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Politics, Personalities, and the Federal Trade Commission, I

Published online by Cambridge University Press:  02 September 2013

E. Pendleton Herring
Affiliation:
Harvard University

Extract

The Federal Trade Commission has been the object of more scholarly examination and critical discussion than any other administrative commission in the federal government. The statutory authority, the internal organization, and the administrative procedure of the Commission have all been studied. More specialized researches have thrown light on its regulation of competitive practices and its relations with the courts. Our purpose here is to view the Commission in its relations with business and with Congress and the President, in order to achieve some understanding of the political and economic factors that have influenced its activities.

Underlying both sets of relationships are the conflicts of economic groups and special interests which attempt to convert their force into political power when they touch the legislator or the President. The attempt here will be to explore some of these rather intangible aspects of the Commission's administrative experience.

Type
Research Article
Copyright
Copyright © American Political Science Association 1934

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References

1 The recent study by Carl McFarland (Judicial Review of the Interstate Commerce Commission and of the Federal Trade Commission) conclusively demonstrated the hampering effect of judicial review upon the initiative and independence of the Commission. While this study admirably discloses the control by the courts, the political and economic factors that influence the Commission lay beyond the author's purpose. McFarland concedes that “to attribute the lack of success entirely to unsympathetic treatment at the hands of the judges would be error—causes are rarely so simple. Personnel and amplifying legislation, among other things, are of first importance.”

2 “Business men, trade associations, and commercial and industrial interests to whom the uncertainty of the law had become exasperating … took the view … that after nearly a quarter of a century of experience with the anti-trust law, it should be possible for the statesmen in Washington to make up their minds just what conduct they wished to forbid, and to describe it in language which the citizen could understand.” Henderson, G. C., The Federal Trade Commission, p. 17Google Scholar.

3 Abram F. Myers, Address at the Institute of Public Affairs, University of Virginia, July 9, 1932.

4 “It is not conceived that Congress, which laid down no definition whatever, intended to either limit or extend the matters which constituted unfair methods of competition prior to the passage of the Clayton Act, but that its object was the creation of a board of commissioners.” Kinney-Rome Co. v. P. T. C., 275 Fed. 665. See also Rublee, George, “The Original Plan and Early History of the Federal Trade Commission,” Proceedings of Academy of Political Science, Vol. XI, No. 4, p. 114 (Jan. 1926)Google Scholar.

5 Address before Grain Dealer's Association, Baltimore, September 25, 1916.

6 In the Shade Shop Case, the Commission took jurisdiction over a petty dispute between two little shopkeepers. Justice Brandeis, in overruling the Commission, stated: “In determining whether a proposed proceeding will be in the public interest, the Commission exercises a broad discretion. But the mere fact that it is to the interest of the community that private rights shall be respected is not enough to support a finding of public interest. To justify filing a complaint, the public interest must be specific and substantial” (F. T. C. v. Klesner, 280 U.S. 19). When the Commission ruled that using false and misleading trade names constituted an unfair method of competition on the part of the Winsted Hosiery Company, Justice Brandeis stated that “as a substantial part of the public was still misled by the use of the labels which the Winsted Company employed, the public had an interest in stopping the practice as wrongful” (F. T. C. v. Winsted Hosiery Co., 258 U.S. 483). Whether a complaint sufficiently affects the specific and substantial interests of the public remains for the courts to decide (Ostermoor and Co., Inc. v. F. T. C., 16 F (2d) 962). Is the public misled into dreaming of impossible resiliency by looking at a trade-mark showing the hugely swelling contents of an unfinished Ostermoor mattress? Is the public interest concerned in the accuracy with which a particular breed of hogs is advertised? (L. B. Silver & Co. v. F. T. C., 289 Fed. 985).

7 Annual Report, 1924, p. 14Google Scholar.

8 See Henderson, op. cit., p. 334, and McFarland, op. cit., p. 178.

9 Annual Report, 1925, p. 4Google Scholar.

10 For a contrary view, see Blaisdell, T. C., The Federal Trade Commission, p. 76Google Scholar.

11 After reviewing the Commission's experience with the oil, aluminum, steel, and meat-packing industries, Blaisdell concludes that the attempts toward restoring competitive conditions have been of slight effectiveness. The Commission was not equal to the task. The studies published and the recommendations made by the Commission have been in the main disregarded. Op. cit., p. 255.

12 Anti-Trust Law Symposium, p. 133.

13 Cong. Rec., August 22, 1919, p. 7311.

14 Cong. Rec., Feb. 9, 1926, p. 3630.

15 Annual Report, 1916, p. 6Google Scholar.

16 Cong. Rec., October 22, 1919, p. 7310Google Scholar.

17 Annual Report, 1919, p. 38Google Scholar.

18 The advertising expenditures of Swift and Company alone by 1919 had risen to nearly six-fold the total appropriation of the Commission. Blaisdell, op. cit., p. 190.

19 Cong. Rec., October 3, 1918, pp. 11041–51Google Scholar.

20 Cong. Rec., December 3, 1919, p. 67Google Scholar.

21 Odell, G. T., “The Commission Yields to Pressure,” Nation, January 12, 1921Google Scholar.

22 Annual Report, 1921, p. 46Google Scholar.

23 See Hearings before the Committee on Agriculture and Forestry, U.S. Senate, 65th Cong., 3rd Sess., on S. 5305, p. 17.

24 Cong. Rec., August 9, 1921, p. 4786Google Scholar.

25 McFarland, op. cit., pp. 45·47.

26 Annual Report, 1922, p. 2Google Scholar.

27 Henderson, op. cit., p. 342.

28 Dissent in Federal Trade Commission v. Mack, Miller Candle Company.

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