One of the most important works undertaken by the Commission for the Temporary National Economic Committee during the year 1939– 40 was the preparation of the Commission's report on the relative efficiency of large, medium-sized and small business in the United States. This study embraced more than 233 tests of business efficiency made in 18 important industries in the United States. The report included a 140-page summary and an appendix of more than 300 tables.

A number of the reports mentioned above were ready for hearings when the Temporary National Economic Committee met on May 6, 1940. The Committee, however, decided that no further hearings should be held until November 1940. In view of the Committee's decision, the Commission submitted all of its reports, except one, in written form to the Committee. The Commission reserved for hearings in the fall a study on freight discriminations in American industry. The essence of this study is a survey of the extent to which large corporations in American industry owning or controlling short line railroads receive in effect, through the operation of these lines, rebates from the large railroads.

During the year 1939-40, the Temporary National Economic Committee published as part of its publication series on Investigation of Concentration of Economic Power the following bulletins containing Federal Trade Commission hearings or reports:

Part 5: Monopolistic Practices in Industries.

Part 5 A: Federal Trade Commission Report on Monopolistic Practices in Industries.

Part 6: Liquor Industry (Department of Treasury and Federal Trade Commission cooperating).

Part 7: Milk Industry. Poultry Industry.

The activities of the Temporary National Economic Committee will cease as of January 1, 1941, with the expiration of the original act.

GENERAL INVESTIGATIONS

General investigations of the Commission in progress during the fiscal year related to corporation reports, accounting methods and practices, and resale price maintenance.

Corporation reports.-A Commission resolution adopted in 1939 authorized the periodic collection of annual or special reports of corporations engaged in interstate commerce, except common carriers and banks, in accordance with the Commission's powers conferred in section 6 of the Federal Trade Commission Act. The first reports appeared in summary form in October 1940, subsequent to the close of the fiscal year.

Accounting methods and practices.-Inquiry into the accounting practices of trade and industry in the United States was undertaken

in accordance with a Commission resolution adopted in 1939 and which outlined the following general objectives: Ascertaining how accounting practices may be made to serve better the needs of business management and of the public in its relation to business; providing legislative bodies the basis for guidance in the enactment and revision of legislation, and making more effective the administration of existing legislation.

Resale price maintenance (1939).-This inquiry, authorized in 1939 under a Commission resolution, has developed facts concerning the programs of trade organizations interested in the extension and enforcement of minimum resale price maintenance contracts, and the effects of the operation of such contracts upon consumer prices and upon the sales volumes of commodities in both the price maintained and non-price maintained categories. This study had not been. completed at the close of the fiscal year.

Approximately 115 general inquiries or studies have been conducted during the Commission's existence, most of them in pursuance of congressional resolutions, although many have been conducted pursuant to Presidential orders and others, like those in progress during the fiscal year 1939-40, on the Commission's initiative. Many of these inquiries have supplied valuable information bearing on competitive conditions and trends in interstate trade and industrial development and have shown the need for, and wisdom of, legislation or other corrective action.

The Commission made more than 150 cost reports to the Government during the World War.

COMMISSIONERS AND THEIR DUTIES

The Federal Trade Commission is composed of five Commissioners: appointed by the President and confirmed by the Senate. Not more than three of the Commissioners may belong to the same political party.

The term of office of a Commissioner is 7 years, as provided in the Federal Trade Commission Act. The term of a Commissioner dates from the 26th of September last preceding his appointment (September 26 marking the anniversary of the approval of the act in 1914),. except when he succeeds a Commissioner who relinquishes office prior to expiration of his term, in which case, under the act, the new member "shall be appointed only for the unexpired term of the Commissioner whom he shall succeed." Upon the expiration of his term of office, a Commissioner continues to serve until his successor has been appointed and has qualified.

As of June 30, 1940, the Commission was composed of the following members: Ewin L. Davis, Democrat, of Tennessee, Chairman;: Garland S. Ferguson, Democrat, of North Carolina; Charles H. March,.

Republican, of Minnesota; William A. Ayres, Democrat, of Kansas, and Robert E. Freer, Republican, of Ohio. Commissioner March will become Chairman in January 1941.

Each December the Commission designates one of its members to serve as Chairman during the ensuing calendar year. Commissioner Davis was chosen Chairman for the calendar year 1940, succeeding Commissioner Freer. The chairmanship rotates, so that each Commissioner serves as Chairman at least once during his term of office. The Chairman presides at meetings of the Commission, supervises its activities, and signs the more important official papers and reports at the direction of the Commission.

In addition to the general duties of the Commissioners, in administering the statutes, the enforcement of which is committed to the Commission, each Commissioner has supervisory charge of a division of the Commission's work. Chairman Davis has supervisory charge of the Chief Counsel's Division; Commissioner Ferguson, of the Chief Trial Examiner's Division and the Trade Practice Conference Division; Commissioner March, of the Chief Examiner's Division; Commissioner Ayres, of the Administrative Division and the Medical Advisory Division, and Commissioner Freer of the Economic Division and Radio and Periodical Division. The Commission has a Secretary, who is its executive officer.

Every case that is to come before the Commission is first examined by a Commissioner and then reported on to the Commission, but all matters under its jurisdiction are acted upon by the Commission as a whole. The Commissioners meet for the consideration and disposal of such matters every business day. They have administrative charge of the work of a staff which, as of June 30, 1940, numbered 668 officials and employees including attorneys, economists, accountants, and administrative personnel engaged in Washington, and in 5 branch offices. The Commissioners hear final arguments in the cases before the Commission; usually preside individually at trade practice conferences held for industries in various parts of the country, and have numerous other administrative duties incident to their position.

HOW THE COMMISSION'S WORK IS HANDLED

The various activities of the Federal Trade Commission may be classified generally under the headings: legal, economic, and administrative.

The legal work of the Commission is under the direction of its Chief Counsel, it Chief Examiner, its Chief Trial Examiner, the Director of its Radio and Periodical Division, and its Director of Trade. Practice Conferences.

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The Chief Counsel acts as legal adviser to the Commission, supervises its legal proceedings against respondents charged with violations of the acts administered by the Commission, has charge of the trial of cases before the Commission and in the courts, and supervises the export trade work of the Commission as conducted pursuant to the Export Trade Act.

The Chief Examiner has charge of legal investigations of applications for complaint alleging violations of the laws over which the Commission has jurisdiction, except as to probable violations which come under the observation of the Radio and Periodical Division as hereinafter explained. When the Commission undertakes investigations in response to congressional resolutions, or under section 6 of the Federal Trade Commission Act, the Chief Examiner supervises such general investigations as are primarily of a legal nature.

Members of the Chief Trial Examiner's Division preside at hearings for the reception of evidence in formal proceedings and certain of the investigations conducted by Executive direction, pursuant to congressional resolutions, upon the Commission's initiative, or at the request of the Attorney General. Other members of the division, who have no other function, arrange settlements by stipulation of applications for complaint, subject to the approval of the Commission.

The Division of Trade Practice Conferences conducts activities relative to the formulation and approval of trade practice rules, the holding of industry conferences in respect thereto, the administration and enforcement of such rules which have received Commission approval and are in effect, and other staff duties incident to the trade practice conference procedure.

The Radio and Periodical Division conducts preliminary investigations in cases involving allegations of false and misleading advertising. Such cases usually result from the division's continuing examination of radio and periodical advertising and are conducted under a special procedure.

The Medical Advisory Division furnishes to the Commission or any of its branches professional opinions in matters pertaining to the validity of claims made by advertisers of food, drugs, cosmetics, and devices in connection with cases instituted under the advertising provisions of the Federal Trade Commission Act as amended.

The Economic Division, under the Chief Economist, conducts those general inquiries of the Commission which are primarily of an economic nature, such as the resale price maintenance investigation. The Economic Division cooperates with the legal divisions with respect to the cost accounting work for the Robinson-Patman Act cases.

The Commission has on its staff an economic adviser. This official has charge of the special staff assisting the Commission in the studies assigned to it by the Temporary National Economic Committee.

Responsible directly to the Assistant Secretaries of the Commission, the Administrative Division conducts the business affairs of the Commission and is made up of units such as are usually found in Government establishments, the functions of such units being covered largely by general statutes. These units are: Accounts and Personnel, Docket, Publications, Library, Mails and Files, Legal Research and Compiling, Supply and Service, and Stenographic.

The Commission has access to the laboratories, libraries, and other facilities of Federal Government agencies, to any of which it may refer matters for scientific opinions or information. The Commission also obtains, when necessary, certain medical and other scientific information and opinions from nongovernment hospitals, clinics, and laboratories.

The Commission maintains branch offices in New York, Chicago, New Orleans, San Francisco, and Seattle.

PUBLICATIONS OF THE COMMISSION

Publications of the Commission, reflecting the character and scope of its work, vary in content and treatment from year to year. Important among such documents are those presenting fact-finding studies, reports, and recommendations relating to general business and industrial inquiries. Illustrated by appropriate charts, tables, and statistics, these books and pamphlets deal with current developments, possible abuses, and trends in an industry, and contain scientific and historical background. They have supplied economists, students of business and government, the Congress, and the public with information not only of general interest but of great value as respects the need or wisdom of new and important legislation, to which they have frequently led, as well as to corrective action by the Department of Justice and private interests affected. The Supreme Court has at times had recourse to them, and many of them have been designated for reading in connection with university and college courses in economics and law.

Findings and orders of the Commission, as published in book form in the Federal Trade Commission Decisions, contain interesting and important material regarding business and industry. They tell, case by case, the story of unfair competition, unfair or deceptive acts or practices, exclusive-dealing contracts, price discriminations, and capital-stock acquisitions in violation of the statutes which the Com