to harmonize with the requirements of our laws respecting domestic trade and without injuring any domestic competitor in the foreign trade or unduly thereby enhancing prices to domestic consumers.

The amendments suggested will be considered in the following order:

First. We suggest striking out on page 1, line 8, the words "trading in or marketing," and insert in lieu thereof "or selling for consumption."

The purpose of the bill is to promote export trade. It defines the words "export trade" as "trade or commerce in goods, wares or merchandise exported, or in the course of being exported from the United States or any Territory thereof to any foreign nation." The bill then further limits this definition by saying "export trade shall not include the production, manufacture, trading in or marketing within the United States," etc. All seem to agree that export trade should not include production and manufacture. The words "trading in or marketing" would permit these associations to compete in the home markets where combinations in restraint of trade are forbidden. We substitute for this phrase the words "selling for consumption," so that this part of the text will read "The words 'export trade' shall not be deemed to include the production, manufacture or selling for consumption within the United States," etc. We desire, of course, to authorize associations for the sole purpose of selling abroad. In order to do this, they must have the right to acquire or buy within the United States and the right to sell within the United States for the foreign market, but in view of the settled domestic policy of the United States under the Sherman law, clearly these associations should not be permitted to organize for the purpose of making sales abroad and use their organizations to sell for consumption within the United States.

Second. In section 2 of the bill as it passed the House, we recommend striking out at the end of the section the words "and does not restrain the export trade of the United States," and inserting in lieu thereof the following: "And is not in restraint of the export trade of any domestic competitor of such association: And provided further, That such association does not, either in the United States or elsewhere, enter into any agreement, understanding, or conspiracy, nor do any act, which artificially or intentionally and unduly enhances prices within the United States of commodities of the class exported by such association."

As presented to us, this section provides that the Sherman Law shall not be construed so as to make illegal an association entered into for the sole purpose of engaging in export trade, and actively engaged solely in export trade or any agreement made or act done in the course of export trade by such association. This section then provides that "these associations or agents shall not be in restraint of trade within the United States, and shall not restrain the export trade of the United States." Of course, we do not want to restrain trade within the United States as the first clause of the language quoted provides.

Reduced to its final analysis, this section attempts to give the right to enter into associations, make agreements, and do acts in restraint of export trade, while the second clause quoted takes away this right. To avoid the effect of the last clause, and at the same time to secure

the purpose of this act in the interest of our foreign trade, the committee suggests the striking out of the last clause and inserting after the words "United States on line 19, page 2, the amendment as written above. By this change the committee aims to place three limitations upon these associations, their acts and agreements:

(a) The authority hereby conferred should not result in the restraint of trade within the United States which is clearly prohibited by the Sherman law.

(b) While the purpose of the bill is to increase our foreign trade, it should not result in destroying the business of other companies, associations, or individuals who may be engaged in the foreign trade. The purpose is to increase and improve this trade, not to injure it.

(c) While we realize that any sales in foreign commerce may incidentally and temporarily result in the increase in prices of the same articles to home consumers, these associations ought not to be permitted to so conduct their affairs as to artificially or intentionally and unduly enhance prices of the commodities in which they are dealing to the home consumer.

To illustrate: While the large packers, in order to get their full share of the foreign trade ought to be permitted to form associations for the purpose of buying meat products and selling them abroad, they ought not to be allowed to so conduct this branch of their business as to increase the prices at home more than would naturally result from the export trade. They ought not to be permitted to buy ostensibly for this trade and then use their stock for the purpose of depressing prices to the point of ruining home competitors, and then raise the prices to all consumers, and thereby secure a monopoly. Hence this last restriction.

Third. The committee recommends that section 5, on page 4, lines 9 to 12, inclusive, be amended by striking out the following: "And of all contracts, agreements, and understandings had with any foreign or domestic association in regard to the conduct of, or practices in foreign trade," and to insert in lieu thereof the following: "It shall also furnish to the commission such information as the commission may require as to the organization, business, conduct, practices, management, and relation of other associations, corporations, partnerships, and individuals." As originally drawn, the information called for by the language stricken out is required to be furnished as a matter of law. By the words inserted the associations are only required to furnish this information as the commission may require. Fourth. Section 4 of the bill aims to prevent "unfair methods of competition" in the foreign trade and extends the jurisdiction which the Federal Trade Commission now has over this subject in domestic commerce to unfair methods of competition in the foreign trade.

Associations, when formed, may enter into agreements or conspiracies or perform acts beyond the territorial limits of the United States which may result in the destroying, seriously injuring, or affecting our commerce, foreign and domestic, by means other than by unfair methods of competition. It seems advisable, therefore, to the majority of the committee that the Federal Trade Commission should be clothed with full power to investigate, so that they may determine whether and to what extent the laws have been violated.

For this reason the committee suggests the amendment at the close of section 5, which reads as follows:

Wherever the Federal Trade Commission shall have reason to believe that an association or any agreement made or act done by such association is in restraint of trade within the United States or in restraint of the export trade of any domestic competitor of such association, or that an association either in the United States or elsewhere has entered into any agreement, understanding, or conspiracy, or done any act which artificially or intentionally and unduly enhances prices within the United States of commodities of the class exported by such association, it shall summon such association, its officers, and agents to appear before it and thereafter conduct an investigation into the alleged violations of law. Upon investigation, if it shall conclude that the law has been violated it may make to such association recommendations for the readjustment of its business, in order that it may thereafter maintain its organization and management and conduct its business in accordance with law. If such association fail to comply with the recommendations of the Federal Trade Commission, said commission shall refer its findings and recommendations to the Attorney General of the United States for such action thereon as he may deem proper.

For the purpose of enforcing these provisions the Federal Trade Commission_shall have all the powers, so far as applicable, given it in "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

This amendment confers upon the Federal Trade Commission full power to investigate and the right to make recommendations to the associations for the readjustment of their business if any law has been violated so that they may thereafter maintain their organization and management and conduct their business in accordance with the law. If the association fails to do so, then the commission is directed to refer its findings and recommendations to the Attorney General for such action as he may deem proper.

The committee believes that as amended this bill will give to those interested in our foreign trade the full power to organize with respect to that trade so as to enable them to meet our foreign competitors and at the same time will not result in any substantial injury to our domestic commerce.

FEBRUARY 14 (calendar day, FEBRUARY 16), 1917.-Ordered to be printed.

Mr. SIMMONS, from the Committee on Finance, submitted the

following

REPORT.

[To accompany H. R. 20082.]

The Committee on Finance, to whom was referred the bill (H. R. 20082) to amend an act entitled "An act to authorize the establishment of a Bureau of War-Risk Insurance in the Treasury Department," approved September 2, 1914, having considered the same, report it back to the Senate with the following amendment added as two new sections, and recommend that the bill as amended do pass:

SEC. 2. That section seven of the act of September second, nineteen hundred and fourteen, be, and is hereby, amended to read as follows:

"That for the purpose of paying losses accruing under the provisions of this act there is hereby appropriated, out of any money in the Treasury of the United States not otherwise appropriated, the sum of $15,000,000.”

SEC. 3. That all moneys received from premiums and from salvage shall be covered into the Treasury to the credit of the appropriations made for the payment of losses and be available for the purposes thereof.

There is attached hereto, as a part of this report, a letter from Hon. A. J. Peters, Assistant Secretary of the Treasury, containing statements with respect to the operation of the Bureau of War-Risk Insurance from September 2, 1914, to February 9, 1917, and suggesting and approving the amendments proposed by your committee.

There is also attached hereto the report of the House Committee on Interstate and Foreign Commerce, giving the reasons why the time for the suspension of the operation of the act authorizing the establishment of this bureau should be extended.

TREASURY DEPARTMENT,
OFFICE OF ASSISTANT SECRETARY,
Washington, February 10, 1917.

DEAR SENATOR SIMMONS: In compliance with our conversation, I am submitting in writing the request that the money available for paying losses accruing under the provisions of the act creating the War-Risk Insurance Bureau be increased from $5,000,000 to $15,000,000.

The present international situation in this country has increased the demand for war-risk insurance. In the near future that demand may become even greater and the bureau be called on to meet substantial losses.

The bureau has at present available to meet losses the sum of a little over four and a half million dollars. There are risks outstanding to February 9, 1917, which amount to $40,257,631.

The demand for insurance is at present active, and since February 1, 1917, the bureau has written insurance amounting to $14,688,569. There are applications now before the bureau for insurance by companies operating steamship lines in the Western Hemisphere for the sum of $39,988,569.

If this country becomes involved in hostilities it is absolutely essential for our commerce to have protection by war-risk insurance. Under the present limitations, where the total amount available is only about four and one-half million dollars, a few losses would quickly exhaust our resources and that protection cease. After the amount available, which is now about $4,500,000, is expended, there will be no way for the bureau to meet its losses. The Government's war-risk insurance policies will not be accepted, the aid to commerce which the bureau now estends will cease, and the Government will be placed in a position of great embarrassment and humiliation. The nations now at war have government war-risk insurance, and the failure of our Government to provide insurance under the same conditions to American commerce would result in a great handicap to the operation of American ships.

I therefore suggest that section 7 of "An act establishing a Bereau of War-Risk Insurance," approved September 2, 1914, be amended to read as follows:

"That for the purpose of paying losses accruing under the provisions of this act there is hereby appropriated, out of any money in the Treasury of the United States not otherwise appropriated, the sum of $15,000,000."

The House of Representatives has just passed a bill (H. R. 20082) which extends the operation of the act for one year from September next. If it seems advisable to the committee the above suggestion might be added as an amendment to the bill passed by the House.

A consideration of the figures given below indicates the success of the operation of
the bureau and the great assistance it has rendered to the commerce of the country.
From September 2, 1914 to February 9, 1917, the bureau has written 1,988 policies:
Total amount insured under these policies.....
Premiums on same..

Losses incurred on the above amount to....
Salvage received on these losses....

Making net losses.

The original act of September 2, 1914, made available for the payment of losses.

Of this sum there is now available for the payment of losses after adding premiums, approximately....

Total profits of the bureau, after deducting losses, from September 2, 1914, to February 9, 1917...

To this must be added salvage received and covered into the Treasury of.........

Making a total of...........................

$223, 187, 683.00 3, 436, 457. 40

833, 924.60 59, 055.87

774, 868. 73

5, 000, 000.00

4,656, 682. 35

2, 602, 532. 80

59, 055. 87

2,661, 588.67

Our commerce at the present time demands insurance from the bureau for so great an amount that it makes essential an increase of the amount of money available for paying losses of the bureau.

Respectfully,

Hon. F. M. SIMMONS,

A. J. PETERS, Assistant Secretary.

Chairman Finance Committee, United States Senate.

[House Report No. 1378, Sixty-fourth Congress, Second session.]

The Committee on Interstate and Foreign Commerce, to whom was referred the bill (H. R. 20082) to amend an act entitled "An act to authorize the establishment of a Bureau of War-Risk Insurance in the Treasury Department," approved September 2, 1914, having considered the same, report thereon with a recommendation that it pass.