But

"We have here a set of facts alleged in the complaint which was initiated by manufacturers in the same business and not by the Commission, showing that for some time previous to and while the investigation was in progress by the Commission, the respondent was carrying on a practice which it now admits 'had a tendency and capacity to mislead and deceive purchasers.' This practice was discontinued while the investigation was being made (respondent being aware that the investigation was under way) and prior to the time the complaint was issued. the complaint, having been issued and served, the respondent filed an answer on March 11, 1924, denying all of the essential charges. This answer having been published, the business world, including the competitors of respondent, and the purchasers of its products who had been relying upon the representatives of the respondent, were thus informed that respondent challenged and denied the Commission's charges. Subsequent to the filing of the answer by the respondent, and the publicity on the same, competitors of the respondent, through the press, began to call attention to the charges of the Federal Trade Commission and its complaint.

"Ten months went by and then the Commission issued an order which is now made public, dismissing the complaint 'for the reason that the respondent has so modified its business practices as to remove the cause of complaint.'

"How can such an order, without any findings of fact, convey any information to the public relative to the facts, or advise other manufacturers engaged in this particular industry as to the practices which the Commission deems to be unfair, and which will enlighten its members for their information and guidance, and thus the Commission become prophylactic? While it is in no sense the duty or desire of the Commission to persecute business men, nevertheless, when a corporation has practiced a deception, it must inevitably suffer some hardship if there is to be established a legal precedent for the information and guidance of all members of the industry. This can not be done unless the Commission, after functioning in such a case as the present one, publishes the facts upon which the order is based. Such facts will then chart the sea of fair competition for the future on the practice complained of.

"Moreover, it seems to me that competitors of respondent who have sold candles which were honestly branded, and who have lost trade and profit which should under fair competition have accrued to them and which were acquired by the respondent through unfair practices, have a right to expect this Commission to give to honesty and square dealing some measure of recognition and reward by publicly condemning unfair practices and those pursuing them. Moreover, the public has the right to know those who are dealing unfairly with it, so that it can use its choice and discretion in placing its future business. Only in this way will there come to be established in the business world a distinct esprit de corps which will at least make 'honesty the best policy.'

"In the early period of the Commission's history, it tried to set up standards through what were known as 'conference rulings.' These rulings were brought about, when an informal complaint was made against a party, by the Commission going through the same procedure that it now employs

except that the Commission did not name the offender when it gave out the findings. That practice, while much more valuable than the present one of not giving out any findings, was a failureso much so that the Commission at the time was severely criticised for being inept. A reading of the conference rulings, of which there were many, explains the reason for this. These rulings were little heeded by the business world. In fact, there was often more than one conference ruling on almost identical subjects and situations. It was not until the Commission tied up the ruling with the name of the offender that it began to function with effect. "The making of wrong a personal matter, causes a shrinking by the offender and may be a hardship on him, but the rights of the consuming public to be put upon notice, and of the competitor to be protected from unfair business practices, far outweighs the damage done to the reputation of the one committing the wrong.

"When the Commission learned that respondent's competitors, after respondent had filed its answer denying the charges, were using the complaint to advertise the charges against respondent, the Commission ordered this practice to cease. We would do well to consider that if the Commission continues its policy of issuing complaints and dismissing them, as in this case, without findings informing the public and the competitors as to what was done, it would be only human for the competitors to indulge in the practice of advertising the respondent's shortcomings in order that they may get even for the losses that they have sustained by reason of such practices.

"In a statement with respect to practices involving deceit, bad faith, etc., the 'Unfair Competition Bureau of the Paint and Varnish Industry,' through its representative M. Q. Macdonald, says:

THE

'HE Sherman Anti-Trust Law was passed in 1890. Proper agencies for its enforcement were not provided, and for fourteen years it was practically inoperative. The winning of the Northern Securities Case in 1905 marked the real beginning of its practical enforcement.

For about six years prosecutions under its provisions continued, when the "rule of reason" decision of the Supreme Court cut down its usefulness as a preventive and corrective of trust-making activities.

In 1914 the Federal Trade Commission was created and in the same year came the Clayton Act, which for the first time specifically defined certain unfair trade practices, such as price-fixing, production curtailment, boycotting, and monopoly.

To the Federal Trade Commission, with the Department of Justice as a more or less active ally, fell the duty of enforcing these two laws. The Sherman Law contained the basic principles on which it

functioned, while the Clayton Act gave definition to its powers.

A crippling blow was dealt the Commission, on June 1st of this year, when by one of its majority I decisions the Supreme Court decided that combinations of business firms in the form of trade associations, concerns which have heretofore been competing, may legally reveal all their trade secrets for the purpose of "the acquisition of wider and more scientific knowledge of business conditions," even though the natural result is cessation of competition, price-fixing, and curtailment of production.

This decision, dissented from by Justices Taft and McReynolds, is expected greatly to stimulate the growth of the existing price-fixing associations and the numerical increase of such combinations. By it sections of the Clayton Act and the Sherman Law are rendered unenforceable and inoperative.

Concerning the Aluminum Trust IT on mitted

IT WAS on October 17, 1924, that the Federal its report on "Kitchen Furnishings and Domestic Appliances" to the Attorney General, who was then Harlan F. Stone. The part of this report relating to the Aluminum Company of America, which is Secretary of the Treasury Mellon's concern, apparently was as impressive to Mr. Stone as it was displeasing to President Coolidge.

In a letter to the Commission, dated January 30, 1925, Attorney General Stone made the following comment with respect to the Aluminum Trust (the italics being ours):

"Your report covers two phases of the Aluminum industry: "1. Competitive conditions; and

"2. Decree against the Aluminum Company. "To understand the importance of the decree, competitive conditions become important.

"Your report lists thirty companies as being engaged in the manufacture of spun and stamped aluminum ware. It does not include the manufacturers of cast aluminum ware. "The Aluminum Goods Manufacturing Company of Manitowoc, Wis., is the largest manufacturer of aluminum cooking utensils. Nearly 31% of its capital stock is owned by the Aluminum Company of America. The latter company has two of the six members on the board of directors of the Manufacturing Company, and practically controls its policies. "The second largest manufacturer of aluminum cooking utensils, is the United States Aluminum Company, which is 100% owned by the Aluminum Company of America.

"These two companies produce about 65% of the total output of aluminum cooking utensils.

"When the Aluminum Goods Manufacturing Company was organized in March, 1909, it took over the business of two Wisconsin and one New Jersey Company. Later, the New Jersey Company sold its interest to the Wisconsin Companies. These three companies, at the time they were absorbed by the Aluminum Goods Company in 1909, had for some ten years been active competitors.

"In 1924, the Aluminum Goods Manufacturing Company submitted to your Commission a plan looking to the purchase of the entire New Kensington, Pa., business and property of the United States Aluminum Company and the Aluminum Cooking Utensil Company, subsidiaries of the Aluminum Company of America, engaged in the manufacture and sale of cooking utensils; and also the Toronto, Canada, subsidiary of that Company, operated under the name of Northern Aluminum Company, Ltd., and having a rolling-mill and manufacturing plant in that city.

"You state that the combined cooking utensil output, in 1920 and 1921, of the Aluminum Goods Manufacturing Com

pany, and of the plants it desired to purchase, was at least twice as large as the total combined output of all other competing companies. You further state that the New Kensington plant has in the past supplied a substantial portion of the requirements of sheet aluminum for the cooking utensil companies.

"Your report does not show whether the proposed plan of purchase was completed; but you state that such a merger is entirely inconsistent with the Anti-Trust laws of the United States.

"The Aluminum Goods Manufacturing Company rolls practically all of the sheet aluminum used in its present three owned plants, each being equipped with a rolling-mill.

"The independent manufacturers of Aluminum kitchen utensils are almost entirely dependent upon the Aluminum Company of America for their supply of raw materials, the quantity imported being relatively small.

"The Aluminum Company of America at present controls more than 90% of all known deposits of Bauxite in North America that are of such a character that aluminum can be manufactured therefrom in commercial quantities. Having this practically complete control of the sources of supply of the raw materials, it is in a position to and does control the domestic price of sheet aluminum to utensil manufacturers.

"Briefly stated, the above represents the competitive conditions of the aluminum industry in the United States.

"The decree perpetually enjoined the Aluminum Company of America, its officers and agents, among other things, from:

"1. Without reasonable cause and notice, delaying shipments of materials to a competitor;

"2. Refusing to ship, or ceasing to ship, crude or semifinished aluminum to a competitor, on contracts or orders placed, or on partially filled orders;

"3. Charging a competitor higher prices for crude or semi-finished aluminum than are charged at the same time, under like or similar conditions, a company in which defendant was interested;

"4. Refusing to sell crude or semi-finished aluminum to a prospective competitor, upon like terms and conditions of sale, under like or similar circumstances, as defendant sells the same to any company in which it is financially interested; and

"5. From furnishing competitors known defective material. "The complaints of competitors, with respect to deliveries and quality of materials furnished, may be classified as follows:

"1. Cancellation of quotas;

"2. Refusal of promise shipments;

"3. Unreasonable delays in deliveries;

"4. Where two or more gauges of metal are ordered, shipping one kind or gauge, and withholding shipment of the other;

"5. Unreasonably delaying shipment, and then suddenly dumping upon the competitor large quantities of metal;

"6. Unreasonably delaying shipment, and then suddenly dumping upon competitors large quantities of metal, shortly after they have been forced to purchase foreign metal to supply their necessities; and

7. Shipping competitors large quantities of materials known at the time of shipment to be defective.

"Without attempting to review the evidence submitted in your report, it is sufficient to say that the evidence submitted, supports to a greater or less extent, the above recited complaints of the competitors. And especially is that clear and convincing in respect to the repeated shipments of defective materials, known at the time of shipment to be defective. This became so common and so flagrant as to call forth remonstrances from Mr. Fulton of the Chicago office of the Company.

"It is apparent, therefore, that during the time covered by your report, the Aluminum Company of America violated several provisions of the decree. That with respect to some of the practices complained of, they were so frequent and long continued, the fair inference is the Company either was indifferent to the provisions of the decree, or knowingly intended that its provisions should be disregarded, with a view to suppressing competition in the aluminum industry. "There does not appear to be much in your report touching the methods of the Company since the year 1922.

"In order that the Department may act with full knowledge of the course of conduct of the Company up to the present time, I have instructed that the investigation of the

facts be brought down to date by the Department of Justice. This will not interfere in any way with any further investigation which the Federal Trade Commission may find it proper to make."

The obvious inference is that the then Attorney General regarded it is as his duty to proceed against Mr. Mellon's Aluminum Trust.

Very quickly, however, Mr. Stone was removed from that law-enforcement position by being promoted to a place on the Supreme Court.

Whether or not his endorsement of the Federal Trade Commission's disclosures in this connection had anything to do with that sudden change of Attorneys General, we cannot say; but there are well-informed observers in Washington who believe that therein lies the explanation.

At any rate, it would be interesting now to know exactly what the present Attorney General is doing, or expects to do, with respect to the Aluminum Trust.

concerns.

Mellon, one of the world's richest men, is the dictator and principal owner of one of its greatest monopolies, the Aluminum Company of America, and it was the exposure of its unfair practices which led President Coolidge to determine to "reorganize" the Federal Trade Commission.

At the time that Mr. Hoover entered the public service he and his associates controlled organizations said to employ 175,000 men. When he gained a position of world power he began the formation of a gigantic human machine whose personnel penetrated all the departments of the Government at Washington and had a part in the administration of almost every activity of business-in-government abroad.

Big Business found in him an energetic and powerful ally when it went out to destroy the Federal Trade Commission.

Soon after he became head of the Commerce Department moves were inaugurated to transfer certain functions of the Trade Commission to his branch of the Government. Hoover personally addressed a questionnaire to the then Attorney General, Harry M. Daugherty, citing certain practices of Big Business which were forbidden by the Federal Trade Commission and asking for an opinion as to the legality of such acts. Daugherty very promptly answered with a decision that the practices were unlawful.

Following this Hoover became an active crusader against "Bureaucracy by inference," classing the Federal Trade Commission with the little bureaus and commissions which should be abolished.

In a speech before Big Business' propaganda organization in Washington, The National Chamber of Commerce, Hoover noted the fact that there were

200 different bureaus, boards, and commissions, employing several hundred thousand persons. Then he backed up Commissioner Humphrey, of the Federal Trade Commission, who was attacking that body before the same audience, by saying that one of the greatest dangers of the period was "the steady tide of Federal encroachments into State authorityand beyond this a steady thrust of the arm of the Federal Government into our private business."

Hoover's Department of Commerce has already been given control of the Bureau of Foreign and Domestic Commerce, the Bureau of the Census, the Bureau of Standards, the Bureau of Fisheries, the Bureau of Lighthouses, the Bureau of Navigation, the Coast and Geodetic Survey, the Steamboat Inspection Service, the Patent Office, the Bureau of Mines, and now inspired newspaper statements promise to him control of the Tariff Board and the Federal Trade Commission.

SE

Norris Sums It Up

ENATOR NORRIS, in a press report of an interview, on May 7, thus summed up what President Coolidge had been doing to destroy the usefulness of the Federal Trade, Interstate Commerce, and Tariff Commissions:

"As a result of the deliberate policy of this Administration to destroy the independence and effectiveness of these agencies, originally intended as independent, judicial regulatory bodies, and to pack them with reactionaries, obedient to the will of the interests to be regulated, the usefulness of all three Commissions has ceased.

"They are now nothing more than rubber stamps for the railroad interests and high tariff seekers. By putting Humphrey on the Federal Trade Commission, President Coolidge, perhaps unconsciously, but no less effectively, destroyed at one stroke the whole purpose of that body. It is being shown daily in the wholesale dismissal of complaints against business concerns and the policy of secrecy upon all proceedings.

"Everybody can see what has happened in the Tariff Commission. Commissioners Lewis and Culberson were the two who fought against the evil practices in that body and who had the independence to recommend a cut in the sugar duty. Culberson has been ousted via diplomatic appointment and Lewis was forced out after he refused to take a hint, that, in order to stay, he would have to obey the wishes of the high tariff powers.

"The Interstate Commerce Commission is just another example of the same thing. President Coolidge put Woodlock, a railroad man, whose whole life and whose entire interests were wrapped up in defense of the railroads, into that judicial body. However honest these men may be personally, it is a mockery to put such biased judges in these places. "I cannot understand the total indifference of the public to these things. They are going on under our eyes and save for one or two of us, who perhaps foolishly continue to believe in some of the fundamentals and principles at stake, nobody seems to care a whoop about it."

The Present Personnel

"HIS Commission was created in 1914. Ex-Presi

Commissioners:

Joseph E. Davies, Wisconsin, for seven years; Edward N. Hurley, Illinois, for six years; Wm. J. Harris, Georgia, for five years; Wm. H. Parry, Washington, for four years; George Rublee, New Hampshire, for three years. The Republican Old Guard in the Senate refused to confirm the appointment of Mr. Rublee. All the others were confirmed March 2, 1915.

Later, in 1917, John Franklin Fort, New Jersey, was appointed.

The present Commission, whose functioning we have described, is composed of

Vernon W. Van Fleet, appointed by Harding, whose term expires September 25, 1928.

John F. Nugent, appointed by Wilson, whose term expires September 25, 1927.

Huston Thompson, appointed by Wilson, whose term expires September 25, 1926.

Chas. W. Hunt, appointed by Coolidge, whose term expires September 25, 1925.

Wm. E. Humphrey, appointed by Coolidge, whose term expires September 25, 1931.