PART IV. TRADE-PRACTICE CONFERENCES

COMMISSION ACTION ON TRADE-CONFERENCE RULES

HISTORY AND PURPOSE OF TRADE-CONFERENCE PROCEDURE RESULTS ATTAINED FROM TRADE-PRACTICE CONFERENCES TRADE-PRACTICE CONFERENCE PROCEDURE

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PART IV. TRADE-PRACTICE CONFERENCES

COMMISSION ACTION ON TRADE-PRACTICE CONFERENCE RULES SHOWN

Trade-practice conference rules for 21 industries were made public by the Commission during the fiscal year.

The Commission approved and accepted trade-practice conference rules for 17 industries during this period, as follows: Furnace pipe and fittings; ornamental iron, bronze, and wire; electrical wholesalers; sanitary napkins; saw and blade service; ice-cream industry, District of Columbia and its vicinity; mopsticks; cleaning and dyeing industry, District of Columbia and its vicinity; cedar chests; live poultry, New York City and adjacent territory; milk producers and distributors, Michigan and adjoining States; all-cotton wash goods; ribbed hosiery; upholstery textiles; warm-air furnaces; woodworking machinery; and marking devices.

Reports of conferences embodying the rules of the following are before the Commission awaiting final action: Musical merchandise industry, cleaning and dyeing industry of Pennsylvania and adjoining States, Barre-granite industry, and baby-chick industry.

Action by the Commission on trade-practice conference rules is not made public until such rules have been approved by the Commission and accepted by the committee authorized by the industry to act for it in matters affecting trade-practice conference rules.1

HISTORY AND PURPOSE OF TRADE-PRACTICE CONFERENCE PROCEDURE

The trade-practice conference was the logical development of the efforts of the Commission cooperating with industry to protect the public against unfair methods of competition and to raise the standards of business practices. As early as the year 1919 the Commission established the procedure of holding conferences with industry for the purpose of eliminating unfair methods of competition as well as trade abuses existing therein.

The trade-practice conference affords representatives of an industry the opportunity to assemble voluntarily and, under the auspices of the Federal Trade Commission, consider unfair and unethical practices and trade abuses and provide methods for their correction or

1 Responsive to many requests from business through trade associations and individuals, the Commission authorized the publication of a trade-practice conference booklet containing the rules for close to 100 industries. A copy of this pamphlet may be obtained by addressing the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., enclosing 15 cents.

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abandonment. It is a procedure whereby an industry takes the initiative in establishing self-government of business, making its own rules of business conduct, subject to approval by the Commission.

The procedure deals with an industry as a unit. It is concerned solely with practices and methods. It wipes out on a given date unfair methods of competition, unethical conduct, and trade abuses condemned at the conference and thus places all competitors on an equally fair competitive basis. It performs the same function as a formal complaint without bringing charges, prosecuting trials, or employing compulsory process, but multiplies results by as many times as there are members in the industry. Attendance at a conference or actual participation in the deliberations does not indicate that any firm or individual has indulged in the practices condemned. The procedure is predicated on the theory that the primary concern of the Federal Trade Commission is the interest of the public. The public is entitled to the benefits which flow from competition, and each competitor is entitled to fair competition. The legitimate conduct of business is in perfect harmony with the best interest of the public. That which injures one undoubtedly harms the other, and the Commission in the trade-practice conference provides a procedure which protects the interests of both. In these conferences is found a common ground upon which competitors can meet, lay aside personal charges, jealousies, and misunderstandings, freely discuss practices of an unfair or harmful nature, reach a basis of mutual understanding and confidence, and provide for the correction or abandonment of such practices to the advantage of industry and the public.

For many years attempts have been made to eliminate by means of self-regulation those unfair methods of competition, unethical practices, and trade abuses prevailing within various industries. The degree of success attained is readily measured by existing competitive conditions. If these conditions are all that can be reasonably desired, the success attained is complete. If, however, harmful practices still exist, their efforts at self-regulation have failed. The tradepractice conference affords an effective machinery for self-regulation.

RESULTS ATTAINED FROM THE TRADE-PRACTICE CONFERENCE

Trade-practice conferences have proven of incalculable benefit to the public by the voluntary elimination of unfair methods of competition, and have resulted in a great saving of time and expense by obviating the necessity of investigation and trial by complaint.

A prominent authority on trade-practice conferences has stated that through voluntary action, which is fundamental in tradepractice conference procedure, an industry can accomplish in an hour or two what otherwise might consume years of prosecution;