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Commission cannot give the information requested in many cases either because the matters may be under investigation or it is not fully advised of all the facts and cannot render opinions therein. It is the Commission's policy to treat as confidential all proceedings prior to acceptance of a stipulation or issuance of a complaint. After a stipulation has been accepted and approved, or a complaint issued, the facts concerning such proceedings are for the public record and available to anyone who may request them.

Cooperation of radio and publishing industries.-In general, the Commission has received the helpful cooperation of nation-wide and regional networks, and transcription producers, in addition to that of some 617 active commercial radio stations, 252 newspaper publishers, and 408 magazine publishers, and has observed an interested desire on the part of such broadcasters and publishers to aid in the elimination of false, misleading, and deceptive advertising.

Commodity advertising.-The Commission's representative coverage of current national and regional advertising, between July 1, 1934, and June 30, 1938, includes examination of 2,069,306 newspaper, magazine, and radio advertisements for questionable representations. An analysis of commodity data, drawn from the questionable advertisements set aside for investigation in connection with this review, discloses the following classifications with respect to type, purpose, or use as advertised:

Commodities Named in Advertisements Marked for Investigation, 1934–1938

Name of commodity

Percentage of total advertised articles in

group investigated

Drugs, drug products, drug component preparations, and alleged remedies__

30. 5

Food products and beverages_

6.8

Cosmetics and toiletries__.

6. 1

Health devices, instruments, apparatus, contrivances, and similar specialty articles....

5. 3

Commodity sales promotion plans, with agency and employment offers, and specialty, novelty goods advertising -

14. 9

Correspondence courses, stamps, coins, astrological data, books, and similar mail order offers.- -

12. 5

Automobile, radio, refrigerator, and other equipment lines. Miscellaneous, including apparel, tobacco products, pet breeding, poultry raising, gasoline and lubricants, specialty building materials, etc..

9.0

14. 9

The above compilation was based on an analysis of 105,962 questionable commercial radio continuities, and 55,863 questionable pub

lished advertisements, contained in 12,759 prospective advertising case files, assembled during the 4 fiscal years from July 1, 1934, to June 30, 1938, inclusive.

Sources of special board cases.-Examination of current newspaper, magazine, and radio advertising, in the manner described, has provided the basis of an average of 80.4 percent of the cases handled by the Commission through its special board in the last 3 years. Complaints received from the public and information referred to the board from other divisions of the Commission and from other Government agencies formed the basis of the balance of this work.

Number of cases handled.-During the fiscal year ended June 30, 1938, the Commission, through its special board, sent questionnaires to advertisers in 733 cases, negotiated 383 stipulations, and settled and closed by its various methods of procedure a total of 625 cases. The board recommended that complaints be issued in 29 cases for failure to execute stipulations or for violating stipulations. In 11 cases the board recommended that complaints be issued without giving the advertisers an opportunity to stipulate because of gross deception or danger to the public involved in the practices in which they were engaged.

In 205 cases the board recommended filing the assembled data and closing the cases without prejudice to the right of the Commission to reopen them at any time the facts warranted. Eleven cases were closed because the Post Office Department had issued fraud orders against the respondents concerned or had accepted stipulations in lieu of fraud orders. Others were closed because the parties respondent had discontinued advertising or selling without intent to resume, and others because the advertisers were able to justify their claims.

Three hundred and six cases were pending before the special board on July 1, 1937; 414 on June 30, 1938.

Commission has access to scientific services.-Effective cooperation continues with other departments of the Government. The Commission has access to the laboratories, libraries, and other facilities of Federal Government agencies, including the Bureau of Standards, Public Health Service, and the Food and Drug Administration, Bureau of Home Economics, and Bureau of Animal Husbandry of the Department of Agriculture, to any of which it may refer a matter for scientific opinion. When necessary, the Commission obtains medical and other scientific information and opinions from non-government hospitals, clinics, and laboratories. Such material and cooperation are often particularly helpful in enabling the Commission to reach sound and fair conclusions with respect to scientific and technical questions which come before it, and especially so in connection with much of the work of the special board.

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Procedure in advertising cases.-If a published or broadcast advertisement coming to its attention appears on its face to be misleading, the special board sends a questionnaire to the advertiser, requesting a sample of his product, if this is practicable, and a quantitative formula, if the product is a compound, and also requesting copies of all advertisements published or commercial continuities broadcast (if such continuities are not already on file) during a specified period, together with copies of all booklets, folders, circulars, form letters, and other advertising literature used.

Upon receipt of this data, the claims, sample, and formula are referred to an appropriate technical agency of the Government for a scientific opinion. Upon receipt of the opinion the advertising is carefully scrutinized, and portions of the copy that appear to require substantiation or explanation are marked as excerpts and numbered.. A copy of this numbered list, and a copy of the opinion received, are sent to the advertiser, who is extended the privilege of submitting evidence which he thinks may substantiate or satisfactorily explain the representations found in his advertising. He may answer by letter or, upon his request, may confer with the special board in person or through counsel.

If the advertiser is able to substantiate or explain all representations questioned, the board reports the matter to the Commission with the recommendation that the data be filed without prejudiceand that there be no further proceedings for the time being.

If the advertiser fails to substantiate or explain any material statement in his advertising which the board has reason to believe is falseor misleading, the board refers the matter to the Commission with recommendation that application for complaint be docketed and the matter returned to the board for negotiation of a stipulation, provided the advertiser desires to dispose of it by such voluntary agreement to cease and desist from the objectionable representations involved.

If the Commission approves such recommendation the board prepares a stipulation and forwards it to the advertiser for execution. Should he object to any of its provisions, he may discuss them by mail or in person. When he agrees upon the terms of the stipulation. and signs and returns it, the matter is again reported to the Commission with recommendation that the stipulation be accepted and the case closed without prejudice.

Simplified methods adopted. The object of all Commission procedure is to prevent unfair methods of competition and unfair and deceptive acts and practices in commerce, and experience has shown that this can be accomplished not only by cease and desist orders,. but by the stipulation method, which is effective and speedy as well as inexpensive for both Government and respondent.

PART V. FOREIGN-TRADE WORK

THE EXPORT TRADE ACT (WEBB-POMERENE LAW)

EXPORTS SHOW SUBSTANTIAL INCREASE

EXPORT ASSOCIATIONS IN OPERATION

SUPPLEMENTAL REPORT ON ANTIDUMPING LEGISLATION

TRUST LAWS AND UNFAIR COMPETITION ABROAD

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