TO ENLARGE THE JURISDICTION OF THE FEDERAL TRADE COMMISSION UNDER SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT

FEBRUARY 6, 1935.-Ordered to be printed

Mr. WHEELER, from the Committee on Interstate Commerce, submitted the following

REPORT

[To accompany S. 944

The Committee on Interstate Commerce, to whom was referred the bill (S. 944) to amend section 5 of the Federal Trade Commission Act, having considered the same, report the bill back to the Senate with the recommendation that the bill do pass.

The object of the bill is the broadening of the Commission's jurisdiction so as to include unfair methods of competition affecting commerce and unfair or deceptive acts and practices in or affecting commerce. In many of its investigations the Commission has found numerous unfair methods of competition and numerous deceptive acts and practices, which, although done in intrastate commerce, seriously affect honest competitors engaged in interstate commerce. The Commission's jurisdiction, if any, under section 5 as it now stands, over these acts and practices is doubtful. The bill expressly extends its jurisdiction so as to prohibit them. Moreover, under the present act it has been intimated in court decisions that the Commission may lose jurisdiction of a case of deceptive and similar unfair practices if it should develop in the proceeding that all competitors in the industry practiced the same unfair methods, and the Commission. may be ousted of its jurisdiction no matter how badly the public may be in need of protection from said deceptive and unfair acts. Under this bill the Commission would have jurisdiction to stop the exploitation or deception of the public, even though the competitors of the respondent are themselves entitled to no protection because of their engaging in similar practices.

The text of the bill, with the additions to the present wording of section 5 in italics, is as follows:

Unfair methods of competition in or affecting commerce and unfair or deceptive acts and practices in or affecting commerce are declared unlawful.

The Commission is empowered and directed to prevent persons, partnerships, or corporations, except banks and common carriers subject to the acts to regulate commerce, from using unfair methods of competition in or affecting commerce and unfair or deceptive acts and practices in or affecting commerce.

The bill has been recommended by the Federal Trade Commission in the following letter:

Hon. BURTON K. WHEELER,

FEDERAL TRADE COMMISSION,

January 22, 1935.

Chairman Committee on Interstate Commerce of the Senate,

Washington, D. C.

SIR: This acknowledges receipt of yours of the 16th instant, enclosing copy of S. 944 referred to your committee, and advising that the committee would appreciate having the comment of the Federal Trade Commission on the proposed legislation.

I beg to advise that this amendment is identical with the one discussed and recommended in the conclusions and recommendations of the Federal Trade Commission contained in the report made to the United States Senate pursuant to Senate Resolution No. 224, copy of which report I am enclosing herewith. This copy is uncorrected proof, but the corrections will not in any way affect the factual parts of the report. The discussion mentioned may be found on page 94. By direction of the Commission.

Yours very sincerely,

EWIN L. DAVIS, Chairman.

The pertinent material on page 94 of the above-mentioned report is as follows:

A recommendation for amendment of the Federal Trade Commission Act seems essential as shown by the results of the chain-store investigation; namely, first, that the prohibition of unfair methods of competition in section 5 of the act be broadened so as to include unfair or deceptive acts and practices in interstate commerce, and, second, so that unfair methods, acts, and practices may be reached when they unfairly affect interstate commerce, regardless of whether the offender is engaged in commerce or the acts are done in the course of commerce.

PERMITTING MEMBERS OF INTERSTATE COMMERCE COMMISSION TO CONTINUE TO SERVE, UPON EXPIRATION OF TERMS OF OFFICE, UNTIL SUCCESSORS HAVE BEEN APPOINTED AND QUALIFIED

FEBRUARY 6, 1935.-Ordered to be printed

Mr. WHEELER, from the Committee on Interstate Commerce, submitted the following

REPORT

[To accompany S. 945]

The Committee on Interstate Commerce, to whom was referred the bill (S. 945) to amend sections 11 and 24 of the Interstate Commerce Act so as to permit interstate commerce commissioners to continue in office upon the expiration of their terms until such time as their successors are appointed and have qualified, having considered the same, report thereon and recommend that S. 945 do pass.

The purpose of this bill is to prevent annual vacancies in the Commission from disturbing the routine of the Commission's work. Under sections 11 and 24 of the Interstate Commerce Act the terms of one or more commissioners expire each year on the 31st day of December. When Congress convened on the first Monday in December, the President could submit to Congress an appointment for the term commencing January 1 and the Senate could act on the appointment before that date, with the result that no vacancy necessarily resulted. Since the passage of the twentieth amendment to the Constitution, changing the date for the convening of Congress to the 3d day of January in each year, there will be one or more vacancies in the Commission at the beginning of each year until after Congress convenes; and the Senate has had an opportunity to act upon the appointment, unless in the future the President determines to make recess appoint

ments.

Much of the work of the Commission is performed through divisions of three members each, and the existence of vacancies tends to disrupt the progress of the Commission's work.

In its forty-eighth annual report to Congress for the year 1934, at pages 79 and 80, the Commission recommended the amendment proposed by S. 945.

AUTHORIZING THE EMPLOYMENT OF A CHIEF ACCOUNTANT AND OTHER ACCOUNTING OFFICIALS AND EMPLOYEES BY THE FEDERAL COMMUNICATIONS COMMISSION

FEBRUARY 6, 1935.-Ordered to be printed

Mr. WHEELER, from the Committee on Interstate Commerce, submitted the following

REPORT

[To accompany S. 1336]

The Committee on Interstate Commerce, to whom was referred the bill (S. 1336) to amend paragraph (f) of section 4 of the Communications Act of 1934, so as to authorize the employment of a chief accountant and not more than three assistants, together with such accountants as may be necessary to the exercise of its functions, having considered the same, report thereon and recommend that S. 1336 do pass.

The object of this bill is to authorize the employment by the Federal Communications Commission a chief accountant and not more than three assistants.

Paragraph (f) of the Communications Act, authorizes a chief engineer and not more than three assistants and a general counsel and not more than three assistants, but makes no provision for a chief accountant or three assistants.

Under the Radio Act of 1927 the matters of rate making or rate regulation were not involved. Hence the chief need was for legal and engineering departments. The Communications Act, having provided for rate regulation and utility investigations, has created a need for an accounting department. The Federal Communications Commission in its report to Congress recommended an early amendment to the law so as to provide for this necessary department.