The Trade Commission Bill.

SPEECH

OF

HON. WILLARD SAULSBURY,

Friday, July 3, 1914.

A SUMMARY OF THE BILL.

Mr. SAULSBURY. Mr. President, I shall first endeavor to give a brief summary of the bill now before the Senate. It provides for a Federal trade commission composed of five members, provides machinery for its organization, and the taking over of all the records, work, and business of the Bureau of Corporations, which is abolished. Its employees, with the exception of two secretaries, one clerk for each commissioner, and attorneys and experts, are placed in the classified service. Other necessary machinery for the operation of the commission is provided.

The commission is empowered to investigate the organization, business, financial condition, conduct, practices, and management of corporations engaged in interstate commerce, other than common carriers and banks, and to require them to furnish information regarding said matters to the commission, which may prescribe a uniform system of annual reports regarding such corporations or classes of corporations as it may designate. The information obtained is only made public so far as the commission deems it of public importance, and the business of the companies investigated is protected so far as the infor mation obtained relates to trades processes, names of customers, and other distinctly private matters.

Where suits have been brought by the Attorney General and the court finds for the complainant, it may utilize the commission as a master in chancery to have such hearings as may be necessary to settle the forms of decrees to be entered.

The commission is to report directly to Congress, and may submit recommendations for additional legislation.

If the Attorney General desires, it may investigate the manner in which any order or decree is being carried out or violated, and if it obtains any information as to violation of the law regulating commerce, it reports its findings and the evidence to the Attorney General, with its recommendations, for such purpose having access to documents and writings of any corporation investigated.

The commission is directed to investigate expeditiously trade conditions in foreign countries where the export trade of the United States may be injuriously affected, and, like the Bureau of Corporations, its jurisdiction extends over all trade associations.

I am inclined to believe that this power to investigate foreign trade conditions affecting our export trade may prove very beneficial, both to our business men and in enabling us to efficiently regulate domestic trade through a complete understanding of foreign trade conditions.

The unfair-competition clause of the act is having such full discussion in the Senate that in the summarized statement I am now making it needs only to be mentioned.

Penalties are provided in the act for failure to file reports after 30 days' notice that a company is in default, and the willful destruction, alteration, or removal of documentary evidence. so that it is not available for proper use, is made unlawful, with appropriate penalties; and willful false entries in any book of accounts or record of any trade association, corporate combination, or corporation is made unlawful.

Heavy penalties are provided for any employee of the commission who divulges information without authority, and the commission is given all the powers possessed by the Interstate Commerce Commission to compel attendance and testimony of witnesses and production of evidence.

Power is conferred on the district courts to compel the compliance by any corporation, its officers and employees, with any order of the commission requiring the production of evidence, and other departments and bureaus of the Government are required to furnish the commission with evidence when so directed by the President.

A COMPARISON WITH THE HOUSE BILL.

Mr. President, having briefly summarized the whole bill, I think it will not be unprofitable to compare its provisions with the existing law regarding the Bureau of Cororpations and with the provisions of the House bill-the Covington bill-as it came to the Senate. Speaking generally, the only authority at present possessed by any Federal governmental agency to exercise any of the powers conferred by this bill on the Federal trade commission is lodged in the Bureau of Corporations of the Department of Commerce, with respect to industrial corporations engaged in interstate trade and in the Interstate Commerce Commission with respect to interstate carriers.

This bill has to do only with corporations engaged in interstate trade, which are not carriers or banks, and expressly so states. With respect to the corporations with which it deals it

is a distinct and somewhat far-reaching step in advance along the road to commission government.

The present Bureau of Corporations in the Department of Commerce was established by section 6 of "An act to establish the Department of Commerce and Labor," approved February 14, 1903. Therein it was provided that the Bureau of Corporations, with a commissioner of corporations as its head, should have power to make

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diligent investigation into the organization, conduct, and management of the business of any corporation, joint-stock company, or corporate combination engaged in commerce among the several States and with foreign nations, excepting common carriers and to gather such informatiion and data as will enable the President of the United States to make recommendations to Congress for legislation for the regulation of such commerce and to report such data to the President from time to time as he shall require.

The information obtained might be made public, should the President so direct, and the Commissioner of Corporations was given the same power to obtain evidence as was possessed by the Interstate Commerce Commission. The bureau was also directed to gather, compile, publish, and supply useful information concerning corporations doing interstate or foreign business, including insurance companies, under direction of the Secretary of Commerce and Labor.

A comparison of the powers provided to be exercised in the bill under consideration by the trade commission shows that all these powers, with the exception possibly of those relating to insurance companies, are included in the Newlands, or Senate, bill, in addition to others I shall hereafter refer to, and by section 3 of the Covington bill as it came from the House, are expressly vested in the trade commission bill therein provided for.

ADDITIONAL POWERS PROVIDED.

In addition to the authority given the Bureau of Corporations and the Commissioner of Corporations, both the Covington bill and the Newlands bill, following the trend of public sentiment, which has doubtless been greatly influenced by the eminently satisfactory way in which the Interstate Commerce Commission has performed its duties, propose to give additional powers to this new trade commission. The Newlands bill gives to the commission powers respecting all the corporations which were under the supervision of the Bureau of Corporations, while the Covington bill circumscribes the scope of the commission's activity by limiting its authority to obtain reports, under section 9, to those corporations which have capital of not less than $5,000,000, or, having less capital, belong to a class of corporations which the commission may designate, and by

capital is meant the combined amount of stocks, bonds, and surplus of the corporation.

The Committee on Interstate Commerce of the Senate and the Interstate and Foreign Commerce Committee of the House were considering the subjects embraced in the Newlands and the Covington bills in their respective bodies at the same time, and, though not having joint meetings, kept reasonably in touch with the thought and conclusions of each other in the preparation of the two bills; and this, in some measure, accounts for the striking similarity of the Newlands bill, which the Senate committee proposes to substitute as an amendment to the Covington or House bill. The Senate committee, however, was able, after the House bill was perfected, to have full advantage of the work of the House, and in that way seems to have presented a bill in some degree an advance upon that of the House; slightly better in the phraseology and arrangement of some of its sections and somewhat broader in its scope. It is, indeed, surprising, however, that the thought and work of the two committees should without actual joint meetings have so closely followed the same lines.

I shall attempt to sketch in broad and general terms the similarities and the differences between the two bills. There are only two provisions in the Senate bill which are not in some way referred to and provided for in the House measure.

FOREIGN INQUIRIES AND INVESTIGATION.

In subhead G of section 3 of the Senate bill the commission is directed to report its findings and evidence to the Attorney General when, from its inquiries and investigations, it believes that any corporation, individual, or association has violated any law of the United States, and in subhead H of section 3 the commission is directed to expeditiously investigate trade conditions in foreign countries where the export trade of the United States may be injuriously affected. It is hardly conceivable that anyone will object to the inclusion in the bill of these two provisions, and they may be left with only this brief statement of their scope and object.

PREVENTION OF UNFAIR COMPETITION.

The prevention of unfair competition, for which extended provision is made in the Newlands bill-section 5-is barely mentioned in the Covington bill, in section 11, where the commission, if it shall obtain any information in any of its investigations of "unfair competition or practice in commerce," is directed to report the same to the President to aid him in making recommendations to Congress for legislation. The Newlands bill makes different provision concerning unfair com