Federal Trade Commission.

REMARKS

OF

HON. FRANCIS G. NEWLANDS,

Thursday, June 25, 1914,

On the bill (H. R. 15613) to create an interstate trade commission, to define its powers and duties, and for other purposes.

FEDERAL TRADE COMMISSION.

The VICE PRESIDENT. The morning business is closed. Mr. NEWLANDS. Mr. President, at the close of my remarks it is my purpose to move that the Senate proceed to the consideration of the bill (H. R. 15613) to create an interstate trade commission, to define its powers and duties, and for other purposes. I desire to be very brief, and I shall ask at the commencement permission to print certain quotations and references which I shall make.

The VICE PRESIDENT. Without objection, that may be done. Mr. NEWLANDS. I will also ask that there be no interruption until the close of my remarks.

SPEEDY ACTION DESIRED.

I am exceedingly desirous, Mr. President, to expedite action upon this bill. All the Members of the Senate, I am sure, unite with me in the desire for an early adjournment. There ought not, in my judgment, to be any protracted discussion over the bill. A measure of this kind has been the subject of prolonged consideration in the Senate of the United States through its Interstate Commerce Committee for several years and has been thoroughly debated in the committee and measurably debated on the floor of the Senate.

It has been the subject of concentrated attention by the Interstate Commerce Committee during the last five or six months. It has been also the subject of concentrated consideration by the other House and its committees during the same period. At the very commencement of the session the chairman of the Interstate Commerce Committee of the Senate and the chairman of the Interstate Commerce Committee of the House, which was supposed at that time to have jurisdiction over all trust legislation, came into communication with each other regarding tentative bills, one covering a trade commission, another supplementary legislation to the antitrust law, and the other a bill providing for the control of the issue of railway securities. Tentative bills were prepared and were submitted after the Christmas holidays to the consideration of the Senate committee and the House committees.

THE TENTATIVE ANTITRUST BILLS.

In January last the President of the United States delivered a message upon this subject, and still later on an interstate

trade-commission bill was introduced on the same day by the chairman of the Judiciary Committee of the House and the chairman of the Interstate Commerce Committee of the Senate. With reference to this bill, Mr. Clayton caused to be published in the CONGRESSIONAL RECORD on the 22d day of January, 1914, the following press dispatch:

Representative Clayton this afternoon gave to the press the full text .of the tentative bill as agreed upon by a subcommittee of the Judiciary Committee of the House (Messrs. Clayton, Carlin, and Floyd of Arkansas) and the majority members of the Senate Committee on Interstate Commerce, and said:

The bill will be introduced at the same time by Representative Clayton and Senator Newlands. This bill is modeled after the lines of what is commonly known as the Newlands bill, which was introduced in the Senate by Senator Newlands, and involves the funda mental idea that a trade commission shall be created, consisting of five members, with full inquisitorial powers into the operation and organization of all corporations engaged in interstate commerce, other than common carriers. It provides for a commission of five members, makes the Commissioner of Corporations chairman of the board and transfers all the existing powers of that bureau to the commission. Its relation to the Attorney General's office and to the courts is advisory. Its principal and most important duty besides conducting investigations will be to aid the courts when requested in the formation of decrees of dissolution, and with this end in view it empowers the courts to refer any part of pending litigation to the commission, including the proposed decree, for information and advice."

Senator NEWLANDS, being interviewed, said:

"The trade-commission bill and several other bills limiting the debatable ground of the Sherman Act have been the subject of labori ous consideration by a subcommittee of the Judiciary Committee of the House (consisting of Mr. Clayton, chairman, and Messrs. Carlin, and Floyd of Arkansas) during the holidays and before. The majority members of the Interstate Commerce Committee of the Senate have been brought into consultation with them of late.

The trade-commission bill preserves the essential features of the bill which I have been urging for some time, but contains amendments and additions of value and is, in my judgment, an improvement upon the bill as it was considered and improved by the Interstate Commerce Committee of the Senate during the last Congress. As a whole, I should say that the trade-commission bill ought to be satisfactory to members of all parties, for it is distinctively progressive, and we have endeavored to frame it in harmory with the President's views, presented in an admirable message, which has received the approval of the entire country regardless of party. While these bills represent at present the best thought of the participants in the shaping of this legislation, they are presented simply as tentative measures, upon which the judgment of the proper committees of the House and Senate and of the country is invoked."

The House bill, introduced by Mr. Clayton, was not, however, referred to the Judiciary Committee, but to the Interstate Commerce Committee of that body. Later on, Mr. COVINGTON, of the latter committee, introduced a bill covering substantially the same lines as the so-called Clayton bill, which was considered, amended, and finally reported, and passed.

Contemporaneously the Senate Committee on Interstate Commerce had under consideration Senate bill 4160, the bill introduced by myself, and, after considering and reporting favorably this bill as amended, took up the House bill which was referred to it, and substituted for it the Senate bill with. two amendments-one relating to the investigation of foreigntrade practices and the other relating to unfair competition. The question now before the Senate is whether the substituted Senate bill shall pass?

PUBLIC OPINION IN FAVOR OF A TRADE COMMISSION.

During these six months all these questions have been the subject of discussion by the country generally, by public men, by chambers of commerce, and by boards of trade. The result

is an overwhelming public opinion in favor of the adoption of an interstate trade commission bill. That public opinion was demonstrated by a referendum made by the Chamber of Commerce of the United States, a large national organization having member bodies in every section of the country. The result of that poll was to show a decisive majority in favor of a trade-commission bill. Public opinion was so pronounced upon the subject that when the bill in the other House came to a vote it passed, I believe, without a roll call, both sides of the House being in favor of the bill.

I may say that in both the House and the Senate the consideration of this legislation has been nonpartisan, prominent members of the minority party joining actively with those of the majority party in the shaping of an effective measure, and the proposal of a trade commission received the approval of the entire committee of the House of Representatives, with perhaps one dissent, and the almost unanimous judgment of the Senate Committee on Interstate Commerce. I may say further, so far as the action of the Senate is concerned, that under the preceding administration of Mr. Taft a resolution was offered by the Senator from Minnesota [Mr. CLAPP] for an investigation as to whether any further trust legislation was desirable. Under that resolution over 100 persons appeared before the committee-public men, economists, and business men, representatives of boards of trade and chambers of commerce-and gave their views, which extended to nearly 3,000 pages. Upon the very first day of the hearing of that committee under the resolution a bill introduced by myself some time previously for the creation of a trade commission was considered. That bill went through a process of tentative amendment by the committee, but no final action was taken upon it, and no final action was taken upon any of the many bills then pending upon this subject before the Interstate Commerce Committee, but a report was made by the committee.

ACTION ON BILL THUS FAR NONPARTISAN.

The Senator from Iowa [Mr. CUMMINS] made that report, and the additional views of many of the committee accompanied it. After reviewing the various decisions of the Supreme Court relating to the Sherman antitrust law, that report declared it to be the opinion of the committee that a trade commission was desirable. The report filed with this bill contains in the appendix extracts from the Cummins report, and also extracts from the additional views of the members of the Interstate Commerce Committee. I refer to this in order to show that under two administrations the creation of an interstate trade commission has been regarded as a necessary and essential thing in all legislation relating to the trust question. I shall insert the entire report at the conclusion of my remarks.

Mr. President, the practical question is whether upon a subject concerning which the mind of the country is made up, the mind of the chambers of commerce and of the boards of trade of the country is made up, the business mind of the country is made up, the mind of the committees having jurisdiction is made up, the mind of Congress itself is made up-whether we shall have a protracted discussion of this bill embracing the prolonged conversations which have characterized of late years the debates in the Senate, and which have brought them under

discredit. The country does not listen to us, and we do not listen to each other. I believe there is an opportunity here and now for the Senate to reestablish its old repute for clear and concise debate.

Mr. President, I am aware that I am one of those who perhaps may be charged in the past with an overindulgence in speech. All that I can say is that I have reformed. [Laughter.] When I came into this body, after 10 years' service in the House of Representatives, I flattered myself that I had the faculty of saying everything that I desired to say within an hour's speech. That was the result of the training of the House, and of my legal training, which imposed restraints upon prolonged discussion. I found myself, however, yielding gradually to the indulgence of the Senate, and, to my surprise, I discovered that one day I had made a three-hours' speech. I determined from that hour to reform, and I do not think my associates have had occasion to complain of late of any excess of oratory upon my part.

Now we are nearing the close of the session, or what ought to be the close of the session, and the question is whether the Senate will put restraint upon itself. Has it the power of self-restraint, or will we have to subject the Senate later on to the power of coercion through a cloture rule? We have been in pretty nearly continuous session for four years, much to our own discomfort and much to the discomfort of the Nation, and I think that every Senator on this floor will bear me out in the assertion that we could have dispatched the business in one-half the time.

We had recently an example of how quickly the Senate can dispatch business in the adoption of the conciliation bill reported from the Committee on Interstate Commerce. A great strike was threatening; a tie-up of the eastern railroads was impending; the country was apprehensive regarding the financial and industrial consequences of such a strike; the then existing machinery for conciliation between employers and employees was not satisfactory, and neither side was willing to resort to it. The result was that a bill was framed and presented by the Interstate Commerce Committee to this body. That bill offered a most tempting field for discussion. All the questions relating to labor, to the relations of employers to employees, and all the related social and economic questions afforded enticing opportunities for debate; but the patriotic sense of the members of the Interstate Commerce Committee of the Senate controlled them, the patriotic sense of this body controlled it, and that bill was put through almost without debate in less than an hour, I think-an instance of how the Senate can do business when it chooses to do business, and how it can do business without the coercion of a cloture.

THE TRUST PROGRAM.

Mr. President, there are three measures pending embraced in the so-called trust program. It is admitted by all that this measure should pass first. Some of the subsequent legislation intrusted to the Judiciary Committee may involve the enforcement of the law through this very trade commission. How important it is therefore that we should avoid unnecessary discussion, so far as this bill is concerned and put it upon the statute books, so that the legislation which comes from the

Judiciary Committee may have reference to the legislation that has been already adopted.

Mr. President, this is a very simple bill. I think the entire Senate is convinced that if contemporaneously with the passage of the Sherman antitrust law we had created a trade commission similar in its organization to the Interstate Commerce Commission, which was created about the time that law passed, by this time the questions relating to trade regulation would have been as completely settled as have been those relating to transportation.

In transportation we have practically only two things remaining unadjusted-though always, of course, there will be minor matters of legislation-one, the valuation of the railroads, for which provision has been made by law; and the other, control of stock and bond issues. All other legislative questions relating to rates, rebates, unjust discriminations, and so forth, have been practically adjusted-a body of administrative law has been established which is a definite guide to the business and transportation interests of the country.

The Sherman law was passed about the same time as the interstate-commerce act; and its administration was intrusted to the shifting incumbency of the Attorney General's Office, that incumbency changing frequently, having changed in one administration three or four times. The result was that instead of having an established system of administrative law the administration of that law was intrusted to the shifting officials with the varying policies and varying views of the respective Attorneys General; and it is only recently that we have obtained from the courts a full exposition, declaration, and interpretation of the law itself. Had this commission been in existence during all the years of the Sherman antitrust law it is clear that the organization of these great trusts, since accomplished, would have been prevented, and all of the trusts then existing would have been brought under the steady, purposeful, continuous administration of the law, and without violent wrenches in the business of the country readjustments would have been made that would have resulted in the dissolution of these corporations and their reintegration in harmony with the law. We are taking up very late what ought to have been taken up 20 years ago. If that is apparent why should we take a month in debating this bill?

PROVISIONS OF THE BILL; THE COMMISSION.

What does this bill provide for?

It provides for a commission of five members, whose term is seven years, the incumbency being so arranged that only one commissioner changes at a time, so that you have practically a continuous body considering these great questions. The bill provides for the merger in this commission of all the powers, duties, and functions, as well as the force of the Bureau of Corporations, a bureau which has been in existence for about 10 years, which has done much good work of investigation, and which has a trained band of experts whose experience and efficiency should, of course, be availed of.

POWERS OF THE COMMISSION.

The next thing is the powers of this commission. Almost all these powers-I may say all the powers—are contained in sections 3 and 5. The first three subdivisions of section 3