FTC

With a trowel once wielded by that eminent revolutionist, George Washington, Franklin D. Roosevelt' last week laid the cornerstone for a new Washington building which will house one of the President's favorite government bodies, the Federal Trade Commission. During most of its life the commission was housed in a scrubby Wartime structure on Constitution Avenue, a fact which the President said aroused his "deepest sympathy." The commission's new quarters, to be ready early next year, will be part of the vast new triangular pile of Government buildings on Pennsylvania and Constitution Avenues, halfway between the White House and the Capitol.

Younger than the Interstate Commerce Commission, older than the Securities & Exchange Commission but much broader in scope than either of them, the Federal Trade Commission is one of those arms of the Federal Government which are so confusing to immigrants and children, fitting nowhere into the neat scheme of legislative, executive and judicial functions. 'Like most of the big independent boards and bureaus, FTC exercises all three functions at once. Founded during another reform era -- Woodrow Wilson's New Freedom -- FTC is charged with 1) prevention DEGi unfair competition, 2) enforcement of certain sections of the Clayton Anti-Trust Act, including the 1936 amendment known as the Robinson-Patman Act. It also has broad investigatory powers. Most famed FTC investigation was the eight-year probe of public utility holding companies, which netted 84 volumes of evidence and resulted in the Public Utility Act of 1935. Big as it is, touching as many phases of business as it does, FTC is only a name to the general public. It has some 550 employes, four regional offices (Chicago, San Francisco, Seattle, Manhattan). It handles thousands of cases each year. Its principal function is protection of the public, yet for every ten U. S. citizens who can name an Interstate Commerce Commissioner or a Securities & Exchanges Commissioner, there is probably only one who could name a member of FTC. Serving seven-year terms, paid $10,000 per year, the five Federal Trade Commissioners are:

Garland Sevier Ferguson Jr., 59, a North Carolina Democrat who was appointed by Calvin Coolidge and reappointed by President Roosevelt though rated the most conservative member of the commission. Much of his legal experience was gained as a lawyer for Southern Ry. In the general division of FTC duties, tall, baldish, able Mr. Ferguson tends to trials and examinations.

Charles Hoyt March, 66, a Hoover appointee reappointed by President Roosevelt; handsome, heavyset, a onetime lawyer whose particular hate is monopolies. His pet case at the moment is the Cement Institute (TIME, July 12). Colonel March's FTC specialty is the legal end.

Ewin Lamar Davis, 61-year-old brother of Ambassador-at-Large Norman H. Davis and Paul Davis, is the commission's most colorful member. Rated a thoroughgoing liberal, he grows apoplectic when anyone insinuates that his decisions might be swayed by the financial connections of his rich brother Paul. A fine speaker, he set a House record when he was a Tennessee Congressman (1919-33), having been allowed to keep the floor for four hours. although the rules impose a one-hour limit. Previously he set another record as a Federal Circuit judge, hearing 12,000 cases in eight years and being reversed only 18 times. Once, while a lynch mob was besieging a jail, he tucked his night shirt into his trousers, hurried to the scene, announced: "This court is now in session. Anyone who violates the court's orders will be sentenced for contempt." When he ordered the crowd to disperse it meekly obeyed.

A ready-witted patriarch with a slow drawl and snow white hair, Commissioner Davis was a Roosevelt appointee, specializes in fraudulent advertising. He once received a bitter complaint from an executive whose salary had been revealed in an FTC hearing. Replied Mr. Davis, cocking his head slyly: "My dear sir, if anybody paid me $90,000--and I really earned it--I would be glad to tell the whole world." William Augustiis Ayres, 70, now FTC chairman (the job rotates from year to year). A tall, slender, Wilsonian liberal who was on the House Naval Affairs Committee when Franklin Roosevelt was Assistant Secretary of the Navy, Mr. Ayres was for years about the only leaf on the Kansas Democratic tree.

Robert Elliott Freer, the baby of the commission (41), oversees the FTC's Economic Division. Mr. Freer, also a Roosevelt appointee, went to FTC from ICC via the Federal Railroad Coordinator's office.

Famed as the most harmonious commission in Washington, the five commissioners lean heavily on such loyal staff members as Chief Counsel William Thomas Kelley, a hulking, red-faced lawyer who booms and beats the table and has been with FTC from the start, more than 20 years ago; his chief assistant, Armand De Birney, onetime ace investigator for the Veteran's Bureau; Economists Francis Walker, jovial Willis Jerome Ballinger and Corwin D. Edwards. Assistant to the chairman and the FTC's pressagent is Joe Baker, tall, slim, leathery, onetime

Washington newshawk, who probably hands out more mimeographed releases and gets more of them into the newspapers than any other pressagent in Washington.

Considerably more than a pressagent. Joe Baker is partly responsible for the public's impression that FTC is chiefly concerned with misnamed "Army & Navy" stores, imaginative cosmetic makers and candy manufacturers who use lottery devices to lure hungry urchins. The vast majority of FTC cases come under the elastic heading "unfair competition," a term which naturally leads it into the trivia of sharp and shady business practice. Anyone may complain to FTC, and sometimes FTC itself takes the initiative. After a preliminary investigation, the FTC may issue a formal complaint against the offender, giving him 20 days to reply. Then FTC holds hearings, comes to a decision. If it is an affirmative decision, FTC then issues a cease-&-desist order, which is a sort of informal injunction. A cease-&-desist order may be appealed to the Circuit Court of Appeals and then to the Supreme Court but reversals are rare. Since 1933 more than 50 FTC cases have reached the Supreme Court but FTC lost only one and that by a 5-to-4 decision.

Simpler, speedier than the cease-&-desist procedure is the "stipulation," a promise exacted from the offender before a formal complaint is issued that he will be good in the future. One of the chief criticisms of FTC is that these stipulations are sometimes used as a defense when the offender gets into trouble with other Government bodies such as the Post Office and the Food & Drug Administration. Famed was the case of the mail-order makers of Marmola tablets, a reducing compound. Driven out of business by the Post Office, the Marmola makers went in for national distribution through retail stores. FTC challenged Marmola's advertising but the Supreme Court held that FTC was not set up for the purpose of "preserving the business of one knave from the unfair competition of another." Typical of FTC trivia last week were cease-&-desist orders against: 1) Coolerator Co. of Duluth, Minn, (iceboxes ) for offensive advertising including disparaging observations on electric refrigerators; 2) Tolpin Studios, Inc.. of Chicago for using the word "Limoges" on china which did not come from Limoges. France; and 3) Strongman Robert C. Hoffman of York, Pa. for fraudulent advertising and belittling his competitor, Manhattan's Strongman Charles Atlas (TIME Feb. 22).

Most significant cases now before FTC are two big anti-trust actions against the cement industry and the window glass makers, and four Robinson-Patman Act cases, notably those involving Standard Brands and Great Atlantic & Pacific Tea Co. FTC's first Robinson-Patman Act cases were closed this week. Dismissed were the complaints filed against Kraft-Phenix Cheese and Bird & Son. Inc. (TIME, Oct. 12). In the Kraft case FTC held that this company's price rating did not lessen or injure competition. In the Bird case, which involved selling floor coverings to Montgomery Ward & Co. for less than the price to retailers, FTC held that the lower price was justified by difference in costs. Moreover Bird no longer sold to retailers, distributing through jobbers who get the same treatment as the mail-order house. But FTC did issue cease-&-desists against two Robinson-Patman violators: Biddle Purchasing Co. (rebates in the form of brokerage commissions from sellers) and Hollywood Hat Co. (for unjustified price discrimination).

This file is automatically generated by a robot program, so reader's discretion is required.