In addition to the above examples of orders issued in the fiscal year, two partners trading as Fisher & DeRitis (Docket 5944) were, on September 23, 1953, convicted of violation of the Wool Products Labeling Act in connection with the sale of so-called "torch sweaters" which were made of brushed rayon but were represented as being made of wool. This, a criminal case, was brought under section 10 of the Wool Products Labeling Act. The proceeding was instituted by the United States Attorney's Office after referral by the Commission, which had previously ordered the parties to stop representing that sweaters and other garments made of brushed rayon were made of camel's hair or any other type of wool.

CEASE-AND-DESIST ORDER

COMPLIANCE

This work of the Commission constitutes a crucial phase of the application of its mandatory law-enforcement powers. In 1947, a special division under the General Counsel was established to obtain compliance with orders to cease and desist, and to enforce such orders by initiating appropriate proceedings in the Federal courts when voluntary compliance could not be obtained.

During the fiscal year, steps were taken to revitalize this program to achieve an adequacy of the service commensurate with its importance. The program involved a followup of each cease-and-desist order issued by the Commission. These orders require the filing of a report of compliance stating in detail how objectionable business activities have been adjusted and revised to meet requirements of the order and the law.

When respondents do not voluntarily comply, civil suits are brought in the various United States district courts, seeking penalties for violations of the orders as provided by the statute. In Clayton Act cases, where there is no provision for the institution of penalty suits, once the order has been affirmed and enforced by one of the courts of appeals, proceedings for contempt are initiated for violations of court decrees.

Since the division was established, civil penalty judgments aggregating $222,000 have been obtained.

ATTENTION TO OLD ORDERS

Before the division was established approximately 4,000 cease-anddesist orders were issued by the Commission. Prior to fiscal year 1954, the division focused its attention entirely on initial compliance with current orders and occasional complaints of violations of old orders the latter being insignificant in number. There was no information on whether approximately 4,000 old cease-and-desist orders were being obeyed. A substantial number of these were directed against evils found in many of the country's most vital industries, such as industrywide price fixing, restraint of trade, and discriminatory

practices violative of law. No investigation or examination had been made into the current state of compliance with such orders.

A basic function of the Commission-the stopping of monopolistic evils in their incipiency and adequate regulation and preservation of competition cannot be achieved to any satisfatcory degree, other than by systematic and intelligent attention to full compliance with its orders to cease and desist. Accordingly, on June 10, 1954, the Commission approved the recommendations of a special committee, appointed September 1953, calling for systematic and selective review,. screening and proper enforcement. It proposed to give highest priority to compliance work. This survey has been begun and a pattern established for screening procedures to coordinate necessary attention, not only to these orders, but to some 8,000 stipulations and 190 sets of trade practice conference rules, to assure uniformity in the requirements imposed on respondents. Supplemental reports of compliance on old orders were being requested at a rate of approximately 100 a month.

During the fiscal year 1954, attention was given to 857 compliance matters: "Matters" consist of (a) reports of compliance for processing; (b) complaints of alleged violations of orders; (c) conference and opinions regarding compliance; and (d) initiating and processing preliminary inquiries into compliance.

ANTIMONOPOLY COMPLIANCE CASES

During the year, 249 reports of compliance with orders against restraint of trade, monopolistic tendencies, and discriminatory practices were processed. Illustrative of their variety and scope was one relating to bakery packaged food products, terminating price discrimination by the largest manufacturer, whose production represents about 50 percent of the entire output in the industry; another relating to canned Alaska salmon, prohibiting price-fixing activities among 41 canning companies, their trade association and 8 labor unions whose membership included salmon fishermen; another relating to dental supplies, directed against a conspiracy in restraint of trade among a trade association and its 144 members who controlled 75 percent of the Nation's production and distribution of such supplies; another relating to iron and steel products, prohibiting price-fixing and discriminatory practices in the sale and distribution of steel on the part of 90 manufacturers involving virtually the total steel output of the United States; another relating to portland cement, directed against a trade association and 74 cement manufacturers accounting for threefourths of the total capacity in the industry who were engaged in an industrywide price-fixing conspiracy; and another relating to clay sewer pipe, terminating a price-fixing combination among 17 manu

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facturers who operate 25 plants, or about one-third of such plants operating in the United States, for the manufacture and distribution of clay sewer pipe, an important item in modern building construction and community development.

DECEPTIVE PRACTICE COMPLIANCE CASES

During the year 344 reports of compliance were processed in cases dealing with practices found to be false, misleading and deceptive. Also, 174 complaints of violation of orders were reviewed and appropriate action taken. Orders relating to wool products, lotteries, medicinal preparations, correspondence schools and household appliances were among those receiving consideration.

ADVERTISING TASK FORCE

To facilitate checking up on compliance with orders, stipulations and rules relating to advertising, a special "task force" of attorneys was designated. The mission of this unit was to examine national and regional advertising by respondents subject to orders, stipulations, and rules.

COMPLIANCE CASES IN FEDERAL COURTS

During the year one penalty complaint was filed in U. S. v. Coradio, Inc., et al. (D. C. N. J.). The complaint charged violations of an order prohibiting misrepresentations in the interstate sale of coinoperated radios for use in hotels and other public establishments.

Civil penalty suits concluded during the year were:

(1) U. S. v. Westville Oil and Manufacturing, Inc. (N. D. Ind.). Judgment entered July 24, 1953, for $1,750 for violation of an order requiring an affirmative disclosure that motor oil sold by defendant previously had been used.

(2) U.S. v. Shapiro Felt Rug Company, et al. (D. C. N. J.). Judgment of $1,200 entered December 28, 1953, for violation of an order requiring defendant to disclose that millinery products were made of previously used materials.

(3) U. S. v. National Titanium Company (S. D. Calif.). Judgment of $4,000 entered March 18, 1954, for violation of an order requiring proper labeling and advertising of paint containing used materials.

(4) U. S. v. Shelbrooke Coats, et al. (S. D. N. Y.). Judgment of $1,000 entered February 2, 1954, for failure to keep records as provided by the Wool Products Labeling Act and entry of a mandatory injunction compelling the keeping of such records.

(5) U. S. v. Lady Carole Coats, Inc., et al. (S. D. N. Y.). Judgment of $1,000 entered February 4, 1954, for failure to keep records as provided by the Wool Products Labeling Act and the entry of a mandatory injunction compelling the keeping of such records.

There were pending in the various United States District Courts as of June 30, 1954, civil penalty suits in the following cases based on the alleged violations indicated:

(1) U.S. v. Standard Education Society, et al. (N. D. Ill.). Violation of an order prohibiting false representations of encyclopedias. (2) U. S. v. United Diathermy, Inc. (S. D. N. Y.). Violation of an order prohibiting misrepresentations the therapeutic benefits of a diathermy device.

(3) U. S. v. Purofied Down Products Corp., et al (E. D. N. Y.). Violation of an order requiring labeling disclosure of used or secondhand feathers contained in pillows.

(4) U. S. v. Edward Lowenthal (N. D. Ill.). Violation of an order directed against the use of misleading "skip trace" materials for obtaining credit information concerning alleged delinquent debtors.

(5) U.S. v. Coradio, Inc., et al. (D. C. N. J.), supra.