INTRODUCTION THE COMMISSION ASSUMES NEW FUNCTIONS REGULAR WORK UNDER THE ORGANIC ACT GENERAL INVESTIGATIONS OF THE COMMISSION HOW THE COMMISSION'S WORK IS HANDLED THE COMMISSIONERS AND THEIR DUTIES PUBLICATIONS OF THE COMMISSION VII ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION INTRODUCTION THE COMMISSION ASSUMES NEW FUNCTIONS Developments occurring toward the close of the fiscal year 1932-33 of which this volume is the annual report, have had a marked and far-reaching effect upon the duties of the Federal Trade Commission. With the signing of the Securities Act of 1933 on May 27 by President Roosevelt began a new era in the history of the Commission. This act provided that in 40 days from the date of enactment the filing of registration statements for proposed issues of securities sold in interstate commerce or through the mails would be in order and that in 60 days from date of enactment the act would be in full effect. In the period between May 27 and July 7, which was the first date for filing, the Commission set up a skeleton organization for handling the registration statements as they arrived. During the first month of operation more than 130 registration statements, representing upward of $165,000,000 in securities proposed to be sold in various parts of the country, were filed with the Commission. Since that time the Commission has increased the personnel of the securities division; but, on account of the lack of adequate funds, has been unable to provide sufficient employees to administer the act without an excessive amount of overtime on the part of all employees engaged in such work. The Commission believes that a proper and efficient administration of the act will prevent a large part of the frauds that have heretofore been practiced upon the public through the sale of worthless securities. A report of the Commission's securities registration work showing its significance to the business world and the investor and presenting a history of this most important piece of legislation while in the making, may be found beginning at page 11 of this volume. In addition to its work under the Securities Act which is perhaps the most outstanding of the permanent reform legislation 1 Copies of the Securities Act of 1933, Federal Trade Commission Act, National Industrial Recovery Act, Sherman Act, Clayton Act, and Export Trade Act, may be obtained on application to the Federal Trade Commission or Government Printing Office, Washington, D.C. passed by the Seventy-third Congress, the Commission is also doing its part in aiding the administration with its recovery program: Its chairman is a member of the Special Industrial Advisory Board named by the President for the National Recovery Administration, while the Commission stands ready at all times to carry on investigations as required by the National Industrial Recovery Act,2 which act calls upon the Commission to make investigations "to enable the President to carry out the provisions of this title", for which purposes "the Commission shall have all the powers vested in it with respect of investigations under the Federal Trade Commission Act, as amended." 2 Much of the work of the National Recovery Administration itself is based ultimately upon the principles of the Federal Trade Commission Act, the industrial recovery act providing that violation of an industrial code which is considered as the standard of fair competition for an industry, "shall be deemed an unfair method of competition in commerce within the meaning of the Federal Trade Commission Act, as amended."3 However, the National Industrial Recovery Act also provides that no part of that act shall be construed to impair the powers of the Federal Trade Commission. REGULAR WORK UNDER THE ORGANIC ACT Pursuant to the Federal Trade Commission Act and other acts the regular work of the Commission has gone on and is continuing. During the fiscal year ending June 30, 1933, the Commission conducted its trade-practice conferences, having approved and accepted the trade-practice conference rules for 17 industries and published the rules of 21 industries. Likewise, the Commission, in its work of preventing and correcting unfair methods of competition and other practices, conducted preliminary investigations of 1,538 cases during the year, dismissing 1,274 for lack of jurisdiction and other causes, and docketing 264 as applications for complaint. One hundred eighty-three cases were settled by stipulation, of which 85 were of the special class involving false and misleading advertising. The Commission issued 53 complaints against companies and individuals, charging them with various forms of unfair competition held not to be in the public interest, while 66 orders to cease and desist from unfair practices were served on that many respondents. Representative cases of both classes are described, respectively, at pages 69 and 74. In addition to the cases referred to above, some of which involved false and misleading advertising, the Commission, with the aid of its special board of investigation, handled 547 cases dealing exclusively with that type of advertising. Under the Webb-Pomerene 'National Industrial Recovery Act, title I, sec. 6 (c). 'National Industrial Recovery Act, title I, sec. 3 (b) law or Export Trade Act, administered by the Commission to promote export trade, a number of American associations engaged solely in export trade were exempted from the provisions of the antitrust laws. Besides this act and the other acts heretofore mentioned, the Commission also administers sections 2, 3, 7, and 8 of the Clayton Act dealing, respectively, with unlawful price discriminations, so-called tying contracts, stock acquisitions which lessen competition or tend to create a monopoly, and interlocking directorates. GENERAL INVESTIGATIONS The Federal Trade Commission Act under section 6 (a) gives the Commission power "to gather and compile information concerning, and to investigate from time to time, the organization, business, conduct, practices, and management of any corporation engaged in commerce, excepting banks and common carriers, and its relation to other corporations and to individuals, associations, and partnerships." * * * In pursuance of section 6 the Commission conducts general investigations at the request of the President, Congress, or the Attorney General, or upon its own initiative, and makes reports in aid of legislation and in regard to alleged violation of the antitrust laws. More than 70 such inquiries have been conducted during the Commission's existence. During the fiscal year 1932-33 the Commission completed three general investigations, continued with three others, and began an inquiry to ascertain the salary schedules of officers and directors of certain corporations. Those investigations completed were the chain store, the cottonseed, and the cement industry inquiries, while work continued on power, price bases, and building materials. These investigations and the status of each are described as follows: Power and gas utilities.-Public hearings were held during the year concerning the affairs of companies which were members of nine large utility groups, which groups, in a recent year, generated about 18 percent of the total electric energy produced in the United States. In the aggregate, during the entire investigation, there will have been taken up companies which represented in a recent year more than 45 percent of the total output for the United States, and more than 80 percent of the electric energy sold by privately owned electric utilities doing an interstate or international business. (See p. 19.) It is expected that the investigation will be concluded during the fiscal year ending June 30, 1934, and a final report will be submitted to the Senate. The testimony and exhibits introduced in the hearings comprised (Nov. 15, 1933) 59 volumes, of which 45 are now available in printed form, while the remainder will be printed. |