find a post-office address that is similar and adopt the name for his trade firm or corporation that is so similar that confusion results.

(The list of causes was later supplied and is as follows:)

In the applications involving unfair methods of competition the practices complained of, which were alleged to be unfair methods of competition, include: Advertising: False and misleading. Refusal to accept.

Bogus independents.

Commission's letter, misue of.

Commission's order, disobedience of.

Combination of buyers to force down prices by refusal to purchase.

Conspiracy: To injure competitor. Black lists. To eliminate competition and maintain exorbitant prices.

Contracts: Abrogation of. Exclusive agency. Exclusive dealing (full line forcing). Inducing breach of.

Defamation: Libel.

Division of territory.

Slander.

Fraudulent marking of goods.

Impairment of competitive power of other concerns by stock control.
Intimidation: Threats. Boycott Molestation or obstruction.

Joint selling agencies.

Mergers.

Making up cost sheets "in reckless disregard of true costs."

Price agreements.

Price cutting: General. Local. Free goods or premiums (trading in).

Price enhancement of product.

Price enhancement of products, combinations.

Price enhancement of raw material.

Price fixing: By associations and combinations. By individuals and corporations. Prices, charging excessive for necessary supplies.

Prosecution and persecution of alleged infringers of patents.

Using cars obtained for Government purposes for private purposes.

Mr. BOIES. Has the question ever been raised with reference to the law covering all this broad field that you have named, giving the commission the authority to make men behave themselves?

Mr. COLVER. In each one of the cases, the general classes that I have spoken of; cases have been brought a number of times, many

times. The courts are open and the scope of the law and the jurisdiction of the commission have not been questioned

Mr. CURRIE. What does the commission do in those cases where a man is charged with speaking falsely or in derogation of another man's business, and where there is remedy at law?

Mr. COLVER. I mean the courts would be open for appeal. If our decisions in those cases have not been right and proper, the courts are open for review.

Mr. CURRIE. What advantage would there be in going before the Federal Trade Commission in cases such as I have suggested?

Mr. COLVER. That brings up an important question, for which Congress in its wisdom has very carefully provided and which we live. up to very carefully. Early in the history of the commission that very point was raised and a respondent would seek to put in as a plea in bar the fact that there was adequate remedy at law. But Congress provided otherwise. Congress said when the commission shall have reason to believe that an unfair method in commerce is practiced "and it shall appear to be in the public interest that further proceedings shall be had," then it shall issue its formal complaint. So that unfair competition is a wrong in common law and if there is no wrong without a remedy, in equity at least-any sort of unfair competition should find a hearing in a court of equity if not in a court of law.

Mr. CURRIE. Mr. Colver, the point I have in mind is this. What judgment would be rendered by your commission which would be different or more effective than the judgment of a court? For instance, you say it is wrong and tell him to quit. What else would you say? Mr. COLVER. Nothing; and the order to quit injunction. That is what he would get in equity. damages he would resort to a court of law.

is a permanent If there are any

Mr. GOODY KOONTZ. What advantage would the complainant get from your order which he would not get from an appeal to the court? What advantage would there be in coming to your tribunal rather than into a court? Would you dispose of the matter with more facility or with more effectiveness?

Mr. COLVER. Yes, I think answers might be made from several approaches to your question. In the first place the hearing and the trial of the matter would be less formal. It would be less bound by the strict rules and you would come more nearly to getting a complete expression of the facts and the commission would feel free to inform itself as to the general condition of the trade affected by that practice, whether or not the public interest as well as the two adversaries were affected by it. I think the judgment would be more speedy than in an action at law. The judgment, having been granted, would leave all the remedies at law and in equity for the parties anyway. It is not a bar to any private law suit.

Mr. GOODY KOONTZ. The main difference between proceedings in court between litigants themselves would be that here the Government originates the complaint itself and by this procedure that you have outlined.

Mr. COLVER. Yes, sir.

Mr. MORGAN. Mr. Colver, I do not know whether it has been gone over or not, because I could not be here yesterday, but I would be

interested in knowing, if you desire to make a statement, what can be done by Congress to make the Federal Trade Commission more beneficial and effective. In other words, do you come here making suggestions of necessary legislation that you need, or have you made them already?

Mr. STEELE. A number of suggested amendments were made yesterday in your absence, Mr. Morgan.

Mr. MORGAN. Then I do not care to go into it again.

Mr. COLVER. I have taken a great deal more time on this procedure now than I expected to and I hope I have not wearied the committee with it.

Mr. STEELE. It has been very interesting and informing, and I would like to ask one more question before you leave it. You referred to a trial. Is that a public trial in which only one member of the commission sits or the whole commission sits?

Mr. COLVER. The trial is had according to the procedure laid down by Congress; that is, by the whole commission, by a commissioner, by any number of commissioners, by an examiner delegated by the commissioners. And in any case the hearing is an open one and the evidence is reduced to a written record. The referee or the attorney digests or briefs the record and the respondent's attorney makes his brief and then, before the whole commission, a quorum being present, of course-I mean that the commission would not refuse to sit if one member was ill, but in the usual sense before a full commission-the case is fully heard on the briefs and the argument of counsel.

Mr. STEELE. On the hearing, do the legal rules as to the admissibility and competency of evidence apply?

Mr. COLVER. The proceeding is very much like a hearing before a referee or master. Where these hearings are had, for the accommodation of parties, often times, in different parts of the country, in order that it may not be necessary to come back to the commission and have a ruling on the point of admissibility of evidence, the evidence is offered and the master or commissioner who may be hearing it can rule it out if, in his judgment, it is obviously not admissible, but if there is any doubt in its favor the exception is saved and, at the time of the hearing before the full commission, the exception can be argued and the whole line of testimony, the particular testimony or the particular answer or question can be ruled out.

Mr. STEELE. Then you do endeavor to apply the legal rules? Mr. COLVER. Oh, yes; very carefully. Now, just one word in regard to criticism of the procedure of the commission.

The CHAIRMAN. Mr. Colver, if you will pardon me, I think we would like to know more particularly what suggestions you may have as to legislation. I think we are pretty well satisfied as to the procedure. I have heard no complaint myself.

Mr. COLVER. Of course, I yield to the chairman, but if I could have three minutes to finish the last point, I will be glad to take up the question of legislation.

The CHAIRMAN. You may proceed in your own way.

Mr. COLVER. So long as it is insistently said that we are disregarding the directions that you have given us and that our proceeding is a disorderly proceeding, and that the duties that you have laid upon us are not being carried out in an orderly and a proper way, we can not come before you here and suggest the giving to us of any further

duties. I am not talking about power now, I am talking about duties.

Mr. YATES. Who is it that persistently says this? The Chairman has said that he has heard no complaint. I am not asking for the names of individuals, but from what source does this complaint come?

Mr. COLVER. Well, if I were going to try to find the wellspring of it I would go to the Chicago bar.

Mr. IGOE. Have not the complaints come largely on account of the investigations under the direction of Congress and of the President rather than on the proceedings for application for complaint and complaints against unfair practices?

Mr. COLVER. Exactly so, and my first statement was that, wittingly or unwittingly, with purpose or without purpose, there is a persistent effort to mix up these three proceedings and to claim for these proceedings ordered by the President or by Congress the procedure which is not applicable to them.

Mr. GATES. You spoke of the proceedings being disorderly. do you mean by that?

What

Mr. COLVER. I mean in the sense of not being orderly-not following established practice.

Mr. GOODYKOONTZ. Mr. Commissioner, the only thought that came to me about procedure is that perhaps you might during the initial steps form a conclusion-in other words, prejudge the case; that perhaps your procedure was subject to that objection. That is the thought I had in mind.

Mr. COLVER. To those who make that statement, we can look them in the eye and say honestly that that is not the fact. The commission knows practically nothing and I think I can use the word nothing about the detailed procedure of sifting out the chaff from what come before them in these proceedings. We have too many other things to do.

Mr. GOODYKOONTZ. Your counsel and assistants attend to that? Mr. COLVER. Yes, sir. This is true, and it is naturally true, that as the staff comes to us with its conclusions and I suppose the members of the staff will not like to hear me say this-they come to a commission naturally prejudiced a bit against their findings for the reason that we can not help but feel that the staff is trying earnestly and honestly, and as we want them to do, to make good their cases, and so we supply the elemnt of doubt. It comes as naturally as it comes to the judge to be doubtful as to his prosecutor, as to whether his prosecutor is trying to get justice or trying to win his case, witout any suspicion or disfavor with regard to the prosecutor.

Now, the last thing that I want to say is that the complaint that is most made is, not that we do not hear the respondents before the issuance of complaint, but that we issue the complaint at all. They say, "You are investigating me. If you find anything that will warrant the issuance of a complaint, tell us, and we will stop it." Now, the law says that if we have reason to believe that an unfair method is being practiced, and if it is in the public interest to have it corrected, the commission shall issue its complaint. There is no side door. There is no private office about it at all. Congress did not tell us to run a shop for the dispensing of immunities or to fix things. up privately between competitors. They told us that if a wrong was

being done and if it was in the public interest to have it corrected, that we should proceed to correct it, and we do.

Why? If the procession of these 176 cases had come through an office as being cases where not only should the complaint be issued, but where in 153 cases the respondent himself admitted the fault, without any contest at all, if in those 153 cases there had been 153 secret quiet compositions of a business difficulty, what good would the public have gotten from it? We would then be running a bureau for the adjustment of private grievances. A man would come and complain that he was being hurt by his competitor. We would call in his competitor, and try to fix up a deal between them. Where would the public come in on a proceeding of that kind? Nowhere. One hundred and fifty-three times a signboard has been put up for the guidance of business, that a certain line of conduct has been admitted to be bad by the men who practiced it, and other concerns guide themselves by those 153 cases. That is where the public service and the public interest and the service to business comes in.

Mr. MORGAN. Has there been any inclination on the part of a party who has already been before the commission to come before it again on a repetition of the offense?

Mr. COLVER. În some cases there has been a disposition to violate an order to cease and desist. In no case has that disposition flowered so far, as yet, that the respondent has been called before the Federal court for further proceedings. In quite a number of cases it has been found necessary to warn them that they were getting dangerously close to a breach of the injunction, and in every case, I think, it has been corrected.

Now, let us leave the question of procedure. I am sorry that I have taken so much time on it, but this commission can scarcely come before a committee of this kind without feeling that it ought to explain its methods of procedure.

The CHAIRMAN. I do not think the commission needs to come here and defend itself. So far as I know, I do not think it needs any defense.

Mr. STEELE. Members of Congress know something about criticism, too.

The CHAIRMAN. A man who has been accused of a crime never likes the law, we are not surprised to find a little kicking, the very fact that some are kicking indicates that you have been doing something.

Mr. GOODYKOONTZ. Mr. Commissioner, I would like to have a copy of the organic act and a copy of your report, not for the hearing, but for my own private use, if you have them.

Mr. COLVER. I will be glad to furnish them to you. Chairman Murdock yesterday went over rather in detail both the organic act of the Federal Trade Commission and the Clayton law, and suggested certain amendments and changes of phraseology, and one thing and another, which in the opinion of the commission would tend to make a snugger and better fitting job for execution. I have another suggestion to make. There has grown up in this country, and is growing now, an entirely new form of trust, and an entirely new method of destruction of competition. The 1920 model trust is a thing that is entirely outside of any law that Congress has passed. It is beyond the vision of the courts up to the present moment. The