1942: Federal Trade Commission

The Federal Trade Commission, an administrative agency of the Federal Government, was organized Mar. 16, 1915, as a result of the passage of the Federal Trade Commission Act, approved Sept. 26, 1914. This Act was amended Mar. 21, 1938. The Commission administers its own Act, Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, Section 3, 7 and 8 of the Clayton Act, the Webb-Pomerene or Export Trade Act and the Wool Products Labeling Act.

Legal activities of the Commission under its organic Act are largely concerned with the prevention and correction of unfair methods of competition and unfair or deceptive acts or practices. The sections of the Clayton Act which it administers deal with price and other discriminations, tying and exclusive dealing contracts, capital stock acquisitions which lessen competition or tend to create a monopoly, and interlocking directorates.

During the fiscal year ended June 30, 1942, 560 stipulations to cease and desist from practices in violation of the Acts administered by the Commission were accepted by it and 249 formal complaints were issued. Upon trial of a complaint the Commission may sustain the charges and issue an order to cease and desist; it may dismiss the complaint; or it may close the case without prejudice. The Commission issued during the year 250 orders to cease and desist.

The Wool Products Labeling Act is designed (in the words of the title of the Act) '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....' During the war emergency, the enforcement of this Act tends to prevent the break-down of price control in woolen textiles by reason of lowered quality standards.

The Export Trade Act is for the promotion of export trade. It exempts associations of American exporters engaged solely in export trade from the provisions of the antitrust laws under certain restrictions. At the close of the fiscal year, 49 export trade associations had papers on file with the Commission.

General economic investigations are made by the Commission from time to time under the powers granted it in Section 6 of its organic Act. Approximately 125 of these have been made since its organization.

Trade practice conferences are held to establish, subject to the Commission's approval, rules to prevent unfair methods of competition and other unfair trade practices or trade abuses. During the fiscal year, the Commission promulgated trade practice rules for five industries.

During the calendar year the Commission, in addition to its regular work, made many special inquiries and studies designed to aid the war effort. These were made for such war emergency agencies as the War Production Board, the Office of Price Administration, and the Office of Economic Stabilization, as well as for the War and Navy Departments.

The Commission was designated by the War Production Board as an agency for investigating compliance by certain basic industries with the Board's wartime priority orders. In this capacity the Commission made investigations of the following industries: steel, copper and copper scrap, copper ingots, jewel bearings, silverware, chromium and nickel, aluminum foundries, users of tin, and manufacturers and wholesalers of quinine, covering altogether more than 3,000 companies. The Commission also furnished the Board, for a time, monthly reports with analyses and tabulations relating to rubber-products advertising to facilitate the Board's study of the nation's critical materials. The Commission made for the same agency a detailed survey of the metal-working machines industry and also investigated the purchasing and inventory practices of a group of prime Army-Navy contractors.

The Commission, at the request of the Office of Price Administration, continued its inquiries into industrial costs, prices, and profits. Paperboard, steel, phosphate rock mining and fertilizer industries were thus covered. It also furnished this agency data with respect to methods and costs of distribution for many groups of commodities, such as meats, canned fruits and vegetables, biscuits and crackers, packaged cereals, wholesale and retail groceries, carpets and rugs, and paints and varnishes.

Through its division for scrutinizing advertising for misrepresentation, the Commission furnished the Office of Price Administration, at its request, data respecting advertisements advising the public to 'Buy Now' and referring to rationing, price control or quality which might affect the nation's price or rationing programs. The survey included the advertising of many hundreds of magazines and newspapers printed in English and other languages and the advertising of many radio broadcasts.

Financial data on corporations, for the fiscal year 1940, operating in 86 principal industries, were compiled for use by the Office of Price Administration, War Production Board, and the War and Navy Departments. The operations of approximately 7,000 corporations were included.

The Commission, at the request of the House Naval Affairs Investigating Committee, assigned certain personnel to assist it in investigating the progress of the national defense program. In particular, the Commission personnel investigated production costs and methods of manufacturers engaged in the production of equipment for the Navy.

In the latter part of the year, at the request of the Director of the Office of Economic Stabilization, the Commission made a study of the costs and profits of the flour milling and bread industries and suggested possible savings which might be made in their operation.