PART III. TRADE PRACTICE CONFERENCES

PURPOSES OF TRADE PRACTICE CONFERENCE PROCEDURE TRADE PRACTICE CONFERENCE ACTIVITIES

TYPES OF PRACTICES COVERED IN RULES

TRADE PRACTICE CONFERENCE PROCEEDINGS PENDING

RULES OF PRACTICE APPLICABLE

GROUP I AND GROUP II RULES DEFINED

PART III. TRADE PRACTICE CONFERENCES

PURPOSES OF THE TRADE PRACTICE CONFERENCE PROCEDURE

The trade practice conference procedure has for its purpose the establishment, by the Commission, of trade practice rules 12 for the protection of industry, trade, and the purchasing public against unfair competitive practices. Under this procedure effective means are made available for the voluntary participation and cooperation, with the Commission, of industry groups and other interested or affected parties in the establishment and observance of rules of fair practices. Thus cooperative action among competitors within the law and under Commission supervision may properly be taken to end trade abuses. Through such procedure the forces for good in an industry may be more effectively organized and directed. Consumer representatives are likewise afforded effective means, under the procedure, for participation in the establishment and carrying out of the rules in the interest of the public.

The different competitive practices or methods, which under the statutes and the various decisions of the courts or the Commission are considered to fall within the inhibitions of the law, may be clarified and listed in the form of specific rules applicable to the particular conditions existing in the industry concerned. Such clarification and codification of legal requirements and the organization of such cooperative endeavor under supervision of the Commission in the elimination of undesirable practices and the maintenance of fair competitive conditions is of vast importance to industry, to the public, and to the Government. It leads to the wholesale elimination and abandonment of unfair and illegal methods of competition, thereby bringing to legitimate business and the purchasing and consuming public relief and protection from harmful exploitation and the waste and burdens of such methods. This voluntary cooperation in the elimination of harmful practices also effectuates a large saving to the Government and to business in the expense which otherwise would have to be incurred in instituting a multiplicity of compulsory legal proceedings against individual offenders to require a cessation of the illegal practices in question.

Rules which may receive the Commission's approval or sanction may include not only provisions for the prevention of practices which

12 A booklet containing current trade practice rules will be available in the near future.

are illegal per se or are contrary to the general public interest, but also provisions for fostering and promoting practices which are designed to aid the maintenance of fair competitive conditions and to elevate the standards of business ethics in harmony with public policy.

The Division of Trade Practice Conferences is charged with the duty of conducting the various activities relative to the formulation and approval of trade practice rules, the holding of industry conferences in respect thereto, and all other staff duties incident to the trade practice conference procedure.

TRADE PRACTICE CONFERENCE ACTIVITIES DURING THE YEAR

During the fiscal year trade practice conference proceedings were before the Commission in respect to a large number of industries. Of these, proceedings in the following industries had reached the point of final promulgation of rules by the Commission: (1) macaroni and related products industry; (2) tomato paste manufacturing industry; (3) oleomargarine manufacturing industry; (4) silk industry; (5) baby chick industry; (6) paint and varnish brush manufacturing industry; (7) infants' and children's knitted outerwear industry; (8) ribbon industry; (9) wine industry; and (10) putty manufacturing industry. In addition, rules for the mirror manufacturing industry and for the radio receiving set manufacturing industry were given final approval by the Commission during the fiscal year and their promulgation was directed. The rules were released on July 19 and July 22, 1939, respectively.

In accordance with the regular procedure and prior to promulgation of trade practice rules for the foregoing industries, drafts of the proposed rules were made available, pursuant to public notice, to all interested or affected parties, affording them opportunity to present, for the consideration of the Commission, such pertinent views, suggestions, or objections as they might desire to offer, and to be heard in the premises.

The annual volume of sales of the products of those industries for which rules were promulgated during the fiscal year is estimated to be, in the aggregate, approximately 32 billion dollars. One of the largest of these groups, the silk industry, is reported to have a capital investment of more than $500,000,000, and to afford direct employment in the United States to approximately 250,000 persons. Raw silk, which is imported into the United States, is converted by American mills and factories into more than 60 varieties of finished goods with a total annual retail sales value of approximately $600,000,000.

The first year of the operation of rules for the fur industry has just ended. Much progress has been made in that time in correcting