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ACTS OF CONGRESS FROM WHICH THE COMMISSION

DERIVES ITS POWERS.

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AN ACT To create a Federal Trade Commission, to define its powers and duties, and for

other purposes.

Sec. 1. CREATION AND ESTABLISHMENT OF THE COMMISSION. (38 Stat. 717; 15 USCA, sec. 41.)

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That a commission is hereby created and established, to be known as the Federal Trade Commission (hereinafter referred to as the commission), which

1 This act is extended to foreign trade by the Export Trade Act, approved Apr. 10, 1918 (40 Stat. 516) printed at p. 31 hereof.

The act of Feb. 13, 1925, to amend the Judicial Code, etc. (43 Stat. 936, 939), and repeated in the amendment to the Judicial Code carried in the Railway Labor Act, approved May 20, 1926 (44 Stat. 577, 587), provides that secs. 239 and 240 of the Judicial Code (43 Stat. 939) shall apply to cases arising under sec. 5 of the Federal Trade Com. mission Act and sec. 11 of the Clayton Act. Secs. 239 and 240 of the Judicial Code relate to the certification of questions of law to the Supreme Court and the granting of certiorarl by that court.

It should be noted that the jurisdiction of the commission is limited by the “Packers and Stockyards Act, 1921," approved Aug. 15, 1921, ch. 64, 42 Stat. 159, sec. 406 of said act providing that “On and after the enactment of this Act, and so long as it remains in effect, the Federal Trade Commission shall have no power or jurisdiction so far as relating to any matter which by this Act is made subject to the jurisdiction of the Secretary (of Agriculture) except in cases in which, before the enactment of this Act, complaint has been served under sec. 5 of the Act, entitled 'An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,' approved Sept. 26, 1914, or under sec. 11 of the Act, entitled 'An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes,' approved Oct. 15, 1914, and except when the Secretary of Agriculture, in the exercise of his duties hereunder, shall request of the said Federal Trade Commission that it make investigations and report in any case."

Also by sec. 402 of the “ Packers and Stockyards Act, 1921" the “ provisions (including penalties)" of secs. 6, 8, 9, and 10 of the Federal Trade Commission Act are made applicable to the jurisdiction, powers, and duties of the Secretary of Agriculture to enforce the 1921 Act.

The acts making appropriations for the Federal Trade Commission for the fiscal years 1926 to 1928, Inclusive (43 Stat. 1203; 44 Stat. 311 and 1075, respectively), carried provisions in identical language that no part of the sums appropriated be expended for investigations requested by either House of Congress except those re. 110600_30_1

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shall be com[718]posed of five commissioners, who shall be appointed by the President, by and with the advice and consent of the Senate. Not more than three of the commissioners shall be members of the same political party. The first commissioners appointed shall continue in office for terms of three, four, five, six, and seven years, respectively, from the date of the taking effect of this Act, the term of

quested by concurrent resolution of Congress, but this limitation shall not apply to investigations and reports in connection with alleged violations of the antitrust Acts by any corporation." This provision was not carried in the 1929 and 1930 appropriation acts approved Mar. 16, 1928, and Feb. 20, 1929, respectively.

In connection with the history in Congress of the Federal Trade Commission Act, see address of President Wilson delivered at a joint session on Jan. 20, 1914 (Congressional Record, vol. 51, pt. 2, pp. 1962–1964, 63d Cong., 2d sess.); report of Senator Cummins from the Committee on Interstate Commerce on Control of Corporations, Persons, and Firms engaged in Interstate Commerce (Feb. 26, 1913, 62d Cong., 3d sess., Rept. No. 1326) ; Hearings on Interstate Trade Commission before Committee on Interstate and Foreign Commerce of the House, Jan, 30 to Feb. 16, 1914, 63d Cong., 2d sess. ; Interstate Trade, Hearings on Bills relating to Trust Legislation before Senate Committee on Interstate Commerce, 2 vols., 63d Cong., 2d sess.; report of Mr. Covington from the House Committee on Interstate and Foreign Commerce on Interstate Trade Commission (Apr. 14, 1914, 63d Cong., 2d sess., Rept. No. 533); also parts 2 and 3 of said report presenting the minority views, respectively, of Messrs. Stevens and Lafferty; report of Senator Newlands from the Committee on Interstate Commerce on Federal Trade Commission (June 13, 1914, 63d Cong., 2d sess., Rept. No. 597) and debates and speeches, among others, of Congressmen Covington for (references to Congressional Record, 630 Cong., 2d sess., vol. 51), part 9, pp. 8810-8849 ; 9068; 14925–14933 (part 15); Dickinson for, part 9, pp. 9189-9190 ; Mann against, part 15, pp. 14939–14940; Morgan, part 9, 8854-8857, 9063-9064, 14941-14943 (part 15); Sims for, 14940–14941; Stevens of N. II. for, 9063 (part 3) ; 14941 (part 15); Stevens of Minn. for, 8849-8853 (part 9); 14933-14939 (part 15); and of Senators Borab against, 11186-11189 (part 11); 1123211237, 11298-11302, 11600-11601 (part 12); Brandegee against, 12217-12218, 1222012222, 12261-12262, 12410-12411, 12792-12804 (part 13), 13103-13105, 13299–13301 ; Clapp against, 11872-11873 (part 12), 13061-13065 (part 13), 13143–13146; 1330113302 ; Cummins for, 11102-11106 (part 11), 11379–11389, 11447–11458 (part 12), 11528–11539, 12873–12375 (part 13), 12912–12924, 12987-12992, 13045-13052, 1476814770 (part 15); Hollis for. 11177–11180 (part 11), 12141-12149 (part 12), 1215112152; Kenyon for, 13155–13160 (part 13); Lewis for, 11302-11307 (part 11), 12924– 12933 (part 13); Lippit against, 11111-11112 (part 11), 13210–13219 (part 13); Newla nds for, 9930 (part 10), 10376–10378 (part 11), 11081–11101, 11106-11116, 1159411597 (part 12); Pomerene for, 12870–12873 (part 13), 12993–12996, 13102–13103 ; Reed against, 11112-11116 (part 11). 11874-11876 (part 12), 12022-12029, 12150– 12151, 12539–12351 (part 13), 12933–12939, 13224-13234, 14787-14791 (part 15); Robinson for, 11107 (part 11), 11228-11232 ; Saulsbury for, 11185, 11591-11594 (part 2); Shields against, 13056-13061 (part 13), 13146–13148; Sutherland against, 1160111604 (part 12), 12803-12817 (part 13), 12855-12862, 12980–12986, 13055–13056, 13109-13111; Thomas against, 11181-11185 (part 11), 11598-11600 (part 12), 1286212869 (part 13), 12978-12980; Townsend against, 11870–11872 (part 12); and Walsh for, 13052-13054 (part 13).

See also Letters from the Interstate Commerce Commission to the chairman of the Committee on Interstate Commerce, submitting certain suggestions to the bill creating an Interstate Trade Commission, the first being a letter from Hon. C. A. Prouty, dated Apr. 9, 1914 (printed for the use of the Committee on Interstate Commerce, 63d Cong., 2d sess.) ; letter from the Commissioner of Corporations to the cbairman of the Committee on Interstate Commerce, transmitting certain suggestions relative to the bill (H. R. 15613) to create a Federal Trade Commission, first letter dated July 8, 1914 (printed for the use of the Committee on Interstate Commerce, 63d Cong., 2d sess.) ; brief by the Bureau of Corporations, relative to sec. 5 of the bill (H. R. 15613) to create a Federal Trade Commission, dated Aug. 20, 1914 (printed for the use of the Committee on Interstate Commerce, 63d Cong., 2d sess.) ; brief by George Rublee relative to the court review in the bill (H. R. 15613) to create a Federal Trade Commission, dated Aug. 25, 1914 (printed for the use of the Committee on Interstate Commerce, 63d Cong., 2d sess.) ; and dissenting opinion of Justice Brandeis in Federal Trade Commission v. Gratz, 263 U. S. 421, 429-442; also in this volume at p. 74,

each to be designated by the President, but their successors shall be appointed for terms of seven years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the commissioner whom he shall succeed. The commission shall choose a chairman from its own membership. No commissioner shall engage in any other business, vocation, or employment. Any commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office. A vacancy in the commission shall not impair the right of the remaining commissioners to exercise all the powers of the commission.

The commission shall have an official seal, which shall be judicially noticed.

Sec. 2. SALARIES. SECRETARY. OTHER EMPLOYEES. EXPENSES OF THE COMMISSION. OFFICES. (38 Stat. 718; 15 USCA, sec. 42.)

Sec. 2. That each commissioner shall receive a salary of $10,000 a year, payable in the same manner as the salaries of the judges of the courts of the United States. The commission shall appoint a secretary, who shall receive a salary of $5,000 a year, payable in like manner, and it shall have authority to employ and fix the compensation of such attorneys, special experts, examiners, clerks, and other employees as it may from time to time find necessary for the proper performance of its duties and as may be from time to time appropriated for by Congress.

With the exception of the secretary, a clerk to each commissioner, the attorneys, and such special experts and examiners as the commission may from time to time find necessary for the conduct of its work, all employees of the commission shall be a part of the classified civil service, and shall enter the service under such rules and regulations as may be prescribed by the commission and by the Civil Service Commission.

All of the expenses of the commission, including all necessary expenses for transportation incurred by the commissioners or by their Employees under their orders, in making any investigation, or upon official business in any other places than in the city of Washington, shall be allowed and paid on the presentation of itemized vouchers therefor approved by the commission.

Until otherwise provided by law, the commission may rent suitable offices for its use.

The Auditor for the State and Other Departments shall receive and examine all accounts of expenditures of the commission.

Sec. 3. BUREAU OF CORPORATIONS. OFFICE OF THE COMMISSION. PROSECUTION OF INQUIRIES. (38 Stat. 718; 15 USCA, sec. 43.)

Sec. 3. That upon the organization of the commission and election of its chairman, the Bureau of Corporations and the offices of Commissioner and Deputy Commissioner of Corporations shall cease to exist; and all pending investigations and proceedings of the Bureau of Corporations shall be continued by the commission.

All clerks and employees of the said bureau shall be transferred to und become clerks and employees of the commission at their present grades and salaries. All records, papers, and property of the said bureau shall become records, papers, and property of the commission, and all unexpended funds and appropriations for the use and maintenance of the said bureau, including any allotment already made to it by the Secretary of Commerce from the contingent appropriation for the Department of Commerce for the fiscal year nineteen hundred and fifteen, or from the departmental printing fund for the fiscal year nineteen hundred and fifteen, shall become funds and appropriations available to be expended by the commission in the exercise of the powers, authority, and duties conferred on it by this Act.

[719] The principal office of the commission shall be in the city of Washington, but it may meet and exercise all its powers at any other place. The commission may, by one or more of its members, or by such examiners as it may designate, prosecute any inquiry necessary to its duties in any part of the United States. Sec. 4. DEFINITIONS. (38 Stat. 719; 15 USCA, sec. 44.)

SEC. 4. That the words defined in this section shall have the following meaning when found in this Act, to wit:

Commerce means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation.

“Corporation ” means any company or association incorporated or unincorporated, which is organized to carry on business for profit and has shares of capital or capital stock, and any company or association, incorporated or unincorporated, without shares of capital or capital stock, except partnerships, which is organized to carry on business for its own profit or that of its members.

“Documentary evidence” means all documents, papers, and correspondence in existence at and after the passage of this Act.

“Acts to regulate commerce” means the Act entitled “An Act to regulate commerce," approved February fourteenth, eighteen hundred and eighty-seven, and all Acts amendatory thereof and supplementary thereto.

“Antitrust acts” means the Act entitled "An Act to protect trade and commerce against unlawful restraints and monopolies," approved

July second, eighteen hundred and ninety;' also the sections seventythree to seventy-seven, inclusive, of an Act entitled “An Act to reduce taxation, to provide revenue for the Government, and for other purposes," approved August twenty-seventh, eighteen hundred and ninety-four; and also the Act entitled "An Act to amend sections seventy-three and seventy-six of the Act of August twenty-seventh, eighteen hundred and ninety-four, entitled 'An Act to reduce taxation, to provide revenue for the Government, and for other purposes,' ” approved February twelfth, nineteen hundred and thirteen.

See. 5. UNFAIR COMPETITION, COMPLAINTS, · FINDINGS, AND ORDERS OF COMMISSION. APPEALS. SERVICE. (38 Stat. 719; 15 USCA, sec. 45.)

Sec. 5. That unfair methods of competition in commerce are hereby declared unlawful.

The commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, and common carriers subject to the Acts to regulate commerce, from using unfair methods of competition in commerce.

Whenever the commission shall have reason to believe that any such person, partnership, or corporation has been or is using any unfair method of competition in commerce, and if it shall appear to the commission that a proceeding by it in respect thereof would be to the interest of the public, it shall issue and serve upon such person, partnership, or corporation a complaint stating its charges in that respect, and containing a notice of a hearing upon a day and at a place therein fixed at least 30 days after the service of said complaint. The person, partnership, or corporation so complained of shall have the right to appear at the place and time so fixed and show cause why an order should not be entered by the commission requiring such person, partnership, or corporation to cease and desist from the violation of the law so charged in said complaint. Any person, partnership, or corporation may make application, and upon good cause shown may be allowed by the commission, to intervene and appear in said proceeding by counsel or in person. The testimony in any such proceeding shall be reduced to writing and filed in the office of the commission. If upon such hearing the commission shall [720) be of the opinion that the method of competition in question is prohibited by this Act, it shall make a report in writing in which it shall state its findings as to the facts, and shall issue and

*This is the Sherman Act, for text of which see footnote on pp. 13 and 14.

'Jurisdiction of commission under this section is limited by sec. 406 of the Packers and Stoekyards Act, 1921, approved Aug. 15, 1921, ch. 64, 42 Stat. 159. See third paragraph of footnote on p. 1.

For references to provisions of the Judicial Code relating to jurisdiction of circuit court of appeals under this section see footnote on p. 1.

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