regulation of such commerce, and to report such data to the President from time to time as he shall require; and the information so obtained or as much thereof as the President may direct shall be made public.

In order to accomplish the purposes declared in the foregoing part of this section, the said Commissioner shall have and exercise the same power and authority in respect to corporations, joint stock companies and combinations subject to the provisions thereof, as is conferred on Interstate Commerce Commission in said "Act to regulate commerce" and the amendments thereto in respect to common carriers so far as the same way may be applicable, including the right to subpoena and compel the attendance and testimony of witnesses and the production of documentary evidence and to administer oaths.

The establishment of this permanent body to investigate and to publish under the direction of the President the information obtained, in some ways supplemented the Sherman Anti-Trust Law and in others departed radically from its basic idea. The Sherman Act, at least until 1911 when the law was interpreted to mean "unreasonable restraint of trade," failed to recognize the irresistible movement toward concentration in business. Its method was abolition in isolated cases brought to its attention by judicial procedure. The new idea involved in the establishment of the Bureau of Corporations was the recognition of the inevitableness and in some cases of the desirability of industrial combinations, in spite of general statutory prohibition. Its method of handling the problem was regulation instead of repression. The regulation was to be obtained from Congress and, especially from the force of public opinion, acting on information supplied by a permanent administrative body organized and trained for that purpose. This new conception of the "trust problem" was not universally accepted or perhaps even dominant among the reasons for establishing the Bureau of Corporations. But it was present, and it continued to spread. In each of the annual reports of the Commissioner of Corporations the idea is emphasized and the necessity

shown for broadening the national control into a general constructive policy.

As it was, the work of the bureau was restricted to a comparatively small scope. The most conspicuous pieces of work it did during its eleven years of existence were the investigations of the Petroleum Industry (Standard Oil Company), of the Tobacco Industry, and of the International Harvester Company. In each case the work was done under, or the results used to supplement, the Sherman Anti-Trust Law by aiding the Attorney General in prosecuting under it. Experiences during these investigations showed how great is the force of mere publicity. Perhaps the best illustration was in 1906 when the great system of secret and semi-secret railroad discriminations enjoyed by the Standard Oil Company was made public by the bureau. Immediately all the railroads concerned voluntarily cancelled every rate criticised as illegal.

Growth of the Commission Idea. For a good many years there had been evolving a new agency in American government for executive and quasi-judicial functions. It was designed to afford more speedy and informal relief than that given by the law and to make the remedy fit the circumstances. This idea of commissions of experts gained wide approval and many people thought it the best solution of the trust problem. By 1912 it had become so popular that two of the three big parties declared in their platforms for the creation of an independent commission to deal with at least some phases of the trust problem. On January 20, 1914, President Wilson delivered a special message to Congress on trusts and monopolies, in which he recommended the establishment of a Federal Trade Commission. He said in part:

And the business men of the country desire something more than that the menace of legal process in these matters be made explicit and intelligible. They desire the advice, the definite guidance, and information which can be supplied by

an administrative body, an interstate trade commission. The opinion of the country would instantly approve of such a commission. It would not wish to see it empowered to make terms with monopoly or in any sort to assume control of business, as if the Government made itself responsible. It demands such a commission only as an indispensable instrument of information and publicity, as a clearing house for the facts by which both the public mind and the managers of great business undertakings should be guided, and as an instrumentality for doing justice to business where the processes of the courts or the natural forces of correction outside the courts are inadequate to adjust the remedy to the wrong in a way that will meet all the equities and circumstances of the case.

Several bills to ac

The Federal Trade Commission Act. complish the suggestions of President Wilson were immediately introduced. Similar bills had often been in Congress during the previous three years but had never been successfully pushed. In this instance the matter was taken up vigorously and one of the bills, the Newlands bill, was ultimately approved.

During the hearings before the Committees on Interstate Commerce two of the activities. suggested for the proposed commission received the most support. The first was that the commission should have power to relieve the doubts of the business community as to what they could do and could not do under the Sherman Anti-Trust Law. Some suggested that the commission should be able to pass upon plans of coöperation submitted to it by business men, and if it decided such coöperation would not be an unreasonable restraint of trade it should issue a license to be held during good behavior or a certificate which would be an estoppel to criminal proceedings if at some later date the Attorney-General should bring suit under the Sherman Law against the parties. The second suggested activity that received hearty approval was that the commission should receive current reports from all corporations, or at least all the large ones, in the various

trades and that it should make public this information thereby protecting the public and benefiting the business community with accurate trade statistics. Neither one of these things has been done by the commission. The first is not done because the law as passed, gave the commission no authority to do this in any way. The second has not yet been accomplished because, although authorized, legal and administrative difficulties have prevented, as will be shown in the following chapter.

The Newlands bill as passed was substantially the same as when introduced except in one respect. That one amendment was Section 5, which provided that unfair competition is ille gal and directed the commission to prevent unfair competition in the way prescribed. Throughout the comparatively long debate in the Senate this section was the center of discussion. The bill was approved on September 26, 1914 (38 Stat. L., 717) provided:

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.

It abolished the Bureau of Corporations and transferred all the bureau's employees, unexpended funds, and records to the commission, which was instructed to continue all the pending investigations and proceedings of the bureau.

It stated "That unfair methods of competition in commerce are hereby declared unlawful. 3

"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."

It then outlined the way in which the commission was to carry out this duty. Briefly stated it is: that whenever the commission has reason to believe that a corporation is using any unfair method of competition, and if the commission thinks a proceeding would be to the interest of the public, it shall issue a complaint stating the charges and setting a date for the hearing. The corporation accused has a right to appear at the hearing and to show cause why an order to cease the practice complained of should not be issued. The testimony at the hearings is reduced to writing and kept on file. If the commission, after the hearing, decides that the method of competition is unfair, it makes a report in writing stating its findings as to facts and issues the corporation an order to cease from that method of competition. If the corporation does not obey such an order, the commission may apply to a circuit court of appeals for the enforcement of its order. Or if the corporation receiving an order wishes to, it may obtain a review of the order in the circuit court of appeals. In either case the findings of the commission as to facts, if supported by testimony, is conclusive.

The law also gave the commission power

3 The law defines commerce as meaning interstate commerce.