MR. BROOKS. Yes, sir.

SENATOR CUMMINS. Do you want the law so amended that what the California Fruit Exchange does can be reproduced in every other agricultural or horticultural product?

MR. BROOKS. I do not know that the law interferes with it at present, and I would not want the law amended so that it would prevent those people from doing as they are doing.

SENATOR CUMMINS. Now, assuming that the law does prevent just that sort of organization and I do not say whether it does or not you want it amended or changed so that it will not prohibit it? MR. BROOKS. Yes, sir; I do.

SENATOR CUMMINS. With respect to elevators, the farmer who enters a coöperative company agrees absolutely to sell his grain through that company, does he not?

MR. BROOKS. If it is a genuinely coöperative elevator, he does, or if he sells outside of that company he pays the same commission as if he had.

SENATOR CUMMINS. But he really agrees that he will market his grain through that elevator. Now, as to the coöperative company, does it bargain with the farmer in respect to the price?

MR. BROOKS. No, sir.

SENATOR CUMMINS. Or does the coöperative elevator company fix the price?

MR. BROOKS. It sells wheat at the best possible price and gives it to the farmer.

SENATOR CUMMINS. And then accounts to the farmer for the amount that it has received for his grain?

MR. BROOKS. Yes, sir.

SENATOR CUMMINS. But the farmer has nothing whatever to do with the fixing of the price?

MR. BROOKS. No, sir; that is fixed by the demand, or the prices they can get for it.

SENATOR CUMMINS. By the act, whatever it may be, of the elevator company. The coöperative company bargains with whomsoever it sells the grain to and gets the best price it can?

MR. BROOKS. Yes, sir; just like any other company.

SENATOR CUMMINS. And you want the cotton business to reach finally the same condition?

MR. BROOKS. Yes, sir; that is the wish of the farmers who raise

cotton.

SENATOR CUMMINS. Do you believe that it will be wise if the entire wheat-growing region should finally be combined in a single company that would market the grain of the whole country?

MR. BROOKS. It is not so much the power that one possesses as how it is exercised. Any law should be equal in its application to

the different classes of people. It should not exempt a farmer merely because he is a farmer any more than any other class. In case such a thing became possible that the farmers' organization produced such a power that it coerced and extorted from the public, it is not to be excused any more than any other trust.

SENATOR CUMMINS. But you would make its validity or legality dependent upon the use of the power that it might have rather than upon the mere possession of the power?

MR. BROOKS. Yes, sir; I think the history of the farmer has been such that it ought not to alarm anybody to think that he is going to exercise that power to extort from the world at least he has not been doing it for 6000 years.

SENATOR CUMMINS. However, you desire the farmer to be at liberty with respect to every product of the soil to enter into an arrangement of that sort?

MR. BROOKS. He should be allowed to scientifically market his crops just as any other commercial firm can market, according to the best advantages, and do it legitimately.

SENATOR CUMMINS. I am coming to that in a moment, but I want to get it clearly on the record what you want. You want the farmer to have the privilege of making this consolidation or arrangement for every product, practically, as the California Fruit Exchange has made the arrangement for the marketing of the citrus fruits of California?

MR. BROOKS. Practically, yes, sir.

SENATOR CUMMINS. Nearly all those products are annual?
MR. BROOKS. Yes, sir.

SENATOR CUMMINS. And it is necessary for the man who produces them to sell one crop before another is produced?

MR. BROOKS. Precisely, and that is the line of distinction between the farmers' products and the output of the steel mills and the coal fields, etc.

*

SENATOR CUMMINS. * * So that nature itself intervenes between such organizations and any injury to the public, and I take it that is your view of it.

MR. BROOKS. Yes, sir.

SENATOR CUMMINS. But while such an organization might for one month or two months create a scarcity in the market and in that way affect the price for that period, yet that would be followed necessarily by such a glut on the market as to correct any evil of the sort?

MR. BROOKS. Yes, sir; the violation of the law of supply and demand would bring its own retribution.

IX

RECENT FEDERAL LEGISLATION PERTAINING

TO FEDERAL CONTROL OF INDUSTRY

AN ACT TO CREATE A FEDERAL TRADE COMMISSION, TO DEFINE ITS POWERS AND DUTIES, AND FOR OTHER PURPOSES

H. R. 15613

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 shall be composed 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 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.

SECTION 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 secre

tary, who shall receive a salary of $5000 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.

SECTION 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 and 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.

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.

SECTION 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.

SECTION 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 thirty days after the service of said