10 ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION, 1949

Cases in the Supreme Court of the United States and in courts of appeals in which the Commission was a party totaled 18. Rulings favorable to the Commission were obtained in two cases in the Supreme Court and in six cases in courts of appeals. There was one court of appeals decision adverse to the Commission, and, by agreement of the parties, another case was remanded to the Commission for rescission of the cease-and-desist order. As the fiscal year closed, there were eight cases pending in courts of appeals, one in the Supreme Court. Judgments for the Government were obtained in three suits for civil penalties for violation of Commission orders to cease and desist, while two such cases were pending in the courts at the end of the fiscal year. In two cases in which the Government sought mandatory injunctions and recovery of forfeitures in connection with the failure of two corporations to file special reports demanded by the Commission, the complaints were dismissed in a district court, and these decisions were affirmed on appeal."

Trade-practice rules were promulgated for these industries: Handkerchief, yeast, oil heating (New England), trade pamphlet binding (New York), and rayon, nylon, and silk converting. Existing rules for the cotton-converting industry and the baby-chick industry were revised and extended. Conferences were held for 12 industries, while public hearings on proposed rules involved 11 industries.

Administration of the Wool Products Labeling Act included field inspections of more than 26,000,000 articles subject to the provisions of the act. These activities concerned the labeling practices of 9,781 manufacturers, distributors, and other dealers in wool products.

The Commission conducted several investigations into the operations of export associations organized under the Export Trade Act. Investigation of the Pipe-Fittings and Valve Export Association was completed, and recommendations for the adjustment of its business were issued. There were 45 export associations registered with the Commission at the close of the fiscal year.

Two petitions for cancellation of trade-marks were filed with the Commissioner of Patents by the Commission in the discharge of its duties under the Trade-Mark Act of 1946, which became effective July 5, 1947. Recognizing the need for curtailing a trade-mark monopoly under certain conditions, the 1946 statute designated the Federal Trade Commission as the agency to petition for relief in the public interest.

Under the Trade-Mark Act, the Commission is authorized to petition the Commissioner of Patents for the cancellation, upon specified grounds, of the registration of trade-marks registered in the Patent

The Supreme Court subsequently agreed to review these decisions on writs of certiorari.

GENERAL INVESTIGATIONS

11

Office. Grounds upon which such action may be taken include circumstances constituting fraudulent procurement, illegal use of the mark after registration, and circumstances where the mark has become the common descriptive name for an article or process on which the patent has expired.

Attention was devoted during the year to another new field of activity-the application of the Federal Trade Commission Act and the Clayton Act to the interstate insurance business. Effective on the first day of the fiscal year, these statutes became applicable to the interstate insurance business to the extent that it is not regulated by State law. The Commission continued its study of State legislation to determine the impact of the limitation respecting State regulation.

Meanwhile, the Commission received a number of complaints and inquiries regarding possible violations of both the Federal Trade Commission Act and the Clayton Act in connection with insurance, and initiated several investigations which had not been completed at the close of the year. The charges range from misrepresentation to combination in restraint of trade. Practices in the mail-order insurance field were the subject of trade-practice conference proceedings. An industry conference was held, and the proposed rules were under consideration as the year closed.

GENERAL INVESTIGATIONS

The Commission completed two general investigations during the fiscal year and transmitted the resulting reports to Congress. They are entitled "The Concentration of Productive Facilities" and "The Fertilizer Industry."

In addition, the Commission, in conjunction with the Securities and Exchange Commission, issued a series of industrial financial reports, based on the financial operating statements of approximately 8,500 manufacturing corporations. Reports were issued for each quarter of 1948, and the reports for the first two quarters of 1949 were in preparation as the fiscal year closed.

During its existence the Commission has conducted nearly 150 general investigations and 370 cost studies. A majority of these general investigations were authorized by congressional resolutions, some were conducted pursuant to Presidential orders, a number were made at the request of other branches of the Government, and others on the

4 The Fertilizer Industry report was in the hands of the printer when this report went to

press.

'An alphabetical list and brief description of the investigations conducted by the Commission appear in the appendix, beginning at p. 118.

12 ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION, 1949

initiative of the Commission. 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, legislative or other corrective action.

Investigations conducted by the Commission have led, directly or indirectly, to the enactment of important laws, including the Export Trade Act, the Packers and Stockyards Act, the Securities Act of 1933, the Stock Exchange Act of 1934, the revised Federal Power Commission Act of 1934, the Public Utilities Holding Company Act of 1935, the Natural Gas Act of 1938, and the Robinson-Patman Antidiscrimination Act of 1936, which amended section 2 of the Clayton Act.

PUBLICATIONS OF THE COMMISSION

The Federal Trade Commission Act, section 6 (f), provides that the Commission shall have power "to make public from time to time such portions of the information obtained by it hereunder, except trade secrets and names of customers, as it shall deem expedient in the public interest; and to make annual and special reports to the Congress and to submit therewith recommendations for additional legislation; and to provide for the publication of its reports and decisions in such form and manner as may be best adapted for public information and use."

The publications of the Commission reflect the character and scope of its work and vary in content and treatment from year to year. Important among them are those presenting fact-finding studies, reports, and recommendations relating to general business and industrial inquiries. Illustrated by appropriate charts and tables, these books and pamphlets deal with current developments and trends in selected industries, and contain scientific and historical background of the subjects discussed. They have supplied the Congress, the executive agencies of the Government, and the public with information not only of specific and general value but of especial value concerning the need or wisdom of new legislation, to which they have frequently led. They have resulted also in corrective action by the Department of Justice and private interests affected. The Supreme Court has at times had recourse to them, and many have been designated for reading in connection with university and college courses in business administration, economics, and law.

The 43 volumes of Federal Trade Commission Decisions contain (1) the findings of fact, orders to cease and desist, and orders of dismissal issued by the Commission; (2) the stipulations accepted by the Commission wherein respondents agree to cease and desist from un

PUBLICATIONS OF THE COMMISSION

13

lawful practices; (3) the reports, conclusions, and recommendations of the Commission in Export Trade Act cases; and (4) the decisions of the courts in Commission cases. They constitute a permanent and authoritative record of the remedial measures taken by the Commission to stop violations of the laws it administers. The decisions establish for industry, business, and the individual the guideposts of fair competitive dealing. They also tell, case by case, the story of the multiplicity of unlawful practices which have been found to be detrimental to the public interest and of the accomplishments of the Commission in the prevention of such practices.

Decisions of the Federal courts reviewing Commission cases also are published from time to time in separate volumes and may be purchased from the Superintendent of Documents, Government Printing Office.

Trade practice rules, the Wool Products Labeling Act and the regulations thereunder, and the Rules of Practice before the Commission are published in pamphlet form and may be obtained from the Commission without charge.

The following publications were issued during the fiscal year:

Annual Report of the Federal Trade Commission for the Fiscal Year Ended June 30, 1948. House Document No. 7, Eighty-first Congress, first session, January 18, 1949, 141 pages. Available only from the Superintendent of Documents, Government Printing Office, Washington 25, D. C., at 30 cents a copy while the supply lasts.

Trade Practice Rules for the following industries: Baby Chick Industry (revised and extended), September 15, 1948, 21 pages; Trade Pamphlet Binding Industry of the New York City Trade Area, December 31, 1948, 5 pages; Rayon, Nylon, and Silk Converting Industry, February 11, 1949, 11 pages; Handkerchief Industry, February 18, 1949, 10 pages; Cotton Converting Industry (revised and extended), May 17, 1949, 8 pages; Oil Heating Industry of the New England States, June 30, 1949, 9 pages; Yeast Industry, June 30, 1949, 8 pages. All rules available from the Federal Trade Commission without charge while the supply lasts.

The Concentration of Productive Facilities, 1947-Total Manufacturing and 26 Selected Industries, June 30, 1949, 96 pages. Available only from the Superintendent of Documents, Government Printing Office, Washington 25, D. C., at 25 cents a copy while the supply lasts. The Fertilizer Industry, June 30, 1949, 100 pages (estimated). Now in the hands of the printer. Copies will be available only from the Superintendent of Documents, Government Printing Office,

14

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION, 1949

Quarterly Industrial Financial Report Series for all United States Manufacturing Corporations, second, third, and fourth quarters of 1948. Copies are available from the Federal Trade Commission and the Securities and Exchange Commission without charge while the supply lasts.

Rates of Return (after Taxes) in Selected Industries for the years 1940 and 1947, August 16, 1948. Copies are available without charge from the Federal Trade Commission while the supply lasts.

Rules, Policy, Organization and Acts, May 11, 1949, 223 pages. Copies are available from the Federal Trade Commission, Washington 25, D. C., without charge.