SPEECH

OF

HON. HENRY F. LIPPITT.

The Senate, as in Committee of the Whole, had under consideration the bill (H. R. 15613) to create an interstate trade commission, to define its powers and duties, and for other purposes.

August 4, 1914.

FEDERAL TRADE COMMISSION.

Mr. LIPPITT. Mr. President, until recently upright American business men regarded the American Government as their friend, and justly so, for the prosperity of industry was recognized by the Government as a necessity to all parts of the public. The officials of the Government were predisposed to assist in bringing it about. To help in creating and maintaining it was regarded as one of the first duties of Government employees. Thus, the Agricultural Department was devising means to help the farmers by scientific study of farm operations, by distributing reports of investigations, by special examinations where they were asked for. The Forestry Bureau was established to assist in bringing about better forestry methods; it studied the subject and sent its agents out to teach more scientific systems. In the same way our Consular Service was utilized. It began to gather information from foreign countries, and a most excellent and efficient system of daily reports was established to make the information available. The Pan American Union was established to promote Central and South American trade, to give aid and information to the exporters of this country, and to help them in extending their markets. Irrigation projects of great importance were undertaken, holding out the promise of great benefit to the people of certain sections of the country. The construction of the Panama Canal was undertaken. All of these and other things like them created an atmosphere of friendliness and helpfulness

throughout the official world. Nothing perhaps contributed more to this official disposition than the established policy of protection, for the very basis of that policy is the belief that it is a proper function of the American Government to aid American industry. So, through all departments there was a spirit of helpfulness, and constructive legislation was the fashion of the time. Punishment, where punishment was necessary, was the function of the Attorney General and his staff, and was left to them to perform.

But recently this condition has changed. Circumstances arose that induced a different frame of mind. The Nation began to be very prosperous, a prosperity that was generally shared in by all occupations; the laborer, farmer, merchant, and manufacturer were all doing well, in most cases were But here and there a few were doing very well, indeed. doing better than the average, and perhaps unduly better. So some of us, overlooking our share in the general betterment, became a little envious and others became a little frightened-perhaps not altogether unjustified, but, like most human a vision of all tendencies, it was exaggerated. We saw wealth, and hence of all power, being gathered together into a few hands.

People began to counsel together as to what they should do about it. The public press, quick to respond to the thought of the day, found a profitable field in attacking wealth and its owners. The yellow newspapers and the muckraking magazines were the popular literature. Then Government officials began to have a different view; the idea of helping trade ceased to be the prevailing thought of official life. To discover and punish malefactors of great wealth was substituted for it. The Interstate Commerce Commission attended to the railroads. The Attorney General looked after the trusts, the departments gave all the help they could, and whatever suspicious thing the press and the Nation overlooked the States took a hand at. Congress has shared the spirit of the times. We have had investigating committees galore. The Steel Trust and the Tobacco Trust and the Money Trust and the stock exchange and the cotton exchange and the lobby have all been looked after, and we

have learned a great deal about a great many people. Then we thought that perhaps the tariff helped some Americans to get too rich, so we changed that, too, and turned some of our work over to the people of other countries to see how our people liked being without it.

And, in consequence of all this, many Government officials are acting as though they believed the successful detection of something improper or criminal was the only road to popularity, and as a result even the 99 per cent of honest and upright business men of the country have become afraid of the Government. They are suspicious of it, for the threat of something to come is in the atmosphere. So they are hesitating about going ahead. They are waiting to see what is going to turn up and, as a result, initiative is paralyzed and progress halts. This movement was perhaps necessary to meet the situation that existed. There was a real danger to be met, but the methods that were used to meet it are destructive methods. They had to be; but, Mr. President, it is not good policy to go any further along that line than is absolutely necessary. We have already gone a long distance in that direction, and the business situation in this country is already showing signs that perhaps we have gone too far. We are a progressive people. We want to build things up, and we can not do that by unnecessarily hampering those processes of trade that the circumstances of our generation call into existence.

Nevertheless, it seems to me that it is in that frame of mind that this bill has been prepared, for it is a punitive bill throughout all its provisions. It proposes to establish what is practically a new department of the Government, in the form of a trade commission, but there is nothing in any part of the bill to suggest that this new department is to look for opportunities to help trade. On the contrary, it is establishing an extraordinarily clumsy instrument to rake over all the activities of commerce with a fine-tooth comb, subjecting everybody engaged in it to inconvenience, annoyance, and expense, to see if somewhere or somehow some unsuspected wrongdoing can not be brought to light. It offers no helping hand to upright merchants. It is only adding a new and untried kind of police and

"trade

detective force to those we already have. The name commission," at first thought, suggests something helpful. We have an Agricultural Department, and it is the duty and practice of that department to help the farmer. This year's appropriation for that purpose is nearly $10,000,000. We have recently established a Department of Labor, and it is actively looking for opportunities to assist the laborer and make his lot easier. But there is nothing of this sort in the legislation now proposed. The commission is given the most extraordinary powers for investigating trade and manufacturing, but the sole purpose of that investigation is to discover something to punish.

I do not believe the establishment of such a commission is wise at this time, and I have come to this conclusion in spite of a former belief to the contrary. When I first came to this body in 1911 I was very strongly of the opinion that a trade commission of some sort was advisable. As a member of the Interstate Commerce Committee, almost from the beginning of my term, I have had this subject continually under consideration. That committee has held extended hearings on this subject at which a very large number of witnesses have appeared and given their views in regard to a commission, and in various ways that committee has had the subject of trade regulation before it during all this time. As a result of such consideration, I have changed my mind on this subject, and do not believe that the time has yet come when this legislation is necessary. I think that such a commission and such legislation as is now proposed, instead of doing anything to clarify the situation, will complicate it and that such a commission as is now proposed is extremely unwise. I am opposed to it because of the enormous and arbitrary powers which are intrusted to it, because the purposes for which these powers are to be used are not limited nor defined, because to confer such powers on such a body is dangerous and an infringement on the reasonable liberties and independence of the people, because the methods this commission are to use are a most roundabout and inefficient way to accomplish the purposes so far proposed for it, because it will be

most costly to the Government and to a far greater extent to the people themselves, and because it is unnecessary.

The attempt has been made to create a feeling that this commission is a harmless thing, that nothing particular is going to result from its creation, that it will be a sort of a good-natured body which, in a fatherly sort of way, will caution business men and in a friendly spirit take them under the arm when they have stumbled and gently lead them into the paths of righteousness. Thus, the distinguished Senator from Nevada, who has charge of this bill, says that "it is a very simple bill " and compares the powers of the commission with those of the Bureau of Corporations, to show how little they may be feared. In a speech introducing the bill June 25, speaking of its powers, he says:

Those powers are somewhat enlarged over those of the Bureau of Corporations, but they are not materially enlarged. The Bureau of Corporations did not find it necessary to use coercive powers with the corporations of the country. It used its power wisely and discreetly, and usually succeeded in getting all the information that it required. We heard of no abuse of personal rights under that organization, and I take it that the outcry raised against the so-called inquisitorial powers of this commission will be found in practical experience to have been unnecessary.

I find that the impression thus sought to be conveyed exists in the minds of many business men, and they are rather inclined to favor a commission on the ground that it will ward off something worse, but I do not agree that the Bureau of Corporations in the slightest degree offers an analogy to what the operations of this proposed body will be. If that view of the case is true, and this trade commission is to be nothing more than a slightly enlarged Bureau of Corporations, then all of us here are wasting our time, both those who advocate the measure and those who oppose it, and the consideration it has had by the trade organizations and the business men of this country is time thrown away, for great results will not be obtained by a powerless commission. Neither great regulative and beneficial results will be obtained, such as those favoring this measure hope for, nor will any of the dangers ensue that those people fear who see in it a tyrannical creation pursuing its course unhampered by the restrictions which have heretofore