Public recognition of the value of the trade practice conference work is evident from the tremendous increase in the number of industries resorting thereto. The procedure effects a great saving to the Government in law enforcement, and is of inestimable value to industry and the public in elevating the standards of business ethics and fair dealing. Our files as well as public writings contain many expressions as to benefits to the public and to business resulting from this activity. I should like to take the time, in concluding, to quote a brief excerpt or two as illustrative of such expressions. In a recent address of a prominent member of the New York bar who is high in the counsels of industry and has studied the subject, he states: "It (the Commission) has made a real contribution to the guidance of industry in the Trade Practice Conference Rulings approved under its present procedurewhich have been welcomed and approved by business men throughout the country." To quote another, the president of a large business concern writes: "We feel that these conferences on trade practices are the most vital and worthwhile work any department in Washington can render the commercial interests. They are most timely and we are deeply interested in the results to be obtained." COURT CASES Mr. AYRES. Mr. Chairman, I have here a list of cases that have been reviewed by the United States Court of Appeals, that had been handled by the Commission. They show that from January 1, 1933, to date, approximately 4 years, the Commission has won 40 cases in the Federal courts and lost but 1, and that by a 5 to 4 decision of the Supreme Court of the United States. I have here a list of these cases which with your permission I will put in the record. Mr. WOODRUM. You may put those in the record. (The list referred to is as follows:) COURT CASES Statutory provision is made for a review by the United States Court of Appeals of cases handled by the Commission. From January 1, 1933, to date (approximately 4 years), the Commission has won 40 cases in the Federal courts, and lost but 1, and that by a 5-to-4 decision of the Supreme Court of the United States. Two adverse decisions by lower courts were subsequently reversed by the Supreme Court. Furthermore, eight attempts have been made by respondents to obtain reviews (by writs of certiorari) by the Supreme Court of decisions by lower courts affirming the Commission's orders. These were all unsuccessful. A record of the cases from January 1933 to date, follows: Name of case 1. R. F. Keppel & Bro., Inc.1. 2. E. Griffiths Hughes.... 3. Algoma Lumber Co. et al. 4. Brown Fence & Wire Co.. 5. Arrow-Hart & Hegeman Electric Co.3.... 6. Warner I. Cubberly (lease and agency oil contracts). 7. Hoboken White Lead & Color Works.. 8. James B. Hall, Jr., Inc... 9. Edwin Cigar Co., Inc.. 10. Artloom Corporation. 11. E. J. Wallace.. 12. Inecto, Inc.... 13. Crancer-Fleischman. 14. George H. Lee Co.. 15. Maisel Trading Post.. See footnotes at end of table. 1 Commission's order reversed by third circuit. On appeal, the Supreme Court of the United States (Feb. 5, 1934) unanimously reversed the third circuit and sustained the Commission. * Commission's order reversed by ninth circuit. On appeal, the Supreme Court of the United States (Jan. 8 1934) unanimously reversed the ninth circuit and sustained the Commission. 3 Commission's order affirmed by second circuit. On appeal the Supreme Court of the United States (Mar. 12, 1934) reversed the second circuit by a 5-4 decision. Writs of certiorari were applied for by respondents (by one respondent twice) in these 8 cases. They were all denied by the Supreme Court. ENFORCEMENT OF CEASE-AND-DESIST ORDERS Mr. WIGGLESWORTH. The chief examiner referred to the matter of enforcement. Are you encountering any difficulty in that regard? Let us assume that you have found a firm is guilty of improper standards. Do you have any difficulty in getting them to live up to the orders that are issued? Mr. KELLY. As a general rule, no. Although we have had some contempt proceedings in the court. Five or 10 years ago we had a very important price-fixing case involving all of the paper products on the Pacific Coast. The case went to the Supreme Court and the Supreme Court of the United States affirmed the Commission's order, which was five or six paragraphs long, involving a lot of activities. About a year ago we received a number of complaints that they were violating that order. We made an investigation and we determined from that that they were. We filed a proceeding, a petition, in the Circuit Court of Appeals in San Francisco for them to show cause why they should not be adjudged in contempt. Just about a week ago a very large group of them came over for several days conferences with us looking toward a settlement of the matter without trial. I told them that I was not myself vindictive, and all I wanted was that the court should, commensurate with the public interest, take adequate measures. I went to the Commission with the matter, and I asked for authority to go before the circuit court of appeals in San Francisco and join with them on their answers, admitting the facts, leaving it up to the court, without suggesting any fine to the court, and stating to the court that all we asked was what was necessary and commensurate with the public interest involved. That was the biggest case that we have had to do with involving a wholesale violation of orders. There is a very large number of companies embraced under that order. But as a general rule, when the Commission issues an order it is lived up to, and if they do not live up to it, they appeal, and if they lose that appeal, they then live up to the order. It is not frequent that we have to proceed in contempt action against them. Mr. DAVIS. Congressman, if I may add further, there is a very small percentage of cases in which the Commission issues cease and desist orders where violations are reported. The same is true with regard to stipulated cases. They generally observe their stipulations and the violations are very small in number. Mr. WIGGLESWORTH. How many cease and desist orders has the Commission issued in the last fiscal year? If you do not know, put that in the record. Mr. JOHNSON. The Commission issued 161 cease and desist orders during the fiscal year ended June 30, 1936, as compared to 126 issued during the fiscal year 1935. Mr. WIGGLESWORTH. You spoke a year or so ago about some difficulty in the field of radio advertising. Has that been straightened out, or have you had some difficulty in bringing about a compliance with your orders in that field. Mr. DAVIS. There is no representative here from the special board which handles the radio advertising, but that is a continuing proposition, naturally, just like all these things are. The Commission through its staff is scrutinizing about 500,000 radio advertisements per year, and is setting aside and proceeding in such of them as it appears they are making false or misleading statements. Mr. WIGGLESWORTH. Have there been many of those proceedings? Mr. DAVIS. Well, there have been a good many, but they are generally adjusted by stipulation. There has been an improvement in that field, but there is still a considerable number. I should say possibly 10 percent of the advertisements scrutinized require further consideration; that is, they are either of a doubtful nature or obviously contain false statements. A further investigation is then made, and such action is taken as the facts warrant. RELATION OF DUTIES OF FEDERAL TRADE COMMISSION TO THOSE OF OTHER DEPARTMENTS AND COIMMSSIONS Mr. WIGGLESWORTH. In the opinion of any of you gentlemen, is there any overlapping between the work of your Commission and that of the Securities and Exchange Commission, or the Power Commission of any other Government agency that is functioning now? Mr. DAVIS. I know of no overlapping jurisdiction either with the Securities and Exchange Commission or the Federal Power Commission. There is a basis for some overlapping jurisdiction in some other respects. For instance, the Federal Trade Commission and the Department of Justice and the courts have concurrent jurisdiction over certain sections of the Clayton Act, for instance, and over certain phases of the Robinson-Patman Act. But that is theoretical only, because we are careful, both of us, not to proceed in the same case. Either we contact them or they contact us before a proceeding is instituted. If they have already instituted an investigation, we refrain, and vice versa. We do not have any conflict. You might say that there is some conflict, or there might be, with the Post Office Department who, of course, may issue fraud orders. They may even go in and prosecute criminally people mailing certain fraudulent matter, as well as obscene matter. Of course, we have jurisdiction of false and misleading representations in interstate commerce. But the same is true there. If they start an action, we refrain. The same situation obtains in connection with the Food and Drug Administration. We avoid conflicts in actual operation and there is practically no overlapping. There is just one other instance I want to mention, and that is this. When you passed the law creating the Alcohol Control Commission and defined what their powers and duties would be, they were given jurisdiction over unfair trade practices in that industry. But in order to avoid any conflict, we appointed a committee and they appointed a committee to confer with and to map out the work and keep off of each other's toes. And so up to date there not only has been no conflict or friction, but there has been perfect harmony and cooperation and we expect it to continue that way. CIVIL-SERVICE STATUS OF EMPLOYEES Mr. WIGGLESWORTH. To what extent is the personnel of the Commission now under civil service? Mr. JOHNSON. The Commission has a total personnel of 588. Of these 312, or 53 percent, are civil-service employees; and 276, or 47 percent, hold appointment to excepted positions. EXPENSE OF ATTENDANCE AT MEETINGS, ETC. Mr. WOODRUM. Mr. Johnson, will you put a statement in the record of your travel expenses for attendance at meetings authorized by the Commission? Mr. JOHNSON. The total expense during the fiscal year 1936 for attending meetings in connection with the business of the Federal Trade Commission amounted to $89.98, and covered trips as follows: August 1935: Commissioner Charles H. March-Trip to St. Paul, Minn., for conferences with officials of the milling and milk industries. $59. 79 March 1936: Commissioner Charles H. March-Trip to New York City for conference with members of the New York Board of Trade, section of drugs, chemicals, and allied trades... Mr. WOODRUM. Thank you, gentlemen. 30. 19 89.98 TUESDAY, DECEMBER 15, 1936. INTERSTATE COMMERCE COMMISSION STATEMENTS OF FRANK McMANAMY, JOSEPH B. EASTMAN, COMMISSIONERS; GEORGE B. McGINTY, SECRETARY, E. I. LEWIS, DIRECTOR OF VALUATION; NORMAN B. HALEY, DIRECTOR OF AIR MAIL; AND JOHN L. ROGERS, DIRECTOR BUREAU OF MOTOR CARRIERS Mr. WOODRUM. The committee will take up this afternoon the estimates for the Interstate Commerce Commission. Mr. McManamy, do you desire to make a general statement in reference to the items for the Commission? JUSTIFICATION OF ESTIMATES, 1938 Mr. McMANAMY. Mr. Chairman, to begin with, I would suggest that we incorporate the letter of the secretary of the Commission, dated December 1, 1936, addressed to the clerk of the Committee on Appropriations, which explains the estimates in detail. Mr. WOODRUM. We will insert that letter in the record at this point. (The letter referred to is as follows:) MARCELLUS C. Sheild, INTERSTATE COMMERCE COMMISSION, Washington, December 1, 1936. Clerk, Committee on Appropriations, House of Representatives, Washington, D. C. MY DEAR MR. SHEILD: In response to recent request of your office we are submitting herewith a statement (12 copies) showing by statistics the work of the Interstate Commerce Commission, not only for the 1936 fiscal year, but for the years 1932 to 1936, inclusive. Also in order that a comparison may be made with previous periods, we have included the representative years of 1906, 1910, 1915, 1917, 1920, 1921, 1923, 1926, 1928, and 1930. Also, 12 sets of the justifications and statements to accompany same. The work of the Commission for the past year is covered in its annual report to Congress, which will be transmitted to you as soon as it can be printed and released. In column 1 of figures below is the amount of our appropriation for 1936, in column 2, our appropriation for 1937, in column 3, our original estimate as submitted to the Bureau of the Budget for 1938, and in column 4, the Budget Bureau's estimate. (While we are not herein appealing for an increase over the Budget estimate we are following the practice of the past by showing the Commission's estimate to the Bureau of the Budget, arrived at by the Commission in conference, after giving full consideration to the subject of its future needs.) |