was passed, and the Commission got set up, there began to be some comment among the Federal judges, especially the Circuit Court of Appeals judges when any orders of the Commission came before them, about that, and that was reflected in that famous quotation which I think Judge O'Hara has used in a speech, which he made in Congress in favor of this bill, in John Bene & Sons, Inc. v. FTC (299 Fed. 468, 471 (1924)), in which, after reversing an order based on a thoroughly inadequate record, which had a lot of hearsay, they threw in this taunt about judge, jury, and prosecutor being altogether.

Mr. HARRIS. When was that?

Mr. MONTAGUE. I would have said offhand about 1924, which was very early. Judge O'Hara, can you tell us?

Mr. O'HARA. No.

Mr. MONTAGUE. I will show you how I used to capitalize on that. When I would come before the Commission, after a case had been set for argument, and we had made up the record and so on, and were arguing the case, I would always indicate to them, without any spleen, that they were in somewhat of an anomalous position, because after all they were the prosecutor, and they were sitting as judge, and they were sitting as jury. I can absolutely state, as my own experience, that

I have never known of an instance when the effect of that did not make them lean over backwards. My own belief is that they would have been much freer if they had not had that complication, and also the somewhat cynical expression which was thrown into the picture by the remarks of Judge Hough in the Bene case; and I have yet to find a single instance of improper conduct by the Commission in my own practice, or in cases brought to my attention as chairman for many years-I have been a member for 34 years of the committee on Federal Trade Commission of the Commerce and Industry Association of New York, which dates from 1914, the year before the Commission even organized, and while the bill was being passed. In that committee, I was chairman for 19 years, up until 2 years ago, and therefore I had not only my own practice, but also a great deal of other experience in many instances of complaints, because I have also handled a large number of complaints which had come in to my committee from the Commerce and Industry Association, so that I am pretty familiar with the general character of what must be the complaints that you speak of as having come in, Mr. Chairman, to your committee.

Taking this by and large, I would say that there would not be very many instances which would not fall into this general classification: Proneness on the part of the members of the Commission to see in some advertisement, for example, some possibility of deception on the part of the consumer, which, to an intelligent manufacturer, or to an intelligent buyer, would be absolutely negligible. I would fancy that you could find a very considerable number of those complaints, because I have constantly run into them in my practice.

I might say that in recent years my practice has been largely that of a lawyer's lawyer, constantly being brought in by lawyers who come before the Commission, and also coming in as associate counsel, and advising clients as to how to keep out of trouble.

I have discovered this antipathy of businessmen to the Commission. I do not deny that everybody in trouble with the Commission would like to get rid of the Commission. It is just like everybody would like to get rid of the tax laws. The Commission has no friends, of course, among those who want to take advantage of conditions, or when it comes down to things with which they are charged. It may be some order of the Commission in which somebody has had to stop something sometime, because the Commission said that it constituted something that was deceiving somebody, when they reply, "Of course, nobody can be deceived by that." That, I will say, I have often seen, as I think all attorneys have.

I saw in a release of the Federal Trade Commission, a couple of weeks ago, an order against a company, requiring that it should put into its advertisement of some patent medicine some wording that it was not good for this, that, or the other thing. One of the Commissioners dissented, stating that the Commission-the majority of the Commission, as he said-has a very dim view of the intelligence of the American public to require that.

The fact is that dating from 1922, that so-called dim view of the Federal Trade Commission, which makes them put into their orders things about deception which many manufacturers regard as wholly unreasonable, is compelled by what the Supreme Court of the United States has said is what they have got to put in. Let me give you the

first Supreme Court case which exemplified that. It was a decision, as. I recall, in which there was no dissenting opinion. There may possibly have been one judge who dissented. It was written by Mr. Justice Brandeis, in which underwear at that time was being advertised as "merino," and it was shown that in the trade for a long period of timeseveral generations—“merino” meant not pure wool, but wool plus cotton, and it was shown, as I recall, that that was the dictionary definition, which indicated that "merino" did not mean pure wool, but meant wool plus cotton, or might mean that. But the Supreme Court held that if a purchaser who is not in the trade, or even a more ignorant than ordinary purchaser, associates in his mind "merino" as meaning wool, the Commission is justified in stopping the use of that term. Now, I submit that, starting with that early period, with that warning from the Supreme Court of the United States to the Federal Trade Commission that they must not take the dictionary meaning; that they must not take the trade meaning; that they must not take what the dealer thinks; but that they must take the lowliest kind of purchaser, and take what it may indicate to him, I submit that this Supreme Court decision requires that there are a lot of things which the Federal Trade Commission must do in enforcing its act, which are going to look right strange, and pretty unpleasant, to businessmen generally.

That accounts, I think, for a great deal of the complaint that you are likely to receive.

Now, going back to my experience down here in 1914, when the bill was passed.

This was the phrase-and it has already been read into the record once, but I want to get it in again, because I am going to give the back history of it somewhat-this is the phrase which was put in to define what should be competent evidence for the purpose of sustaining an order of Commission, and it is part of section 5, and says:

The findings of the Commission as to the facts, if supported by testimony, shall be conclusive.

It is a very peculiar thing, but I have tried twice, with two men in my office, to search the hearings and the Congressional Record, and I do not find any place where that particular phrase was at all seriously considered. It might have been referred to once or twice, but I am speaking of being debated in either the Senate or the House."

My recollection, which is pretty vivid, of those matters, carries nothing at all of any discussion. I sat in at a number of conferences which Mr. Brandeis had with Judge Covington, who handled the bill in the House admirably, and Senator Newland, who handled it in the Senate, and I spent a good deal of time at his house, and was constantly in those conferences.

Why did they put in that phrase "The finding of the Commission as to facts if supported by testimony, shall be conclusive"?

The reason they put that phrase in is that it is exactly the rule which, from the foundation of the Republic, has been the rule in respect to the trial of civil suits in the Federal courts, and it relates back to the seventh amendment of the Constitution, which is part of the Bill of Rights, which reads as follows:

In suits at common law, where the value in controversy shall exceed $20, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise reexamined in any court of the United States than according to the rules of the common law.

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I have never known of an instance when the effect of that did not make them lean over backwards. My own belief is that they would have been much freer if they had not had that complication, and also the somewhat cynical expression which was thrown into the picture by the remarks of Judge Hough in the Bene case; and I have yet to find a single instance of improper conduct by the Commission in my own practice, or in cases brought to my attention as chairman for many years-I have been a member for 34 years of the committee on Federal Trade Commission of the Commerce and Industry Association of New York, which dates from 1914, the year before the Commission even organized, and while the bill was being passed. In that committee, I was chairman for 19 years, up until 2 years ago, and therefore I had not only my own practice, but also a great deal of other experience in many instances of complaints, because I have also handled a large number of complaints which had come in to my committee from the Commerce and Industry Association, so that I am pretty familiar with the general character of what must be the complaints that you speak of as having come in, Mr. Chairman, to your committee.

Taking this by and large, I would say that there would not be very many instances which would not fall into this general classification: Proneness on the part of the members of the Commission to see in some advertisement, for example, some possibility of deception on the part of the consumer, which, to an intelligent manufacturer, or to an intelligent buyer, would be absolutely negligible. I would fancy that you could find a very considerable number of those complaints, because I have constantly run into them in my practice.

I might say that in recent years my practice has been largely that of a lawyer's lawyer, constantly being brought in by lawyers who come before the Commission, and also coming in as associate counsel, and advising clients as to how to keep out of trouble.

I have discovered this antipathy of businessmen to the Commission. I do not deny that everybody in trouble with the Commission would like to get rid of the Commission. It is just like everybody would like to get rid of the tax laws. The Commission has no friends, of course, among those who want to take advantage of conditions, or when it comes down to things with which they are charged. It may be some order of the Commission in which somebody has had to stop something sometime, because the Commission said that it constituted something that was deceiving somebody, when they reply, "Of course, nobody can be deceived by that." That, I will say, I have often seen, as I think all attorneys have.

I saw in a release of the Federal Trade Commission, a couple of weeks ago, an order against a company, requiring that it should put into its advertisement of some patent medicine some wording that it was not good for this, that, or the other thing. One of the Commissioners dissented, stating that the Commission-the majority of the Commission, as he said-has a very dim view of the intelligence of the American public to require that.

The fact is that dating from 1922, that so-called dim view of the Federal Trade Commission, which makes them put into their orders things about deception which many manufacturers regard as wholly unreasonable, is compelled by what the Supreme Court of the United States has said is what they have got to put in. Let me give you the