would show up under the spotlight of industry and public awareness of the problem, the better to be attacked by the Commission's mandatory processes.

The guides augment the existing voluntary compliance program whereby trade practice rules reflecting the law's requirements are promulgated for a particular industry. The trade practice rules provide guidance for an industry at all points covered by the FTC's laws, whereas the guides are directed at particular sore spots.

One of these was automobile tire advertising in which names and descriptions of different grades of tires deceive the public. A 12-point guide was remarkably successful in inducing tire manufacturers to correct their labeling and advertising, and has likewise influenced the pattern of retail tire advertising to a considerable degree.

At the fiscal year's end, the Commission was readying an even more ambitious guide designed to halt fictitious pricing of all goods sold in interstate commerce. This guide also would support an organized effort by private groups devoted to honest advertising so that they might simultaneously attack the same evil at a local level where the FTC lacks jurisdiction.

A valid conclusion to be drawn from these efforts is that the Commission recognizes that its mandatory processes alone are hard put to halt unfair competition in an economy as vast as ours-whose advertising bill alone is about $11 billion. For a staff of 738, the sheer volume of formal actions needed to stop all significant violations of the law poses an awesome task. However, the Commission by giving new emphasis to its original function to inform businessmen aggressively on the requirements of the law-plus a maximum effort to erect guideposts in the form of adversary proceedings against law violators-is achieving the purposes Congress intended for it.

Without effective action against violators of the law, efforts to obtain voluntary compliance with it would be fruitless. A businessman who is persuaded to forego illegal methods of competition will not long remain a convert if his uncooperative competitor is permitted to undercut him by illegal means. Therefore, the Commission's mandatory actions become all the more important, not only in combatting the particular illegality at issue but in giving support to those willing to cooperate in keeping their own houses in order.

Both in numbers and significance, the Commission's casework has continued to mount. Formal complaints issued in fiscal 1958 increased 46 percent over those issued in fiscal 1957-from 242 to 354. In orders to cease and desist from illegal practices, the increase was 52 percentfrom 179 to 273. These increases were achieved with fewer employees (738 compared to 744).

Fiscal 1958 showed increases of 56 percent in antimonopoly complaints and 45 percent in antimonopoly orders compared with the

previous year. The compelling factor in case selection was the public interest involved.

Evidence of this is the fact that during fiscal 1958 the Commission was prosecuting more alleged illegal mergers than ever before in its history. In enforcing section 7 of the Clayton Act (the antimerger law), 7 new complaints were issued, 3 orders of divestiture obtained, and 12 other cases were in various stages of litigation. The respondents included the Nation's second largest producer of paper and paper products, Crown-Zellerbach Corp., which was ordered to divest itself of a major competitor it had acquired. Another order directed the Nation's No. 1 producer of coin-operated vending machines to give up exclusive patent and trade-mark rights it had obtained by acquiring a major competitor. Meanwhile complaints were issued challenging acquisitions by the country's second largest chemical company, the No. 2 sugar refiner, the Nation's leading producer of soap and detergent products, a major producer and manufacturer of aluminum products, and a multimillion dollar food processor and retailer.

The greatest number of antitrust cases brought during the year attacked illegal discrimination in prices and promotional allowances and services. Outlawed by the Robinson-Patman Amendment to the Clayton Act, these discriminations accounted for 61 complaints and 39 orders during fiscal 1958.

Among the corrective actions taken in this field, the Commission issued cease and desist orders prohibiting price discrimination by one of the Nation's leading breweries, by two members of the dairy industry, by a large sugar company, and by certain distributors of automotive parts, as well as bringing complaints against three others. In addition, complaints were leveled at three major producers of electric shavers charging that they had given better prices and disproportionate advertising allowances to certain favored customers. Another major case challenged favoritism toward large chain stores in the form of lower prices and higher allowances by the largest distributor of dairy products in the United States.

Similar discrimination in granting illegal discounts and allowances in lieu of brokerage was attacked in 18 complaints against various packers and brokers in the seafood industry. In the food products field, the Commission also attacked the practice whereby food brokers "split" their customary commissions with buyers or receive illegal brokerage fees on purchases made for their own accounts. A variation was a complaint issued against a wholesale grocers' cooperative and its 35 wholesaler members on grounds they had received unlawful brokerage payments on direct purchases of food and grocery products.

Illegal promotional allowances came under heavy fire, and the targets included 16 nationally known producers of food and grocery products who sought to favor large supermarket chains. The result

was that 13 were ordered to cease and desist; the other 3 still were in trial at the year's end. Meanwhile complaints alleging discriminatory promotional allowances were served on three major tobacco companies and a half dozen large concerns producing miscellaneous products such as brassieres, watches, and cameras.

Still another form of favoritism was attacked in a complaint against the world's largest manufacturer of shoes. The International Shoe Co. was ordered to stop giving financial benefits to shoe retailers who agreed not to handle competitors' products. Similar actions to protect retailers from having to deal exclusively in a manufacturer's or distributor's products were brought against one of the Nation's leading oil companies, a major supplier of vitamin and mineral supplements, and a New England distributor of liquefied petroleum gas.

Among other outstanding antimonopoly actions taken during the year was a successful crackdown on illegal price-fixing in the west coast tuna industry whereby six associations of tuna boat owners, three fishermen's and cannery workers' unions, and the California Fish Canners Association and its members accepted orders to cease and desist from the pricing practices they had been using. In another order, the Asheville Tobacco Board of Trade was made to stop monopolizing the tobacco auction warehouse industry in Asheville, N. C. The attack continued with complaints against price-fixing in the gummed paper, floor covering, diesel engine parts, gasoline, and jewelry industries. For example, a jewelers' trade association, with 4,000 members, was charged with concertedly fixing uniform price markups on silverware as well as inducing increased discounts from silverware manufacturers. A characteristic of antitrust actions is that more often than not they are too complex from a legal and financial standpoint to be understood readily by most laymen. Moreover, because such actions are concerned with business practices at least once removed from the final retail sale of products and services, the ordinary consumer takes little notice of them. His indifference becomes all the more understandable because only rarely does an individual action have an immediate and conspicuous effect on retail prices. However, the effect of the Commission's antitrust work is cumulative not only in correcting but in discouraging monopolistic practices. That this effect is accepted with little concern and less knowledge by most laymen does not detract from its importance, for it provides a vital defense for our system of free enterprise.

The Commission's actions against deceptive practices, on the other hand, are more readily understood, and the fiscal year saw an impressive variety of advertising claims attacked with complaints and orders.

Nearly a third of these involved fictitious pricing of merchandise. Here the evil is particularly dangerous by reason of its insidiousness.

At first glance it would seem that a merchant commits only a trifling offense by advertising goods at a reduction from a former price that is fictitiously high. Yet, the effect of such advertised "bargain" prices is to force competitors to the same kind of trickery. A leak in the dike of advertising integrity thus gains in volume, with a potential of inundating public confidence in advertised claims. Should this occur in any important degree, the effect would be dire indeed, for advertising not only buttresses all but provides vital support for the developemnt of new business products. In short, the Commission does not intend to permit the policing of fictitious pricing to become a "horseshoe nail for the want of which a kingdom is lost."

In numbers of complaints and orders, the Commission's efforts to halt deception were greatest in the fields of wool and fur labeling. New actions to prevent mislabeling of furs rose more than 70 percent over those taken in fiscal 1957, while the 36 complaints aimed at improper labeling of wool represented a 38 percent increase over the previous year. This step-up in activity resulted not only from a strengthening of the staff of fur investigators but as a result of increasingly competitive conditions both in the wool and fur fields. In the manufacture of wool products, tighter price competition has tempted many makers to increase the percentages of substitute materials and fibers of lower quality and cost without endangering sales by noting these percentage changes on the labels. Also, the FTC's complaints have challenged an excess of optimism in the labeling of such costly specialty fibers of cashmere, vicuna, and alpaca. As for furs, the principal sinning has been a combination of fictitious markdowns in price plus advertising and labeling that misrepresents tipdyed or foreign mink to be high-grade domestic quality.

A novel scheme that prompted issuance of seven complaints is the so-called advance fee real estate racket. Here the owners of propertyquite often elderly people who plan to retire-have advertised unsuccessfully their farms or businesses for sale. These advertisements are seen by promoters who thereupon telephone the would-be sellers and advise them that the promoters have clients willing to pay not only the asking price but more. After payment of a quick advance fee to clinch this "opportunity," the would-be sellers learn to their dismay that they have bought no more than ineffective advertising in a property-listing bulletin. The advance fee is not refunded.

As for the rest of the Commission's actions in the deceptive practice field, the variety was as wide as the ingenuity and conscience of the promoters. For example, complaints were issued challenging advertising that would lead the public to believe: that reprinted books under new titles were fresh from an author's pen; that hair growers could restore a luxurious growth in all cases; that watches with 1 or 2 jewels contained at least 17; that certain contact eyeglasses

offered day-long comfort, were unbreakable, and provided eyes with superior ventilation; and that a certain grass sold by mail order multiplied itself 50 times during a summer without weeds. In addition, the Commission moved against a score of old favorites such as the cures for arthritis and rheumatism, the collection agencies posing as dispensers of largesse, and the sellers of cookware who disparage competing products as poison pots, and vending machines whose amazing profits need but the gathering to assure comfort and security for the credulous.

To the formal cases aimed at halting deceptive practices can be added 146 informal stipulations-as compared to 105 in fiscal 1957— whereby individuals and firms agreed to stop practices which the FTC considered to violate the laws it administers. This procedure, which saves the time and expense of formal litigation, is employed when the Commission has reason to believe that no sterner measures are required to stop the objectionable acts. The principal target here is false advertising, and a close check is maintained on whether the stipulated agreements are kept.

In addition to litigation against individual respondents, the Commission continued its efforts to aid entire industries to abide by the laws it administers. This involves analyzing the particular industry's practices to determine which might be illegal and to identify and prohibit them by trade practice rules. Once issued, the rules are administered to assure compliance with them and are revised as necessary to keep them up to date. At the end of fiscal 1958, trade practice rules were in force for 159 industries.

In the field of economics, the Commission approved what was later to be printed as a 361-page report on the $330 million a year antibiotics industry. This study, begun in early 1956, succeeded in presenting the first comprehensive picture of an industry whose formative years had necessarily been hidden by wartime secrecy and then, due to rapid new developments, had raced ahead of competent economic analysis. As the report neared completion, the Commission directed that a legal investigation be conducted simultaneously to determine whether patent licensing arrangements among manufacturers of the so-called "broad spectrum" antibiotics were illegally monopolistic, resulting in excessively high prices to the public. This investigation was to result in the issuance, a month after the fiscal year ended, of complaints against six corporations on charges of having obtained a vital patent through misrepresentation and thereafter having conspired to restrain trade and fix prices.

The Commission's vigorous law enforcement and the resultant in crease in orders to cease and desist has required an ever greater effor to secure compliance with these orders and has caused the Commission to become engaged in a considerable amount of court litigation.