provision that such associations are not to be in restraint of trade within the United States. A new statute, The Wool Products Labeling Act, effective July 14, 1941, is also administered by the Commission.

The Commission's general investigations arise chiefly under section 6 (a), (b), and (d) of the Federal Trade Commission Act, giving the Commission power:

(a) 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.

(b) To require, by general or special orders, corporations engaged in commerce, excepting banks, and common carriers to file with the commission in such form as the commission may prescribe annual or special, or both annual and special, reports or answers in writing to specific questions, furnishing to the commission such information as it may require as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective corporations filing such reports or answers in writing.

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(d) Upon the direction of the President or either House of Congress to investigate and report the facts relating to any alleged violations of the antitrust Acts by any corporation.

GENERAL LEGAL ACTIVITIES

Upon authority of the acts which it administers, the Commission, during the fiscal year ended June 30, 1941, continued to direct its efforts to the prevention and elimination of unlawful practices prohibited by those statutes.

Cases before the Commission.-The Commission, after preliminary investigation, during the fiscal year disposed of approximately 1,850 matters which were in a preliminary stage, either by docketing as applications for complaints, by progression to the status of formal complaint, by acceptance from the respondents of stipulations to cease and desist from the practices involved, by consolidation with other proceedings, or by closing the matters.

During the year, the commission accepted a total of 532 stipulations to cease and desist various practices, executed by parties against whom informal proceedings had been instituted. Of these, 234 pertained especially to misleading radio and periodical advertising matter.

An investigation under section 6 (d), when requested by Congress, is now undertaken by the Commission as a result of a concurrent resolution of both Houses, in conformity with the Independent Offices Appropriation Act approved June 16, 1933.

The Commission issued 357 complaints against companies, associations, or individuals, alleging various forms of unfair competition or unfair, deceptive, or other unlawful acts or practices, as compared with 331 complaints docketed during the last preceding fiscal year. These included 11 cases of alleged combination to fix and maintain prices, 6 cases of alleged combination and conspiracy in restraint of trade, 219 complaints charging misleading representation in advertisements, labels and otherwise, and 57 complaints alleging violation of the Clayton Act. The Commission entered 348 orders to cease and desist from the use of unfair competition and other law violations which had been alleged in complaints and which were found to have been engaged in by the respondents, as compared with 282 such orders issued during the last preceding fiscal year.

Cases before the Federal courts.-In those Commission cases which were pending during the year in the Federal courts, results favorable to the Commission were obtained in 40 cases, while adverse decisions were rendered in only 2 matters. Two of the 40 proceedings resulting favorably to the Commission were before the Supreme Court of the United States, 26 were before the United States circuit courts of appeals (in 3 of which cases the Commission's orders were modified and affirmed as modified), and 12 were before United States district courts. The cases in the Supreme Court and the circuit courts of appeals pertained to the review of Commission orders to cease and desist while those in the district courts were injunctive proceedings. (See below.) Petitions by respondents for review of Commission orders in 7 cases were dismissed by the circuit courts of appeals. As to the two matters adversely decided, a Commission order was set aside in one case in a circuit court of appeals, and the Supreme Court in another case affirmed a decision of a circuit court of appeals reversing a Commission order.

Among the court cases were proceedings in which the circuit courts affirmed Commission orders prohibiting misleading advertisement of so-called 6 percent installment plans for the purchase of automobiles; unlawful cooperation by six California lumber associations to control lumber distribution; unauthorized use of a well known trade name by a chain organization selling radio sets; agreements in restraint of trade in the sale of candy bars to the vending machine trade by two of the largest chocolate candy bar manufacturers and the three largest vending machine operators, and pricefixing agreements among a group of southern manufacturers of fruit and vegetable containers. The circuit courts also sustained the Commission in its fifth proceeding to prevent the payment or receipt of brokerage fees or allowances in violation of the Robinson

Patman Act and fined another respondent $500 for violation of a court decree enforcing a Commission order based on the brokerage provision of that act. In two proceedings concerning so-called "style piracy" in women's apparel the Commission's orders were affirmed by the Supreme Court. In a case against a Chicago candy company the Supreme Court, by a 5-to-3 decision, set aside the Commission's order prohibiting the intrastate sale of lottery assortments of candy which injuriously affect interstate commerce.

Injunctive proceedings.-The injunction cases in the United States district courts, as above mentioned, were instituted to stop the false advertisement of certain products alleged to be detrimental to public welfare, pending issuance of the Commission's complaints and its final disposition thereof. Under the Federal Trade Commission Act, the Commission concluded 12 suits for injunctive relief from false advertising. All of the injunctions sought were granted. The products involved in these cases were either medicinal preparations or devices alleged to be dangerous to public health. (For details, see p. 102.)

Civil penalties.-Under the authority of the Federal Trade Commission Act, the Commission certified the facts concerning 9 alleged violations of cease and desist orders to the Attorney General. The Government had collected, or was collecting, at the close of the fiscal year, $12,290 in civil penalties from 10 defendants whose cases had been determined during the fiscal year. (For details, see p. 105.)

Foreign trade work.-Forty-five export trade associations were organized and operating under the Export Trade (Webb-Pomerene) Act and had their papers on file with the Commission at the close of the fiscal year. Exports by Webb law groups in 1940 totaled more than $307,350,000 which was about $70,000,000 more than in 1939, the increase having been due largely to a greater shipment of metal products. The associations report that experience during the last year emphasized the advantages to be gained by group action in export trade. As a central organization, the Webb law association was enabled to keep abreast of the situation resulting from swiftly moving events in Europe, and to carry on the increasingly complicated business of accepting orders, allocating them among its members, and giving valuable assistance in the effort to ship goods abroad.

Radio and periodical advertising.-The Commission examined about 377,800 newspaper, magazine, and other periodical advertisements and more than 871,900 commercial radio broadcast continuities, of which more than 25,000 advertisements and over 24,500 continuities were marked for further study as containing representations that might be false or misleading. Questionnaires concerning pos

sibly misleading representations in advertising were sent to advertisers in 374 cases and to advertising agencies in 19 cases. The Commission accepted from advertisers and other 234 stipulations to cease certain representations in radio and periodical advertising

matter.

Medical advisory service.-The Commission maintains a Medical Advisory Service consisting of a medical director and two medical assistants, who perform advisory services in matters pertaining to the validity of claims made in cases embracing the advertisement of food, drugs, devices, and cosmetics instituted under the Federal Trade Commission Act.

TRADE PRACTICE CONFERENCE PROCEDURE

The trade practice conference work of the Commission is concerned with the holding of industry conferences and the establishment and observance of fair trade practice rules. Under such procedure various practices in an industry which are deemed to be harmful or unfair are examined into and rules provided for their elimination, to the end that the business of such industry may be conducted under free and fair competitive conditions and that the public, as well as the industry, may be protected from such harmful and unfair acts. By means of this procedure members of an industry are afforded opportunity and a practical method for joint action in cooperation with the Commission in a definite, supervised program to eliminate unfair and unlawful methods of competition and other trade abuses, and to receive official guidance and help in self-correction and voluntary endeavor to maintain competitive practices in their industry on a high plane of ethics and fairness.

Industry trade practice rules promulgated during the fiscal year, together with those remaining in effect from prior years, form in the aggregate a codified body of trade practice provisions and business ethics constituting a valuable guide to industry and an effective influence in maintaining the conduct of business on principles of fair competition.

WOOL PRODUCTS LABELING ACT

The Federal Trade Commission is the administrative and enforcement agency of the Wool Products Labeling Act, an informative labeling statute which became effective July 14, 1941. As stated in its title, this act is designed "to protect producers, manufacturers, distributors, and consumers from the unrevealed presence of substitutes and mixtures in spun, woven, knitted, felted, or otherwise manufactured wool products, and for other purposes." The Commission is authorized thereunder to issue rules and regulations for the admin

istration and enforcement of the act. Such regulations have been promulgated thereby affording those subject to the requirements of the act full information as to the manner and form of compliance.

A primary objective of the act is the protection of the consumer and the safeguarding of fair practices in merchandising against the evils which flow from concealment of material content. The act undertakes to bring to the public, to business, and to all concerned, a substantial measure of the benefits of informative labeling.

The act and rules and regulations thereunder require that a wool product, unless exempt under the provisions of the act, shall be labeled clearly to show by percentages its fiber content, exclusive of ornamentation not exceeding 5 percent, when introduced, manufactured for introduction, or sold, transported, or distributed in commerce, as the term "commerce" is defined therein. If nonfibrous loading, filling, or adulterating matter is contained in the product, the percentage of such must also be disclosed.

A wool product is defined as any product, or any portion of a product, which contains, purports to contain, or in any way is represented as containing "wool," "reprocessed wool," or "reused wool." The percentage of "wool," "reprocessed wool," and "reused wool" must be specified and the percentage of each other fiber constituting 5 percent or more of the total fiber weight of the wool product must also be specifically stated. The aggregate of fibers present in a proportion of less than 5 percent is also to be stated.

In addition to the required content information, the label must show the name of the manufacturer of the wool product, or the name of the wholesaler, jobber, or other person subject to section 3 of the act with respect to such product, or the name of a dealer or reseller of the product together with the manufacturer's registered identification number as provided in Rule 4.

Violations, constituting "misbranding" under the act, are subject to correction by cease and desist order of the Commission, entered after hearing in required legal proceeding. Misdemeanor proceedings in respect of willful violations are provided for; also injunctive and libel actions in court where necessary to protect the public. Manufacturers of wool products are required to maintain proper records showing the content as required by the act of all wool products made by them.

GENERAL INVESTIGATIONS

Commission general investigations initiated or in progress during the fiscal year related to (1) corporation reports, (2) distribution cost accounting, (3) distribution methods and costs, (4) resale price maintenance, (5) furniture prices, costs and profits, and (6) mass food distributors.