labeling of food, drugs, and cosmetics, and after it had been considered 4 or 5 years, hearings held both in the Senate and in the House, Senator Wheeler reported for his committee what later culminated in the Wheeler-Lea Act and it was enacted by the Senate practically without opposition, if any at all, it came over here and hearings were held and this committee determined that the course that should be pursued was what was pursued and reported out a bill to that effect, and then it passed that session of the House, and then it passed the Senate, I believe, and then got caught in a jam and did not pass.

Congressman Lea, in the next Congress, again introduced the bill, and, so far as the record shows, it was unanimously reported by the Committee on Interstate and Foreign Commerce, of which Mr. Reece and Congressman Sadowski were both members, and I would like to introduce the Senate and House reports on that bill, which is S. 1077. And, Mr. Chairman, I would like to introduce them here.

There was not only no dissent to such reports in either branch of Congress, but in the House there was a minority report, or rather they call it "additional views," it was not a minority report, but additional views:

The undersigned members of the committee are heartily in favor of the general purpose of the bill herewith reported, but feel that the proposed new provisions of the Federal Trade Commission Act intended to regulate misleading advertising of food, drugs, devices, and cosmetics fall far short of giving to the consuming public that protection which they are represented as giving and to which the public is fairly entitled.

And that was signed by three members of the House committee, and all of the way through they are arguing for stronger penalties than those provided in the bill.

And then on the floor, the chief discussion ranged around stronger penalties. The speeches made by these and others urging stronger penalties than the bill provided. And then the motion to recommit offered by Congressman Kenney, who was one of those who signed these additional views, was to provide that the Federal Trade Commission should be authorized within its discretion to assess fines, I think, up to $5,000, against respondents at the same time it issued a cease and desist order against them.

Mr. REECE. Did not the committee state to the House that no dual authority existed? I have a very definite recollection that the committee that worked out the two bills; that is, the Wheeler-Lea Act and the Food and Drug Act, so as to enable the Commission to retain the jurisdiction over advertising in general and even greater powers over advertising relating to food, drugs, and cosmetics, thought it did so in such a way as not to lead to duplication and conflict and gave the House very definite assurance on that.

Mr. DAVIS. I say the record does not bear out that statement. Mr. REECE. You mean the record does not indicate that we thought we had avoided conflicting jurisdiction?

Mr. DAVIS. Well, I do not know what you mean by that, but it did not take jurisdiction over labeling away from the Federal Trade Commission.

There is evidence of that. Since you have raised the question, when the Lea bill, H. R. 3143, was being considered before the House committee, Congressman Eicher asked this:

Mr. EICHER. Judge Davis, what are your views as to whether or not if this amendment should be adopted, the Federal Trade Act would then contain ample administrative authority to deal with inhibitions against false labeling and so forth that are contained in the pending food and drug bill, if that should become a law?

Commissioner DAVIS. Well, the Commission already has, and has from the beginning, had jurisdiction over all forms of false or misleading advertising in interstate commerce. I mean of articles sold in interstate commerce, no matter how the representations are made, whether they were by newspaper publications or radio, or circular letter, or any kind of distributed circulars or books, letters, or even labels.

That appears on page 58 of the hearings on the Lea bill, February 19, 1937.

Mr. O'HARA. The House or the Senate?

Mr. DAVIS. In the House.

Here is what occurred in the Senate. The following occurred at the Senate hearings on the Copeland bill, S. 2800:

Mr. DAVIS. We assume that it is not expected of this Commission to give any opinions in relation to any feature of the bill as it relates to any other agency, and consequently I shall only discuss it from the standpoint of the jurisdiction of the Federal Trade Commission. As perhaps you are aware, the Federal Trade Commission has jurisdiction over false and fraudulent advertisements (p. 231).

I had been called, received a second call from the chairman of that committee, to appear and state the views of the Federal Trade Commission.

And then later I said:

Well, of course, if Congress desires to transfer the jurisdiction, that is a matter for them. I would not undertake to indicate what they should do in that respect (p. 237).

Senator Copeland stated:

Well, I would not be in favor of that, Judge, because in these competitive conditions you have a very important part to play in this field, outside of the matter of health itself (p. 237).

Later Senator Copeland stated:

I would not be willing to take from you any powers that you now have (p. 238). Mr. SADOWSKI. You submitted four copies of different cases on stipulations as to the facts and agreement to cease and desist. You have four of them here. They are more or less the same, I presume. One of them is very voluminous.

Would you pick out one of these, and we will put it in the record, just for the information of the committee.

I do not think we would want to put all four of them in. Just take one of those that you think is the most difficult case. Mr. DAVIS. I also wanted the one showing that caution which is different from the others; that is, the cautionary statement. Mr. SADOWSKI. All right; you may submit that.

We do not want to put all those cases in. I think one of them will be sufficient to show the procedure.

Mr. DAVIS. Those you handed me were findings of facts. There is the stipulation, one with and one without the cautionary statement. How many of these findings of facts do you desire?

Shall I put in all of them?

In that connection, speaking of findings of fact, there was some criticism by some of the witnesses.

Mr. SADOWSKI. I think if you submitted just one of those findings of facts, that would be sufficient.

Mr. DAVIS. I suggest the insertion in the record of the Rigid Steel Conduit Association findings of facts and order. (The matter referred to is as follows:)

UNITED STATES OF AMERICA, BEFORE FEDERAL TRADE COMMISSION

At a regular session of the Federal Trade Commission, held at its office in the city of Washington, D. C., on the 6th day of June, A. D. 1944

Commissioners: Robert E. Freer, Chairman; Garland S. Ferguson; Charles H. March; Edwin L. Davis; William A. Ayres.

Docket No. 4452

In the Matter of RIGID STEEL CONDUIT ASSOCIATION, AN UNINCORPORATED ASSOCIATION; ITS OFFICERS: HERBERT S. BLAKE, PRESIDENT; LAWRENCE R. QUINN, TREASURER; PAUL WEISS, ASSISTANT HREASURER; ROBERT S. BOOTH, EXECUTIVE SECRETARY; ITS BOARD OF DIRECTORS: T. A. BENNETT, CHAIRMAN ; J. M. BARTON; H. G. MORROW; LAWRENCE R. QUINN; H. S. WALKER; A. E. NEWMAN; AND Its MEMBERS CENTRAL TUBE COMPANY; CLAYTON MARK & COMPANY; COHOES ROLLING MILL COMPANY; ENAMELED METALS COMPANY; FRETZ-MOON TUBE COMPANY, INC.; GARLAND MANUFACTURING COMPANY; GENERAL ELECTRIC COMPANY; LACLEDE STEEL COMPANY; LACLEDE TUBE COMPANY; NATIONAL ELECTRIC PRODUCTS CORPORATION; STEELDUCT COMPANY; TRIANLE CONDUIT & CABLE COMPANY, INC.; WALKER BROTHERS; YOUNGSTOWN SHEET AND TUBE COMPANY; CORPORATIONS, INDIVIDUALLY AND AS REPRESENTATIVES OF THE MEMBERS OF THE RIGID STEEL CONDUIT ASSOCIATION; GENERAL ELECTRIC SUPPLY CORPORATION; SPANG CHALFANT, INC.; STEEL AND TUBES, INC.; REPUBLIC STEEL CORPORATION; THE M. B. AUSTIN COMPANY; GEORGE L. HATHEWAY; REGINA G. HATHEWAY; KATHERINE R. HATHEWAY; AND JANE HATHEWAY; PARTNERS, TRADING AS CLIFTON CONDUIT COMPANY; CHARLES DONLEY; FRANK C. HODKINSON; ORGANIZATION SERVICE CORPORATION; A CORPORATION, AND ITS OFFICERS: HERBERT S. BLAKE, PRESIDENT; HERBERT S. BLAKE, JR., VICE PRESIDENT; N. MYLES BROWN, VICE PRESIDENT; THOMAS B. JORDAN, VICE PRESIDENT; PAUL WEISS, TREASURER; C. C. GREGORY, SECRETARY; INDIVIDUALLY AND AS REPRESENTATIVES OF THE ORGANIZATION SERVICE CORPORATION; THE NATIONAL ELECTRICAL WHOLESALERS ASSOCIATION; AN UNINCORPORATED ASSOCIATION; ITS OFFICERS: J. G. JOHANNESEN, CHAIRMAN; D. L. FIFE, VICE CHAIRMAN; ALFRED BYERS, SECRETARY; THE MEMBERS OF ITS CONDUIT COMMITTEE: D. L. FIFE; W. S. BLUE; W. J. DRURY; A. H. KAHN; C. H. MCCULLOUGH; H. E. RASMUSSEN; H. O. SMITH; L. E. LATHAM; F. R. EISEMAN; W. R. KIEFER; H. B. TOMPKINS; A. L. HALLSTROM; A. S. RIECHMAN; D. M. SMITH; AND ITS MEMBERS: GENERAL ELECTRIC SUPPLY CORPORATION; E. B. LATHAM & COMPANY; FIFE ELECTRIC SUPPLY COMPANY; COLUMBIAN ELECTRICAL COMPANY; GRAYBAR ELECTRIC COMPANY, INC.; W. T. MCCULLOUGH ELECTRIC COMPANY; PEERLESS ELECTRIC SUPPLY COMPANY; THE HARDWARE AND SUPPLY COMPANY; REVERE ELECTRIC COMPANY; KIEFER ELECTRICAL SUPPLY COMPANY; WESTINGHOUSE ELECTRIC SUPPLY COMPANY; F. D. LAWRENCE ELECTRIC COMPANY; THE C. S. MERSICK AND COMPANY; INDIVIDUALLY AND AS REPRESENTATIVE OF ALL THE MEMBERS OF THE NATIONAL ELECTRICAL WHOLESALERS ASSOCIATION.

FINDINGS AS TO THE FACTS AND CONCLUSION

Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on January 25, 1941, issued and subsequently served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with the use of unfair methods of competition in commerce in violation of the provisions of said Act. After the issuance of said complaint and the filing of respondents' answers thereto, testimony and other evidence in support of and in opposition to the allegations of said complaint were introduced before an examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly recorded and filed in the office of the -Commission.

Thereafter, this proceeding regularly came on for final hearing before the Commission upon the complaint, the answers thereto, testimony and other evidence, report of the trial examiner and exceptions thereto, briefs in support of and in opposition to the complaint, and oral arguments by opposing counsel; and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS

PARAGRAPH ONE: (a) Respondent Rigid Steel Conduit Association (hereinafter frequently referred to as RSCA) was an unincorporated voluntary association, the membership of which included the manufacturers of substantially all the rigid steel conduit produced in the United States. It was organized in April 1934 as the immediate successor to the Rigid Steel Conduit Section of the National Electrical Manufacturers Association, the members of which voted to dissolve that section and on the same day organized RSCA. In turn, the Rigid Steel Conduit Section of the National Electrical Manufacturers Association was successor to the Interior Conduit Section of the Associated Manufacturers of Electrical Supplies, which was organized about 1915 and which became the National Electrical Manufacturers Association about 1926. RSCA was organized for the stated general purposes of considering matters of common interest in the manufacture and sale of rigid steel conduit, improving methods of distribution, and collecting and distributing information and data of value to the industry. The first step toward the dissolution of RSCA was taken at a meeting on April 19, 1939, the minutes of which recite in part:

* * * on motion, seconded and carried, it was voted to cease all forms of Association activities, except such as are necessary to close up outstanding commitments and obligations, and place the Association in abeyance, subject to its possible revival in the future, should conditions at a later date indicate the possibility of its functioning successfully in keeping with its originally expressed purposes (Comm. Ex. 35-E).

At a meeting on April 16, 1940, a resolution for the dissolution of RSCA was passed, to be effective as of May 31, 1940. From the time of its organization in 1934 until its formal dissolution it maintained its offices in New York City.

(b) Respondent Herbert S. Blake, an individual, is a lawyer with offices in New York, New York, and as president of respondent Organization Service Corporation is engaged in the management of the affairs of a number of trade associations. In October 1936 he undertook to aid in and direct the affairs of RSCA, and in March 1937 he became president of RSCA and continued in that office until his resignation in April 1939.

(c) Respondent Lawrence R. Quinn, an individual, vice president of respondent Enameled Metals Company, was active in the Interior Conduit Section of the Associated Manufacturers of Electrical Supplies, in the Rigid Conduit Section of the National Electrical Manufacturers Association, and in RSCA, in which at various times he served as treasurer, member of the board of directors, and chairman of the board of directors.

(d) Respondent Paul Weiss, an individual, treasurer of respondent Organization Service Corporation, served as assistant treasurer of RSCA from December 1936 until April 1938 and also supervised and carried on statistical work for RSCA.

(e) Respondent Robert S. Booth, an individual in the employ of respondent Organization Service Corporation, served as secretary pro tem of RSCA from December 1936 to January 1938, when he became executive secretary of RSCA and continued in that capacity until April 1939. During his connection, and that of Organization Service Corporation, with RSCA he supervised and carried on many activities for and in behalf of that association.

(f) Respondent I. A. Bennett, an individual, vice president of respondent National Electric Products Company, was active in the Rigid Conduit Section of the National Electrical Manufacturers Association and took a leading part in the affairs of RSCA. At various times he served as a member of the board of directors of RSCA and as chairman of such board.

(g) Respondent James M. Barton, the individual referred to in the complaint as J. M. Barton, president of respondent Fretz-Moon Tube Company, Inc., was active in and at various times served as a member of the board of directors of RSCA.

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(h) Respondent Harry G. Morrow, the individual referred to in the complaint as H. G. Morrow, formerly vice president of respondent Central Tube Company and thereafter connected with respondent Spang Chalfant, Inc., was active in the Interior Conduit Section of the Associated Manufacturers of Electrical Supplies, in the Rigid Conduit Section of the National Electrical Manufacturers Association, and in RSCA. At various times he was a member of the board of directors of RSCA.

(i) Respondent Hervey S. Walker,the individual referred to in the complaint as H. S. Walker, president of respondent Walker Brothers, was active in the Rigid Conduit Section of the National Electrical Manufacturers Association and in RSCA. At various times he served as an officer of RSCA and as a member of its board of directors.

(j) Respondent A. E. Newman, an individual, manager of Wiring Materials Sales of respondent General Electric Company, was active in the affairs of RSCA. He was elected to the board of directors of that association in January 1938, but after attending at least two board meetings declined to accept the position. and on July 13, 1938, the board of directors accepted his resignation.

(k) Respondent Central Tube Company (hereinafter frequently referred to as Central Tube) was a corporation organized under the laws of the State of Pennsylvania, with its principal place of business in Pittsburgh, Pennsylvania. It was engaged in the manufacture and sale of rigid steel conduit until about February 1940, when its assets were purchased by respondent Spang Chalfant, Inc., and thereafter its corporate existence was terminated in November 1940. Central Tube was a member of the Interior Conduit Section of the Associated Manufacturers of Electrical Supplies, a member of the Rigid Conduit Section of the National Electrical Manufacturers Association, and a member of RSCA and participated in its affairs throughout the existence of that association.

(1) Respondent Clayton Mark & Company (hereinafter frequently referred to as Clayton Mark) is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business in Evanston, Illinois It succeeded the Mark Manufacturing Company, which was purchased by respondent Youngstown Sheet and Tube Company in 1923. Clayton Mark discontinued the manufacture of rigid steel conduit about October 1938 and has subsequently sold conduit bearing its own brands which it has secured principally from Youngstown Sheet and Tube Company, and, to limited extent, from respondents Enameled Metals Company and Fretz-Moon Tube Company, Inc. The Marks Manufacturing Company was a member of the Interior Conduit Section of the Associated Manufacturers of Electrical Supplies. Clayton Mark was a member of the Rigid Conduit Section of the National Electrical Manufacturers Association and a member of RSCA and participated in its affairs from the organization of that association until its dissolution.

(m) Respondent Cohoes Rolling Mill Company (hereinafter frequently referred to as Cohoes) is a corporation organized and existing under the laws of the State of New York, with its principal place of business at Cohoes, New York. It is a manufacturer of rigid steel conduit, with a plant capacity of about 800 tons of such conduit per month, and also manufactures other iron and steel products. Its conduit business constitutes but a small part of its total business. About January 1934 Mohawk Tube Company, Inc., successor to Mohawk Conduit Company, was merged with Cohoes. Mohawk Conduit Company was a member of the Rigid Conduit Section of the National Electrical Manufacturers Association, to which membership the Mohawk Tube Company succeeded. The latter became a member of RSCA, in which membership it was succeeded by Cohoes. Cohoes resigned from RSCA, effective July 31, 1938, but its representatives thereafter continued to attend meetings of that association and to take part in association activities.

(n) Respondent Enameled Metals Company (hereinafter frequently referred to as Enameled Metals) is a corporation oraginzed and existing under the laws of the State of Pennsylvania, with its principal place of business at Etna, Pennsylvania. It manufactures rigid steel conduit from pipe purchased from respondent Spang Chalfant, Inc., and has a plant capacity of about 3,000 tons of such conduit per month. It was a member of the Interior Conduit Section of the Associated Manufacturers of Electrical Supplies, thereafter a member of the Rigid Conduit Section of the National Electrical Manufacturers Association, and thereafter a member of RSCA and participated in its affairs until the dissolution of that association.