F5L ■ HD29^8 Cornell University Library HD 2968.U58 Draft of bill submitted by Allen Riple r 3 1924 013 871 730 DRAFT OF BILL SUBMITTED BY ALLEN RIPLEY FOOTE N" THE COMMITTEE ON INTERSTATE COMMERCE A BILL PROMOTE AGRICULTURE AND COMMERCE BY PROVIDING FOR THE ORGANIZATION AND REGULATION OF COOPERATIVE ASSOCIATIONS AND THE CREATION OF A BUREAU OF COMMERCE Printed for the uee of the Committee WASHINGTON GOVERNMENT PRINTING OFFICE 1912 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013871730 INDEX- TO SECTIONS. Section. Page of explana- tion. Page of bill. 5 1 6 17 2 6 17 3 6 18 4 7 18 5 7 20 6 7 20 7 7 20 8 8 20 9 8 20 10 8 20 11 8 21 12 8 21 13 8 21 14 8 21 15 9 21 16 9 21 17 9 22 18 9 22 19 9 22 20 10 22 21 10 23 22 10 23 23 10 23 24 10 23 25 10 23 26 10 23 27 10 24 Introductory. Application of act. Definitions. Who may organize local, district and national coopera- tive associations. Purposes for which cooperative associations may be organized . Classification of associations. ADMINISTRATION. Creation of a Bureau of Commerce. — Commissioner of Commerce. Deputy Commissioner of Commerce. Rules and regulations. — Publication. — Transmission to Congress. Rules for the organization of cooperative associations. By-laws. Application for certificate of organization. Recording fee. Annual and special reports. — Penalty for failure to report. Annual organization fee.- — Penalty for failure to pay. Cooperative association fund. — -How accumulated and used. — Payment of excess expenses. ANNUAL STATEMENT AND TECHNICAL RULES. One condition of membership. Special commission on technical rules. Members of the commission on technical rules. Convening of the commission. — Rules for its government. Approval of the rules, standards, forms, and instructions formulated and adopted by the commission on technical rules. Compensation of members and provision for the expenses of the commission. Responsibility of official auditors. — Penalty for false statement. — Jurisdiction of proceedings. Annual statements, where . filed. — Copies furnished to departments of Federal Government and governors of States. Information for regulation and taxation. — Accounts and business can not be investigated unless information in statement is incorrect or fraudulent or violation of law is charged. TERMS OF SERVICE AND COMPENSATIONS. Commissioner. — Term of service and compensation. Deputy commissioners. — Term of service and compensa- tion. Appointment and compensation of bureau and district employees. — Expenses. (3) Section. Page of explana- tion. Page of bill. ORDER FOR INVESTIGATION. 28 11 24 How an order for an investigation may originate. 29 11 24 Original investigation by deputy commissioner ordered. 30 11 24 Action of deputy on order for original investigation. Powers of deputy when holding hearings. — Jurisdiction 31 11 24 of United States district court judges. 32 11 24 Action and report of deputy commissioner. 33 11 25 Action of commissioner on deputy's report. 34 11 25 Investigation ordered by commissioner. 35 12 25 Creation of a board of investigation by the commissioner. 36 12 25 Qualifications to serve as a member of a board of investi- gation. 37 12 25 Notice of appointment. — Date when investigation shall commence. 38 12 25 Oath of office. 39 12 26 Stenographers, clerks, experts, and expenses of an inves- tigation. INVESTIGATION AND REPORT. 40 12 26 Investigation. — Report and recommendations. 41 12 26 Recommendations of a board of investigation final as re- gards action by the Bureau of Commerce. — Appeal may be made to United States district court. 42 13 26 Report of board transmitted to commissioner. — Minority report. 43 13 26 Publication and distribution of reports. — Certified copies. 44 13 27 Defendants guilty of an indictable offense.— Penaltv. — May cease to offend. HEARINGS OF BOARDS OF INVESTIGATION. 45 13 27 Hearings of board.— When and where held. 46 13 27 Proceedings public. — May have private hearings. 47 13 27 Decision by two members. 48 13 27 Quorum of board . 49 13 27 Absence of a member. 50 14 27 Appearance of parties. 51 14 28 When counsel may be appointed by the Attorney General. 52 14 28 Contempt of board. — Penalty. POWERS OF BOARD — WITNESSES AND EVIDENCE. 53 14 28 Powers of board. — Witnesses and evidence. 54 14 28 Oath administered by member of board. 55 14 28 Signature of chairman to summons and orders. 56 14 28 Inspection of books and documents. 57 14 28 Parties as witnesses. 58 14 28 Expenses of witnesses. 59 14 28 Failure of witnesses to attend or to produce documents. — Penalty. Employment of experts. 60 14 29 61 14 29 Remuneration of board. 62 15 29 Traveling expenses. 63 15 29 Acceptance of a gratuity prohibited. — Penalty. 64 15 29 Vouchers for expenses.— Detailed statement o"f hearings. MISCELLANEOUS PROVISIONS. 65 15 30 Technical irregularities. 66 15 30 Report as evidence. 67 15 30 Allowances determined by commissioner. 68 15 30 Annual report to Congress. 69 15 30 Act not to repeal, annul, or in any way affect the act. of July 2, 1890. 15 1 Conclusions. 16 [ Fundamental purposes. EXPLANATION OF THE BILL. INTRODUCTORY. This bill is a far-reaching progressive measure. It is designed to cause all laws enacted and all regulations prescribed for the govern- ment of business methods to aid in promoting profit making through the development of economic efficiency by utilizing, to the limit of their possible helpfulness, all facilities for the improvement of pro- duction and commerce devised by present-day knowledge, experi- ence, skill, and science. The fundamental proposition is to disseminate knowledge and pro- vide training with respect to business efficiency as a business, not as a political undertaking. This bill provides that practical business men who are best informed by experience regarding business methods, the reasons for their exist- ence, and the purposes the}' serve, shall be charged with the duty of their supervision. Such men will know, far better than anyone else can, precisely when and how a business method should be changed, in order to secure a full utilization of all opportunities created by improved facilities, or to adjust such method to the requirements of a more enlightened conception of moral and economic justice. Such men will be able to show those affected by the changes they may recommend how they can be made without unsettling business stability, injuring any business investment, or making anyone liable to a criminal prosecution. This bill substitutes a regulation of business by business men dealing with flexible business methods for the existing disastrous attempt to regulate business by applying the edicts of inflexible statutory laws enacted to satisfy the demands of political expediency, in ignorance of and in disregard for the requirements of business. The problem is immense, almost infinite in its scope and com- plexity, but relatively very simple as to each individual case when all of the relevant facts are ascertained and clearly understood. Every cooperative association, organized as provided in this bill, will create a clearing house for dealing with each individual case as it arises, without impairing the validity or force of the fundamental law. The reports of these cooperative associations will keep the Bureau of Commerce in close touch all the time with everyone doing an inter- state or foreign business, and the keen, interested watchfulness of their members will have the desired effect of keeping each of them in line with tie adopted standards. The enactment of this bill into law will end the academic, obstruc- tive, and destructive discussion which has caused so much confusion and a vast amount of business trouble. Business interests will find in it a satisfactory solution of the problems involved. The people (5) will find in it a practical working*plan that will enable the Government to perform its true function, which is to promote agriculture and com- merce, not to restrain the activities of capable business men. Cooperation between civilized men is a life-giving necessity for the development of individual intelligence, character, and ability. It is the means by which the least capable can acquire intelligence and share in the profits made possible Dy the skillful management of the most capable. Desire, ability, and power to cooperate are natural products of intelligence. They are born with its birth ; they grow with its growth ; their application to business methods is its highest manifestation. Every improvement in business facilities renders the utilization of the power to cooperate imperatively necessary in order that the development of economic efficiency may be unrestrained. The development of economic efficiency must be the objective point of governmental regulation, as well as of all business undertak- ings, if individual and national welfare is to be effectively safeguarded. Laws must change and business methods must change to keep in true accord with changes in business facilities. ' To be right and just, laws and business methods must be correctly aligned with the requirements of moral and economic laws. |f> EXPLANATIONS. Section 1 . Application of the act. — Properly to promote agricul- ture and commerce this act must apply to all persons, firms, partner- ships, corporations, and associations engaged in the business of grow- ing, manufacturing, or otherwise producing, buying, selling, storing, or transporting one or more articles of commerce. This does not include banking, insurance, and all forms of fiduciary business. Sec. 2. Definitions. — To serve the purpose of accuracy in under- standing and construing this act the following words are defined : (a) Cooperative associations, (b) application, (c) certificate, (d) order, (e) persons, (/) operator, (g) cooperator, (h) statement, (i) economic profit, (j) capital, (k) capital owned, (Z) capital bor- rowed, (m) secretary, (n) department, (o) commissioner, (p) deputy commissioner, (q) bureau, (r) board, (s) judge, (t) prescribed. Sec. 3. Who may organize local, district, and national cooperative associations. — Three or more persons, firms, partnerships, corpora- tions, or associations independently engaged in the business of grow- ing, manufacturing, or otherwise producing, selling, storing, or transporting one or more articles of commerce may organize a cooper- ative association. The law of economic efficiency is the cohesive force that will induce, compel, and maintain cooperation between persons by com- bining them into organized business units to deal with the limited business of local communities, and then forcing a more far-reaching cooperation between persons and local cooperative associations by creating district associations capable of handling the business of a State or of a United States judicial district; and again by organ- izing persons, local, and district associations into national associa- tions capable of handling business throughout the country and the world. The guide to organization will be identity of purpose and simi- larity in field of operation, not necessarily identity of products or a prescribed amount of capital. Sec. 4. Purposes for which cooperative associations may be organ- ized. — A correct solution of the problem of how to induce prosperity for all of the people demands the creation of conditions that will insure business stability and business profits. Every purpose stated in the 15 paragraphs of this section has this result as its objective point. The first two paragraphs are: First. "To promote profit making by establishing business methods correctly conforming with the requirements of moral and economic justice. Second. "To stimulate the activity, sustain, and develop the growth of the business of those having small capital by safeguarding their profits as a means of preventing a partial or complete monopoli- zation of any article of commerce through the absorption of those having small capital by those having or controlling large capital." The other paragraphs in this section give emphasis to specifications germane to the purposes above stated. Every purpose stated in these specifications will be recognized as being necessary to the successful promotion of agriculture and com- merce and for the prompt, effective, and intelligent regulation of busi- ness methods. Sec. 5. Classification of cooperative associations. — For the conveni- ence of regulation, the preparation of by-laws, rules, reports, and operation it is provided that cooperative associations may be classified as local, district, or national, and also by the character of the business they operate or the services they render. ADMINISTRATION. Sec. 6. Creation of a bureau of commerce. — A bureau for the regu- lation of commerce must exercise supervision over all persons engaged in commerce, not merely those who are operating as corporations. The law should be identical for unincorporated and incorporated busi- ness, since business methods that are right for one are right for the other. A well-paid commissioner should be responsible for the admin- - istration of the bureau. Sec. 7. — Deputy commissioner of commerce. — To secure intelligent and effective administration, it is necessary that a district deputy commissioner be appointed for each United States judicial district, who can represent the bureau on the one hand and the cooperators on the other hand. By reason of his personal acquaintance with all operators and business conditions in his district, his information and recommendations will be of the highest value to business interests and to the Government. Through his work, better than in any other way, a cordial cooperation between cooperators and the Government can be developed and maintained. A deputy commissioner, if sufficiently active, intelligent, and capa- ble, can win the confidence of every cooperator in his district. By becoming thoroughly well informed regarding their problems he can demonstrate to the bureau precisely what benefits may be secured through new legislation or the amendment of existing laws. This will end the attempt to regulate business by laws enacted to satisfy 8 some poetically created contingency. It will give stability to busi- ness conditions, so far as they are affected by statutory laws, and stability to the policy of the Government, so far as it relates to the regulation of business. . A deputy commissioner should make the administration or his office his life's work and be assured that he can hold his position as long as his services are satisfactory to the cooperators in his district and to the bureau. Sec. 8. Rules and regulations. — No law can automatically explain and enforce itself. The administrative work necessary to carry into practical effect the true intent of this act must be educational to a very large extent. Uniformity in business methods will be the prod- uct of uniform rules and regulations uniformly explained and enforced. This section conforms in its essential requirements with the pro- visions of the Canadian combines' investigation act of May 4, 1910. Sec. 9. Rules for the organization of cooperative associations. — Uni- form rules for the organization of cooperative associations are as essential to their successful interrelated operation as uniform com- mercial standards and business methods. To be uniform it is neces- sary that they shall be prescribed by the central authority of the bureau. Sec. 10. By-laws. — By-laws for the domestic government of each •association should be uniform in their framework, allowing sufficient latitude for the expression of individual characteristics due to loca- tion, kind of business, the individual circumstances, tastes, and views ■of its members. Sec. 11. Application for certificate of organization. — This provision is necessary to establish a recognized relationship between the asso- ciation and the bureau. Sec. 12. Recording fee. — The recording fee of one sixhundredth of 1 per cent of the aggregate capital employed in the business repre- sented by all members is the basic source of revenue provided for the support of the bureau. No recording fee shall be less than $5. Sec. 13. Annual and special reports. — Information secured from the contents of uniform annual reports, and from such special reports as may be required, will enable the bureau to administer this law intelligently. The welfare of' every cooperator will be served by having all reports required made correctly and promptly. The fine imposed for failure to report is only a compensation for the injury done by having the information incomplete by which action must be guided, and from which conclusions will be drawn by cooperators, individually or collectively, by the bureau, by business men generally, and by public men who give purpose and direction to governmental policies. Government without a correct knowledge of facts is government by superstition, prejudice, and ignorance. Knowledge of the truth is a sure foundation for just judgment. Sec. 14. Annual organization fee. — Cooperators can well afford to pay any annual fee necessary for the effective support of a bureau created and administered for the specific purpose of aiding them in their work of profit making. The annual fee provided is one- thirtieth of 1 per cent on the aggregate annual net income earned by the aggregate capital employed. No annual fee to be less than $5. Sec. 15. Cooperative association fund. — The fees provided in sections "12 and 14 are intended to provide sufficient revenue for the support of the bureau independent of other appropriations by Congress. Necessarily, during the formative period of two or three years which will be required to bring the provisions of this act into full operation through a nation-wide organization of cooperative associations, the income from the fees paid by such associations will not be sufficient to cover the necessary expenses of the bureau. It is therefore pro- vided that any excess of expenses over the income from fees paid by cooperative associations shall be paid out of funds provided by appro- priations made by Congress. ANNUAL STATEMENT AND TECHNICAL RULES. Sec. 16. One condition of membership. — Uniform systems of account, ing and computations are fundamentally necessary for a correct com- parison of results and intelligent direction of business operations. For this reason it is necessary that each cooperator shall agree that he will have his accounts audited annually and furnish an annual statement, in form and containing the information prescribed by the commissioner, verified by an official auditor; that he will observe the by-laws of the association and the rules prescribed by the com- missioner. A correct statement of business results is necessary to an intelligent estimate of the efficiency of business methods. Sec. 17. Commission on technical rules for "cost" and general accounting; determining "average cost"; "economic" and "net" profit; form and contents of annual statement; regulating publicity and specify- ing qualifications of official auditors. — The technical rules provided for in this section are the "pillars of the temple" of prosperity for every individual; for every association of individuals; for every farming district; for every local community; for every State, and for the Nation. No more important work of fundamental and paramount value can ever be done by any man or set of men than will have been done by the proposed commission on technical rules when it has suc- cessfully formulated the rules specified and such standards and recom- mendations as may be germane to the purposes to be accomplished. Sec. 18. Members of the commission on technical rules. — The mem- bers of this important commission are to be appointed by the com- missioner of the Department of Commerce and Labor, on the recom- mendation of associations and organizations scientifically and prac- tically qualified to select men of high scientific and business experience as their representatives in its membership. A commission so appointed will be uninfluenced by class or selfish interests of any kind; it will be untouched by partisan political influence; it will command the respect and confidence of the entire citizenship of the country and the statesmen of the world. The rules it formulates will be as stable and as serviceable as the rules of mathematical computations. The list of associations named in this section on whose recommenda- tion the Secretary is to make appointments should be considered as suggestive, not exhaustive. Desirable changes in the list will undoubtedly be made when this bill is revised m the light of intelli- gent discussion. Sec. 19. Convening of the commission on technical rules. — It is pro- vided that this commission shall convene, within 60 days after 10 notices of acceptance of service have been received, under the aus-. pices of the Bureau of Commerce and that it shall be governed by rules formulated by the commissioner of the bureau approved by the Secretary of the Department of Commerce and Labor. Sec. 20. Approval of the rules, standards, forms, and instructions formulated and adopted by the commission on technical rules. — It is provided that the rules, standards, forms, and instructions formulated and adopted by the commission on technical rules shall be approved and adopted by the Secretary of the Department of Commerce and Labor and that they shall be supplied to all cooperative associations by the Bureau of Commerce for the use of their members, and that the Secretary shall report the proceedings of the commission to Con- gress within three months after its work is finished. Sec. 21. Compensation of members and provision for the expenses of the commission. — It is provided that the compensation and the allow- ance for the expenses of the members of the commission, and for the expenses of the commission, shall be fixed by the commissioner of the bureau and approved by the Secretary of the department, and paid as other expenses of the bureau are paid. Sec. 22. Responsibility of official auditors. — It is provided that any official auditor proven to be guilty of verifying a statement or report containing false or incorrect items shall be punished by a fine of not less than $100 and the revocation of his commission authorizing him to serve as an official auditor. Sec. 23. Annual statements, where filed. — It is provided that one copy of every annual statement of each cooperator shall be filed by the secretary of the association with the State in which the principal office of the cooperator is located, one with the Bureau of Commerce, and one copy shall be kept in the files of the association. The Commissioner of the Bureau of Commerce shall furnish a copy to any department of the Federal Government and to the governor of any State on request. Sec. 24. Information for regulation and taxation. — It is provided that all information required by State governments and by the Fed- eral Government for the regulation and taxation of the property and business of a cooperator may be derived from his annual statements, and that his accounts and business shall not be investigated by State or Federal officials unless complaint is made that the statements are incorrect or fraudulent or the purpose is to prove a violation of a State or of a Federal law. commissioner's and deputy commissioners' terms of service and compensations. Sec. 25. Commissioner — Term of service and compensation. — Term of service, nine years. Compensation, $10,000 annually. _ Sec. 26. Deputy Commissioners — Term of service and compensa- tion. — Term of service, nine years. Compensation, $5,000 annually. Sec. 27. Appointment ana compensation of bureau and district employees — Expenses. — It is provided that all bureau and district employees, then' compensations, and all bureau and district expenses shall be recommended bv the commissioner and approved by the Secretary, subject to civil-service regulations, and shall be paid and accounted for as other department expenses. 11 ORDER FOR INVESTIGATION. Note.— -Section 28 and all subsequent sections are applicable to all persons, firms, partnerships, corporations, and associations regardless of membership in cooperative associations. These sections incorporate the provisions of the Canadian combines investigation act of May 4, 1910, with only such changes as are deemed desirable or necessary to adapt them to the requirements of conditions in the United States. Sec. 28. How an order for an investigation may originate. — It is provided that 10 or more persons may join in an application to the commissioner for an order of investigation when they are of the opin- ion that any business method, by whomever followed, is in violation of the law to the detriment of any producer or consumer. Sec. 29. Order for an original investigation by a deputy commis- sioner. — This section provides that the commissioner, within 30 days after receipt of an application for an order for an investigation, shall order the deputy commissioner for the district in which the Eerson or persons complained against have their principal office to old a hearing on such complaint after due notice to all parties in interest. Sec. 30. Action of deputy commissioner on order for original investi- gation. — The purpose of an original investigation by a deputy com- missioner is to ascertain whether or not, in his judgment, there is reasonable ground for ordering an investigation by a board of inves- tigation, and, if so, whether or not the defendants after hearing the complaint will voluntarily enter into an agreement to make such changes in their business method as may be deemed necessary by the deputy commissioner to cause it to conform with the requirements of the law. This gives opportunity to the plaintiffs and defendants to arrive at a mutual understanding and settle the whole matter, as a business proposition, without the intervention of lawyers, courts, or juries. Sec. 31. Powers of deputy commissioner when holding hearings — This section endows a deputy commissioner, when holding hearings on an order for an original investigation, with the powers vested m the United States district court to summon witnesses, require them to give evidence, produce books, documents, etc. It also gives juris- diction to United States district judges to enforce the orders of the deputy commissioner. Sec. 32. Action and report of deputy commissioner on an order for an original investigation. — This section requires a deputy commis- sioner to approve or disapprove the application for an order for an investigation. In either case he is required to makehis recommenda- tions and transmit to the commissioner a full report of his proceedings and a certified copy of the evidence taken by him. Sec. 33. Action of commissioner on deputy commissioner's report. — It is provided that the commissioner shall approve or disapprove the recommendations made by a deputy commissioner in his report on an order for an original investigation, and give due notice of his decision to all parties in interest. In case the plaintiffs are not satis- fied with the decision of the commissioner, they are given permission to bring an action to obtain an order for an investigation, at their own expense, in a United States court, and the judge of such court is given jurisdiction of the case. Sec. 34. Investigation ordered by commissioner. — In case the com- missioner decides that an investigation is justified, it is provided that 12 he shall order an investigation and shall notify the deputy commis- sioner, plaintiffs, and defendants to this effect. Sec. 35. Creation of a hoard of investigation by the commissioner. — It is provided that whenever the commissioner orders an investiga- tion he shall organize a board of investigation, to hear the complaint, consisting of three members to be appointed by the commissioner, one on the recommendation of the plaintiffs, one on the recommenda- tion of the defendants, and one on the recommendation of the two persons so recommended and appointed. The third member is to act as chairman. In case appointments are not made as provided within 30 days after request, the commissioner shall appoint the num- ber of persons necessary to complete the board, vacancies in the board are to be filled in the same manner as original appointments. Sec. 36. Qualifications to serve as a member of a board of investiga- tion. — This section provides that no person shall serve as a member of a board of investigation who has any pecuniary interest in the subject of investigation or who is not a citizen of the United States. Sec. 37. Notice of appointment — Date when investigation shall com- mence. — It is provided that the commissioner shall immediately certify the names of the members of the board of investigation to the plaintiffs, the defendants, and the deputy commissioner for the district in which the investigation is to be made, and give notice to each of the date set for the commencement of the investigation. Sec. 38. Oath of office. — It is provided that a deputy commissioner shall administer the prescribed oath of "05106 to each member of a board of investigation before he shall enter upon the duties of his office. Sec. 39. Stenographers, clerics, experts, and expenses of an investi- gation. — It is provided that the deputy commissioner for the district shall provide the board of investigation with all needed stenographers, clerks, experts, and pay all reasonable and proper expenses necessary for the efficient carrying out of the provisions of this act. INVESTIGATION AND KEPOKT. Sec. 40. Investigation — Report and recommendations. — This section provides that the board of investigation shall inquire into all matters affecting the merits of the complaint, including the question of whether or not the business method complained against is in violation of a State or Federal law, and if so, whether the law itself is in violation of the requirements of moral and economic justice, or fair business procedure, and shall make a full and detailed report thereon to the commissioner, including such findings and recommendations as, in the opinion of the board, are in accordance with the merits and requirements of the case. .All questions as to the scope of the inves- tigation are to be decided as required to make it as thorough and complete as the public interest demands. Sec. 41. Recommendations of a board of investigation shall be final for bureau — Appeal may be made to United States district court. — It is provided that the recommendations of a board of investigation shall be the final action taken by the bureau upon an application for an order for an investigation. In case the plaintiffs or the defendants are dissatisfied with the recommendations of the board either of them may bring an action 13 at their own expense, in the United States district court for a trial of the complaint on its merits This court is given full jurisdiction of all the matters involved and of all action necessary to enforce its decision and the recommendations of the board of investigation. The decision of the court is final. _ Sec. 42. Report of board of investigation transmitted to commis- sioner — Minority report. — The report of a board of investigation must be in writing and must be signed by at least two members. It shall be transmitted by the chairman to the commissioner together with the evidence and documents. A minority report may be made and transmitted to the commissioner by a dissenting member of the board. Sec. 43. Publication and distribution of reports of boards of investi- gation — Certified copies. — It is provided that the commissioner, upon the receipt of a report of a board of investigation, and of the minority report, if any, shall send a copy, free of charge, to the parties in interest, to any newspaper that has applied for the same, and shall publish the report, and minority report, without delay, in the next bulletin issued by the bureau. He may also distribute copies in such manner as he may deem desirable, as a means of securing a com- pliance with the recommendations of the board of investigation. Certified copies shall be supplied upon payment of the fee prescribed by the commissioner. Sec. 44. Defendants guilty of an indictable offense — Penalty — May cease to offend. — It is provided that defendants found guilty of unlawful or unfair business methods shall be declared guilty of an indictable offense and shall be liable to a penalty of not exceeding 11,000 and costs for each day during which such person continues to offend, after 10 days, or such further extension of time from the date of the publication of the report in the bureau bulletin as may be recommended by the board of investigation. hearings of boards of investigation. Sec. 45. — Hearings of boards of investigation — When and where held. — Hearings of boards of investigation are to be held at such time and place as may be determined by the chairman of the board, pro- vided that so far as practicable they shall be held in the locality within which the subject matter arose. Notice of time and place is to be given to all parties in interest. Sec. 46. Proceedings of boards of investigation public. — The pro- ceedings of boards of investigation are to be conducted in public, but a board may order that any portion of its proceedings shall be con- ducted in private. Sec. 47. Decision by two members. — It is provided that the decision of any two members of a board of investigation shall be the decision of the board. Sec. 48. Quorum of a board of investigation. — The presence of the chairman and of one other member shall constitute a quorum of a board of investigation. Sec. 49. Absence of a member. — In the case of the absence of any one member the other two members shall not proceed unless it is shown that the absent member had been notified. 14 Sec. 50. — Appearance of parties. — It is provided that any party to an investigation may appear before a board of investigation in person or may be represented by any other person or persons, or, with the consent of the board, may be represented by counsel. Sec. 51. When counsel may be appointed by the Attorney General. — Whenever in the opinion of the commissioner the public interest so requires he may apply to the Attorney General of the United States to instruct counsel to conduct an investigation before a board of inves- tigation. The fees' and expenses allowed to such counsel by the Attorney General shall be paid out of appropriations made by Con- gress. Sec. 52.' Contempt of a board of investigation — Penalty. — Persons guilty of contempt may be taken into custody and, upon conviction, required to pay a penalty not exceeding one hundred dollars. POWERS OF A BOARD OF INVESTIGATION WITNESSES AND EVIDENCE. Sec. 53. Powers of a board of investigation — Witnesses and evidence. — For the purpose of an investigation a board of investigation is given all the powers vested in a United States district court in all matters relating to witnesses and the securing of evidence. Sec. 54. Oath administered by member of board. — It is provided that any member of a board of investigation may administer an oath. Sec. 55. Signature of chairman to summons and orders. — Summons and orders are to be signed by the chairman of a board of investiga- tion. Sec. 56. Inspection of boolcs and documents. — All books, papers, and documents produced before a board of investigation may be inspected by any member of the board and by such other parties as the board may designate. Sec. 57. Parties as witnesses. — Any party to proceedings before a board of investigation shall be competent and may be compelled to give evidence as a witness. Sec. 58. Expenses of witnesses. — Every person summoned who duly attends the hearings of a board of investigation as a witness shall be entitled to an allowance and traveling expenses according to the scale in force in the United States district court of the district in which the hearings are held. Sec. 59. Failure of witnesses to attend or to produce documents — Penalty. — Failure of a witness to attend a hearing of a board of in- vestigation or to produce books, papers, etc., required, is punishable by a fine of not exceeding $100. Sec. 60. Employment of experts. — A board of investigation, with the consent of the commissioner, is given authority to employ experts to make technical investigations. The information obtained is not to be made public except in so far as the board may deem expedient. » REMUNERATION AND EXPENSES OF BOARDS OF INVESTIGATION. Sec. 61. Remuneration of boards of investigation. — Compensation of members of boards of investigation is fixed as follows: (a) The two members first appointed, 15 per day, for not exceeding three days, while engaged in selecting the third member of the board. (b) Twenty dollars per day for each day's hearing. 15 Sec. 6'2. Traveling expenses. — Each member of a board of investiga- tion is to receive actual and necessary traveling expenses and $10 per day for time employed in going to or returning from a hearing. Sec. 63. Acceptance of a gratuity prohibited — Penalty. — Any mem- ber of a board of investigation found guilty of accepting any fee or gratuity of any kind from any person in any way interested in any proceedings before the board is subject to a fine of not exceeding $1,000 and thereafter is disqualified to serve as a member of any board. Sec. 64. Vouchers for expenses — Detailed statement of hearings. — All expenses of a board of investigation are to be allowed and paid on itemized vouchers certified by the chairman and forwarded to the commissioner. The chairman is also required to forward to the com- missioner a detailed statement of the hearings of the board and of the members present at each hearing. MISCELLANEOUS PROVISIONS. Sec 65. Technical irregularities. — No proceedings under this act shall be deemed invalid by reason of any defect of form or any tech- nical irregularity. Sec 66. Report as evidence. — Evidence of a report of a board of investigation may be given in any court by producing a copy of a bureau bulletin containing the report, or a copy of the report certified by the commissioner. Sec. 67. Allowances determined by the commissioner. — The commis- sioner shall determine the allowances to be paid to all persons, other than members of a board of investigation, employed by the Govern- ment or any board under the provisions of this act. Sec. 68. Annual report to Congress. — The commissioner is required to transmit to Congress, on or before the 26th day of January in each year, an annual report of the proceedings of. the Bureau of Commerce under the provisions of this act. Sec. 69. Act not to repeal, annul, or in any way affect the act of July 2, 1890. — It is provided that this act shah not be construed to repeal, annul, or in any way affect the antitrust act of July 2, 1890. CONCLUSIONS. Under this act every complaint against a business method must be made for business reasons. Every complaint must be heard by a board of business men appointed for the special purpose of investigating the one case sub- mitted to them. Their recommendations are final so far as the action of the Bureau of Commerce is concerned. Either party who is dissatisfied with the recommendations of the board may bring an action in the United States district court to have the complaint tried on its merits. No inducement it is possible for the Government to offer is sufficient to secure the services of business men, possessing unusual ability and large experience, as members of permanent commissions or boards when the service requires them to abandon their business and to devote all of their time to official duties. It is believed that such men will willingly accept service as mem- bers of a special board of investigation when the service will not 16 require them to abandon their business and may require only a few days or months at most. Every business man, however engaged, has a direct and vital inter- est in securing business men to adjust complaints against business methods, made by business men, in the interests of business stability and prosperity, thus keeping the entire task of business regulation out of politics and out of courts. This act places the far-reaching power and the exhaustless resources of the United States at the command of any 10 persons, no matter what or how small their business interests may be, to secure a just judgment, without expense to themselves, on any cause of complaint they may feel justified in bringing against the business methods of any person, firm, partnership, eorporafefori, or association doing business m the United States. Every possible cause of complaint is covered by this act. Every possible obstacle to the securing of a prompt, intelligent, thorough, and fair investigation of and a just judgment on the merits of any complaint is effectually removed. Technicalities which make "the law's delay" the most effective means of defeating justice have no place in proceedings prescribed for a board of investigation composed of business men anxious to perform the public duties assigned to them and then to return to their business and occupations. This act gives every person against whose business methods a com- Elaint has been made, by whomever made, an opportunity to have is case investigated by a board of his peers, composed of men who have practical experience in and knowledge of the conditions and requirements under which business must be operated if it is to be Erofitable; men who are competent to show him how he can change is methods to cause them to comply with the requirements of law; men whose' interests are as great as his own in determining whether or not his business method is right and the law wrong; men who have no purpose to serve except to aid, to the full extent of their opportu- nity and power, in purging business of every unfair and dishonest practice. It will be the purpose of such a board to seek ways for making changes in business methods, when deemed necessary, by the natural processes of evolution, enabling the new and better way to displace the old and inefficient or unfair way without injury or loss to anyone, and to administer punishment only for failure or refusal to comply with its recommendations. The supreme care of such a board will be to effectually safeguard the stability and profitableness of business for men possessing small capital obtaining average results, knowing full well that the billions of the many far exceed the millions of the few, and that business con- ditions best calculated to enable the weakest worker to win prosperity by an intelligent and diligent use of resources that are his own will give the lifeblood of prosperity to every worker, small and great. FUNDAMENTAL PURPOSES. The fundamental purposes of this act are: First. To establish a system of cooperative organization by means of which all persons, however employed or engaged in business, can 17 cooperate in every helpful way, for every helpful purpose, thus giving a new manifestation, meaning, and value to "good will." Second. To establish a system for the regulation of business under which investigations of business methods will be initiated only by business men who believe themselves injured by the business method against which they complain. Third. To make it the purpose of every business investigation to build up and develop, never to destroy business, by improving busi- ness methods for the benefit of all who are similarly situated. Fourth. To make the regulation of business the business of busi- ness men, not the business of politicians, public officials, lawyers, or courts. Fifth. To aid Government in intelligently promoting the develop- ment of agriculture and commerce by supplying accurate informa- tion that will correctly foster and safeguard every efficient business method. Sixth. To make Government a true friend and helper of every person who seeks prosperity for himself, through industry and enter- prise, by methods that are fair and honest, thus founding the stability and prosperity of the Nation upon the stability of business and the prosperitj" of each of its citizens. Draft of Bill. A BILL To promote agriculture and commerce by providing for the organization and regulation of cooperative associations and the creation of a Bureau of Commerce . Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the provisions of this act shall apply to all persons, firms, partnerships, corporations, and associations independently engaged in the business of growing, manu- facturing, or otherwise producing, buying, selling, storing or trans- porting one or more articles of commerce. Sec. 2. Definitions.— In this act, unless the context otherwise requires, words and phrases shall be construed to have the following meanings : (a) Cooperative associations: An association organized in con- formity with the provisions of this act. (&) Application: An application to the Commissioner of the Bureau of Commerce for a certificate of organization for a cooperative associa- tion made in the form and containing the information prescribed by the commissioner. (c) Certificate: A certificate of organization issued by the Com- missioner of the Bureau of Commerce to a cooperative association. (d) Order: An order for investigation issued by the Commissioner of the Bureau of Commerce to a deputy commissioner or to a board of investigation. (e) Persons: Any person, firm, partnership, corporation, or associa- tion independently engaged in the business of growing, manufactur- ing, or otherwise producing, buying, selling, storing, or transporting one or more articles of commerce. (/) Operator: Any person, firm, partnership, corporation, or associa- tion independently owning, controlling, or managing a business the 45695—12 2 18 purpose of which is to grow, manufacture, or otherwise produce, buy, sell, store, or transport one or more articles of commerce. (g) Cooperator: Any person, firm, partnership, corporation, or association owning, controlling, or managing a business the purpose of which is to grow, manufacture, or otherwise produce, buy, sell, store, or transport one or more articles of commerce, who has become a member of a cooperative association organized under the provisions of this act. Qi) Statement: A statement of affairs made in form, containing information audited and verified as provided in this act. (i) Economic profit: A net profit, not exceeding six per centum on the total capital employed in a business, shown as the result of one year's business by a statement of affairs made in conformity with the provisions of this act. (j) Capital : The total amount of capital invested or used in a busi- ness, whether owned or borrowed. (k) Capital owned: Money, property, services, or other things of value invested in a business by the person, members of a firm or part- nership, or the stockholders in a corporation or association. (I) Capital borrowed: All interests bearing debts of a business, secured or unsecured. (m) Secretary: The Secretary of the Department of Commerce and Labor. (n) Department: The Department of Commerce and Labor. (o) Commissioner: The Commissioner of the Bureau of Commerce. (p) Deputy commissioner: A deputy commissioner of the Bureau of Commerce. (q) Bureau : The Bureau of Commerce in the Department of Com- merce and Labor created by the provisions of this act to secure its effective administration. (r) Board : A board of investigation appointed and serving as pro- vided in this act. (s) Judge: A justice of a United States district court. (t) Prescribed: Prescribed by this act or any rule or regulation made thereunder. Sec. 3. Who may organize local, district, and national cooperative associations. — Three or more persons, firms, partnerships, corpora- tions, or associations independently engaged in the business of grow- ing, manufacturing, or otherwise producing, buying, selling, storing, or transporting one or more articles of commerce may organize, under authority of this act, a local, district, or national cooperative asso- ciation in any State, the District of Columbia, Territory, or depend- ency of the United States. Sec. 4. Purposes for which cooperative associations may be organ- ized: First. To promote profit making by establishing business methods and practices correctly conforming with the requirements of moral and economic justice. Second. To stimulate the activity, sustain and develop the growth of the business of those having small capital by safeguarding their profits as a means of preventing a partial or complete monopolization of those having small capital by those having or controlling large capital. 19 Third. To eliminate profit-destroying competition resulting from misinformation or misrepresentation or malicious intent to destroy or absorb a competitor. Fourth. To adopt and use an identical system of cost accounting that will correctly determine the value of standards of efficiency and supply a reliable basis for minimum prices and service charges designed to enable each cooperator who can produce at an average cost to earn an economic profit. Fifth. To enable cooperators owning small capital to acquire capital necessary for a growing business by means of profits earned from prices and charges based on average cost plus an economic profit. Sixth. To prevent the sacrifice of quality for cheapness by main- taining a rate of profit that will induce producers to strive for quality as well as cheapness. Seventh. To prevent price cutting made possible only by mis- representing quantity, quality, ingredients or material, by under- estimating cost, or by malicious selling below an average cost with the intent to destroy or absorb a competitor. Eighth. To safeguard profits by establishing uniform practices in making allowances for cash settlements; for prompt or time deliver- ies; for packing, packages, and casings; for storage, transportation, and other business expenses. Ninth. To stimulate and facilitate the production and sale of articles of commerce by supplying cooperators with prompt and accurate information regarding costs and methods of production and marketing, preserving, packing, shipping, market conditions and prices, and credit ratings of buyers. Tenth. To maintain and stimulate the growth of the business of cooperators owning small capital by giving stability to their prices and credits; by enabling them to establish cooperative buying and selling agencies; by aggregating in large quantities their purchases of materials and sales of products for shipment and distribution; by maintaining purchasing and selling agencies that will distribute products from producers to final consumers at the smallest possible cost for intervening expenses and give a guarantee of delivery, quantity and quality as represented. Eleventh. To increase the efficiency of productive labor by encouraging the training of the young to fit them for different trades and employments; by establishing minimum rates of wages and reasonable working hours; recognizing degrees in efficiency by com- pensating labor according to its value; by improving working con- ditions, making reasonable allowances for unavoidable loss of time and giving reasonable compensation for overtime; by providing for injuries, sickness and old age, rewarding long-continued service; utilizing the factor of self-interest by a fair system of profit sharing, and by securing protection in all of these particulars, for employer and employee alike, from the grasping greed of unscrupulous com- petitors who seek profits by compelling their employees to work under unsafe and insanitary conditions for un-American wages. Twelfth. To enable traffic managers to cooperate with each other, and with shippers and receivers of freight, to secure the effective handling of equipment through providing rules for the prompt fur- nishing, loading, and unloading of cars and the transfer of engines 20 and cars from roads and markets where they are not needed to roads and markets where they are needed; to adjust classifications and rates in conformity with the requirements of the volume of business, operating expenses, and a dependable profit from operation; to induce foreign orders for United States products by offering advan- tages in transportation whenever this can be done with mutual advantage for the shipper and the transportation company; to elimi- nate all discounts, discriminations, rebates, and special privileges of every kind. Thirteenth. To obtain association funds to be used for the mutual benefits of all cooperators -through the collection of membership dues and charges for services rendered or expenses incurred. Fourteenth. To hold meetings for the cultivation of good will, the discussion of subjects of common interest and to discover ways and means for increasing efficiency and to give stability to business. Fifteenth. To make it certain that business methods shall be adopted and followed in accordance with the requirements of moral and economic laws and the provisions of statutory laws. Sec. 5. Cooperative associations may be divided into classes desig- nated as local, district, or national, and also by the character of the business they operate or the services they render. ADMINISTRATION. Sec. 6. Creation of a Bureau of Commerce. — The Bureau of Corpora- tions in the Department of Commerce and Labor, without other change, is hereby designated the "Bureau of Commerce" and is charged with the duty of administering the provisions of this act. The commissioner of the bureau shall hereafter be known as the Commissioner of Commerce. He shall be appointed by the President, by and with the advice and consent of the Senate, on the recommen- dation of the Secretary. Sec. 7. Deputy Commissioner of Commerce. — The President, by and with the advice and consent of the Senate, shall appoint one Deputy Commissioner of Commerce for each United States judicial district, on the recommendation of the commissioner approved by the Secretary. Sec. 8. Rules and regulations. — The commissioner may make such rules and regulations, not inconsistent with this act, as to him seem necessary for carrying out its provisions and for the efficient admin- istration thereof, subject to the approval of the Secretary. Such rules and regulations shall be published in an official bulletin of the bureau and upon being so published they shall have the same force as if they formed a part of this act. Such rules and regulations shall be transmitted to Congress within fifteen days after publication, if Congress shall then be in session, and if not in session, within fifteen days after the commencement of the next session thereof. Sec. 9. Rules for the organization of cooperative associations. — The commissioner shall prescribe rules for the organization and regulation of cooperative associations which shall be uniform for all associations of the same class. Sec. 10. By-laws.— Subject to approval by the commissioner coop- erative associations may adopt by-laws for their own government not inconsistent with the deolared purpose of the association nor in con fiict with State and Federal statutory laws or the rules and reo-ula 21 tions prescribed by the commissioner and approved by the Secretary. By-laws adopted by an association shall not be changed, except by action of the members of the association as provided. Sec. 11. Application for certificate of organization. — Persons desir- ing to organize a cooperative association shall make application to the bureau for a certificate of organization, signed by the number of persons required. This application shall be in the form and shall contain the information prescribed by the commissioner. If the application is in proper form and is accompanied with the required recording fee, the commissioner shall issue a certificate of organiza- tion in conformity therewith. Sec. 12. Recording fee. — A recording fee equal to one six-hundredth of one per cent on the aggregate capital employed in business by all persons who have qualified as members shall be paid by each associa- tion when it files its application for a certificate of organization, but no fee shall be less than five dollars. Sec. 13. Annual and special reports. — Every association, within thirty days after the close of its fiscal year, shall make an annual report to the bureau in such form and containing such information as the commissioner may prescribe. Every association shall make a special report to the bureau in such form and containing such information as the commissioner may request within thirty days after the date of a request, or such longer period as the commissioner may prescribe. Failure to file an annual or a special report in the bureau within thirty days after the date required for such filing shall be punished by requiring the payment of a fine equal to twenty per cent of the amount of the recording' fee, or of the last annual fee, or by a revoca- tion of the certificate of organization. Sec. 14. Annual organization fee. — Every association shall pay an annual organization fee, to be paid when it files its annual report, equal to one-thirtieth of one per cent on the aggregate annual net income earned by the aggregate capital employed by all persons in the business on account of which they have qualified as members, but no annual fee shall be less than five dollars. Failure to pay the annual organization fee as required shall be punished by requiring the payment of a fine equal to twenty per cent of the annual organization fee, or by a revocation of the certificate of organization. Sec. 15. Cooperative association fund. — All fees and fines collected by the bureau from cooperative associations shall be placed in a "cooperative association fund." This fund shall be used for the payment of all expenses of every sort and kind incurred by the bureau on account of the administration of this act, and for no other purpose. Expenses, in excess of this fund, incurred by the bureau on account of this act, shall be paid out of funds appropriated by Congress for the maintenance of the department as other department expenses are paid. ANNUAL STATEMENT. Sec. 16. One condition of membership.— -One condition of member- ship shall be an agreement, in form prescribed by the commissioner, signed by the person making application for membership, stating that he will have his accounts audited annually by an official auditor 22 commissioned to serve as such by some one of the several States, or by the Federal Government that he will file with the association tripli- cate copies of an annual statement, in form and containing the infor- mation prescribed by the commissioner, verified by an official auditor; that he will observe the by-laws of the association and the rules pre- scribed by the commissioner. Sec. 17. Commission on technical rules for cost and general account- ing; determining ''average cost"; "economic" and "net" profit; form and contents of annual statement; regulating publicity and speci- fying qualifications of official auditors. — Within sixty days after this act is made law the Secretary of Commerce and Labor shall appoint a special commission on technical rules, whose duty it shall be to formulate rules to be used by all cooperators for the following purposes : First. For "cost" and general accounting. Second. For determining the "average cost" of production of articles of commerce. Third. For determining a necessary margin for "economic profit" to be added to the "average cost" of production to fix a reasonable selling price for articles of commerce. Fourth. For determining the deductions from gross annual income to show the "net" annual profit of a business. Fifth. For determining the form and contents of an annual state- ment designed to show, with other items, total "capital" invested, subdivided into "capital owned" and "capital borrowed," on which interest and profits are computed; total liabilities; total gross income; total deductions from total gross income; net profit, and such other items as may be deemed necessary. Sixth. For regulating what items, or aggregate of items, may be made public, and what items shall be safeguarded as confidential. Seventh. For specifying the qualifications to be complied with by applicants for a commission authorizing the applicant to serve as an "official auditor." Sec. 18. Members of the commission on technical rules. — The secre- tary shall appoint three persons recommended by each of the follow- ing organizations to serve as members of the commission on technical rules, representing the organization by which they are recommended : American Economic Association, American Bankers' Association, American Association of Certified Accountants, Association of Kail- road Auditors, American Street Railroad Association, National Electric Light Association, National Manufacturers' Association, National Grange of the Patrons of Husbandry, National Tax Associa- tion, National Association of State Railroad Commissioners, Chamber of Commerce of the United States of America, Southern Commercial Congress, Interstate Commerce Commission, Bureau of Commerce. Sec/ 19. Convening of the commission on technical rules. — Within sixty days after notices of acceptance of service have been received, the commission on technical rules shall convene under the auspices of the Bureau of Commerce. It shall be governed by rules formulated by the commissioner of the bureau and approved by the Secretary of the Department of Commerce and Labor. Sec. 20. Approval of the rules, standards, forms, and instructions formulated and adopted by the commission on technical rules. — The rules, standards, forms, and instructions formulated and adopted 23 by the commission on technical rules shall be approved and adopted by the Secretary of the Department of Commerce and Labor and supplied to all cooperative associations by the Bureau of Commerce for the use of their members. The secretary shall report the pro- ceedings of this commission to Congress within three months after its work is finished. Sec. 21. Compensation of members and provision for the expenses of the commission. — The compensation and allowance for the expense of the members of the commission on technical rules and for the expenses of the commission shall be fixed by the commissioner, subject to the approval of the Secretary, and shall be paid as other expenses of the bureau are paid. Sec. 22. Responsibility of official auditors. — Any official auditor em- ployed by a cooperator to audit his accounts and prepare his annual statement or other reports proven to be guilty of verifying a state- ment or a report containing false or incorrect items shall be punished by being required to pay a fine of not less than one hundred dollars and the revocation of his commission to serve as an "official auditor." Jurisdiction of proceedings for the enforcement of this punishment is given to the supreme court of the State, or the United States district court for the district in which the offense was committed by whichever authority the commission held by the offending auditor may have been issued. Sec. 23. Annual statements, where filed. — One copy of every annual statement of each cooperator, verified by an official auditor, shall be filed by the Secretary of each cooperative association with the proper officer of the government of the State in which the piincipal office of the cooperator is located, one with the Federal Bureau of Commerce, and one copy shall be kept in the files of the association. The commissioner shall furnish a certified copy of such statements to any department of the Federal Government, and to the governor of any State on receipt of an application for the same. Sec. 24. The information in the annual statements filed by a co- operator shall be prima facie evidence for State governments and for the Federal Government in the regulation and taxation of the busi- ness and property of the cooperator. The accounts and business of a cooperator that have been audited, and a statement of the same filed as provided in this act, shall not be investigated by State or Federal officials unless complaint is made that the information in the annual statement is incorrect or fraudu- lent, or the purpose is to prove a violation of a State or of a Federal law. commissioner's and deputy commissioners' term of service and compensation. Sec. 25. Commissioner — Term of service and compensation. — The term of service for the commissioner shall be nine years. His com- pensation shall be ten thousand dollars per year, payable in equal monthly installments. Sec. 26. Deputy commissioners — Term of service and compensa- t i on _ — The term of service for a deputy commissioner shall be nine years. His compensation shall be five thousand dollars per year, payable in equal monthly installments. 24 Sec. 27. Appointment and compensation of bureau and district employees — Expenses. — The appointment of bureau and district chiefs, stenographers, investigators, experts, clerks, and other employees and their compensation and all expenses incurred by the bureau and deputy commissioners shall be recommended by the commissioner and approved by the Secretary, subject to civil-service regulations, and shall be paid and accounted for as other department expenses are paid and accounted for. OEDEE FOE INVESTIGATION. Sec. 28. How an order for an investigation may originate. — When ten or more persons, citizens of the United States, are of the opinion that any business method pursued by any person, firm, partnership, corporation, or association engaged in the business of growing, manu- facturing, or otherwise producing, transporting, distributing, pur- chasing, or selling any article of interstate commerce is in violation of any Federal law, to the detriment of consumers or producers, such persons may make application to the commissioner, in such form and containing such declarations as the commissioner may prescribe and require, for an order for an investigation. Sec. 29. Original investigation by deputy commissioner ordered. — Within thirty days after the commissioner has received an application for an order for an investigation he shall direct the deputy commis- sioner for the district in which the person or persons complained against have their principal office to hold a hearing on such complaint, after due notice to all parties in interest. Sec. 30. Action of deputy on order for original investigation. — If upon hearing the deputy commissioner is satisfied that there is a reasonable ground for believing that the business method complained against is in violation of law, and that it is in the public interest that an investi- gation should be made, and the person or persons complained against refuse to enter into an agreement to make such changes in their business method within sixty days as are necessary to cause them to conform with the requirements of the law, he shall so report to the commissioner. If the deputy is not satisfied with the evidence submitted he may adjourn the hearing from time to time until further evidence in support of the application is submitted or he may refuse to approve the order for an investigation. Sec. 31. Powers of deputy commissioner when holding hearings. — When holding hearings a deputy commissioner shall have all the powers vested in the United States district court to summon before him and enforce the attendance of witnesses, to administer oaths, and to require witnesses to give evidence on oath or affirmation and to produce such books, papers, and other documents or things as he may deem requisite. All United States district court judges are hereby given jurisdiction and required to enforce orders of deputy commissioners when neces- sary for proper proceedings in hearings conducted by them. Sec. 32. Action and report of deputy commissioner on order for an original investigation. — The action of a deputy commissioner after a hearing on an order for an original investigation shall be either an approval or a disapproval of the application for an order for an inves- 25 tigation. In either case he shall make his recommendation and trans- mit to the commissioner a full report of his proceedings and a certified copy of the evidence taken by him. m Sec. 33. Action of commissioner on deputy commissioner's report. — The commissioner shall approve or disapprove the recommendations of a deputy commissioner made in his report on an order for an orig- inal investigation and give due notice to all parties in interest. In case the commissioner decides that an investigation is not justified by the evidence submitted by the deputy, he shall so notify the plaintiffs and defendants. In case the plaintiffs are not satisfied with the deci- sion of the commissioner they may bring an action to obtain an order for an investigation, at their own expense, in the United States dis- trict court for the district in which the defendants have their principal office. The judge to such court shall have jurisdiction of all matters pertaining to such case. Sec. 34. Investigation ordered by commissioner. — In case the com- missioner decides that the evidence and recommendations reported to him by a deputy commissioner justify an investigation, he shall order an investigation and shall notify the plaintiffs and defendants to this effect. Sec. 35. Creation of a board of investigation by the commissioner. — Whenever the commissioner shall order an investigation to follow an original investigation by a deputy commissioner, he shall organize a board of investigation to hear the complaint consisting of three mem- bers to be appointed by the commissioner under the following con- ditions : First. He shall notify the plaintiffs and defendants each to recom- mend one person for appointment to serve as a member of a board of investigation to hear their case. Second. When the persons so recommended have accepted appoint- ment to serve as members of the board of investigation, the commis- sioner shall request them to recommend a person for appointment to serve as the third member of the board and to act as chairman of the board. Third. In case the plaintiffs, defendants, or members of the board appointed on their recommendation shall fail to recommend persons for appointment as requested by the commissioner within thirty days after date of such request, the commissioner shall appoint the num- ber of persons necessary to complete the membership of the board. Vacancies on the board shall be filled in the same manner as origi- nal appointments. Sec. 36. Qualifications to serve as a member of a board of investiga- tion. — Persons having any pecuniary interest in the subject of inves- tigation or who are not citizens of the United States shall not serve as members of a board of investigation. Sec. 37. Notice of appointment — Date when investigation shall com- mence —The commissioner shall immediately certify the names of the members of the board of investigation to the plaintiffs, the defend- ants, and the deputy commissioner for the district in which the inves- tigation is to be made and give notice to each of the date set for the commencement of the investigation. Sec 38. Oath of office.— Before entering upon their duties a deputy commissioner shall administer to each member of a board of inves- tigation the oath of office prescribed by the commissioner. 26 Seo. 39. Stenographers, clerks, experts, and expenses of an investiga- tion. — The deputy commissioner for the district shall provide the boajd of investigation with a stenographer and such clerical and expert assistance as may be deemed necessary for the efficient carry- ing out of the provisions of this act and shall pay all reasonable and proper expenses of the investigation, subject to the approval of the commissioner. INVESTIGATION AND REPORT. Sec. 40. Investigation — Report and recommendations. — The board of investigation shall fully and carefully inquire into the matters referred to it and all matters affecting the merits thereof, including the ques- tion of whether or not the business method complained against is in violation of State or Federal law, and, if so, whether the law itself is in violation of the requirements of moral and economic justice or fair business procedure, and shall make a full and detailed report thereon to the commissioner, which report shall set forth the various proceed- ings and steps taken by the board for the purpose of fully and care- fully ascertaming aU the facts and circumstances connected with the alleged unlawful business method, including such findings and recom- mendations as, in the opinion of the board, are in accordance with the merits and requirements of the case. In deciding any question that may affect the scope or extent of the investigation, the board shall consider what is required to make the investigation as thorough and complete as the public interest demands. Sec. 41. The recommendations of a board of investigation final as regards action by the Bureau of Commerce — Appeal may be made to United States district court. — The recommendations of a board of investigation shall be the final action taken by the Bureau of Com- merce upon an application for an order for an investigation. In case the plaintiffs or the defendants are dissatisfied with the recommendations of a board of investigation either of them may bring an action, at their own expense, in the United States district court for the district in which the principal office of the defendants is located for a trial of the complaint on its merits. Such court shall have full jurisdiction of all matters involved in the case and all actions necessary to enforce its decisions on the recommendations of a board of investigation. The decision of the court shall be final. Sec. 42. Report of board of investigation transmitted to commissioner — Minority report. — The reports of boards of investigation shall be in writing, and shall be signed by at least two members. They shall be transmitted by the chairman to the commissioner, together with the evidence taken at such investigation certified by the chairman, and any documents and papers remaining in the custody of the board. A minority report may be made and transmitted to the commis- sioner by any dissenting member of a board. Sec. 43. Publication and distribution of reports of boards of investi- gation— Certified copies. — Upon receipt of the report of a board of investigation and of the mmority report, if any, the commissioner shall send a copy thereof, free of charge, to the parties in interest, to any newspaper that has applied therefor, and shall publish the report and minority report, without delay, in the next bulletin issued by the bureau. He may distribute copies of the report and of any minority 27 report in such manner as to him seems most desirable as a means of securing a compliance with the board's recommendations. The commissioner shall, upon payment of such fees as may be pre- scribed, supply a certified copy of any report or minority report to any person applying for the same. Sec. 44. Defendants guilty of an indictable offense — Penalty — May cease to offend. — Any person reported by a board of investigation to have been guilty of unduly limiting the facilities for growing, manu- facturing, or otherwise producing, buying, selling, storing, dealing in, or transporting any article of commerce or of restraining or injur- ing trade or commerce in relation to any such article, or of unduly preventing, limiting, or lessening the growing, manufacture, or pro- duction otherwise of any such article or unreasonably enhancing the price thereof, or of unduly preventing or lessening competition in growing, manufacture, or production otherwise, or in the purchase, barter, sale, transportation, storage, or supply of any article of com- merce in violation of any provision of a State or a Federal law, and who thereafter continues so to offend, is guilty of an indictable offense and shall be liable to a penalty not exceeding one thousand dollars and costs for each day after the expiration of ten days, or such further extension of time as in the opinion of a board of inves- tigation may be necessary from the date of the publication of the report of the board in the bureau bulletin, during which such person so continues to offend. HEARINGS OF BOARDS OF INVESTIGATION. Sec. 45. Hearings of hoards of investigation — When and where held. — The hearings of. a board of investigation shall be held at such times and places as may be fixed by the chairman after consultation with other members of the board, and the persons in interest shall be notified by the chairman as to the times and places at which hear- ings are to be held: Provided, That, so far as practicable, the board shall hold its hearings in the locality within which the subject matter of the proceedings before it arose. Sec. 46. Proceedings of boards of investigation public. — The pro- ceedings of boards of investigation shall be conducted in public, but a board may order that any portion of its proceedings shall be con- ducted in private. Sec. 47. Decision by two members. — The decision of any two mem- bers present at a hearing of a board of investigation shall be the decision of the board. Sec. 48. v Quorum of a board of investigation. — The presence of the chairman and of one other member of a board of investigation shall be necessary to constitute a quorum of the board. Sec. 49. Absence of a member. — In the case of the absence of any one member from a hearing of a board of investigation, the other two members shall not proceed, unless it is shown that the absent member has been notified of the hearing in ample time to admit of his attend- ance. Sec 50. Appearance of partus. — Any party to an investigation may appear before a board of investigation in person or may be represented by any other person or persons, or, with the consent of the board, may be represented by counsel. 28 Sec. 51. When counsel may he appointed by the Attorney General. — Whenever, in the opinion of the commissioner, the public interest so requires, he may apply to the Attorney General of the United States to instruct counsel to conduct the investigation before a board of investigation, and upon such application the Attorney General may instruct counsel accordingly. The fees and expenses allowed to such counsel by the Attorney General shall be paid out of such appropriations as are made by the Congress to provide for the cost of administering this act. Sec. 52. Contempt of a hoard of investigation — Penalty. — If in any proceedings before a board of investigation any person willfully insults any member of the board, or willfully interrupts the proceed- ings, or without good cause refuses to give evidence, or is guilty in any other manner of any willful contempt in the presence of the board, any officer of the board or any constable may take the person offending into custody and remove him from the precincts of the board, to be detained in custody until the conclusion of that day's hearing of the board, and the person so offending shall be liable, upon summary conviction, to a penalty of not exceeding one hundred dollars. POWERS OF A BOARD OF INVESTIGATION — .WITNESSES AND EVIDENCE. Sec. 53. Powers of a board of investigation — Witnesses and evi- dence. — For the purposes of an investigation a board of investigation shall have all powers which are vested in a United States district court for the following purposes, namely: The summoning of wit- nesses before it and enforcing their attendance from any part of the United States, of administering oaths, and of requiring witnesses to give evidence on oath or solemn affirmation and to produce such books, papers, or documents, or things as the board deems requisite to the full investigation of the matters into which it is inquiring. Sec. 54. Oath administered by member of board. — Any member of a board of investigation may administer an oath. Sec. 55. Signature of chairman to summons and orders. — Summons to witnesses and all other orders, processes, and proceedings shall be signed by the chairman of a board of investigation. Sec. 56. Inspection of books and documents. — All books, papers, and other documents or things produced before a board of investigation, whether voluntarily or in pursuance of summons, may be inspected by any member of the board, and also by such parties as the board may designate. Sec. 57. Parties as witnesses. — Any party to proceedings before a board of investigation shall be competent and may be compelled to give evidence as a witness. Sec. 58. Expenses of witnesses. — Every person who is summoned and duly attends the hearings of a board of investigation as a witness shall be entitled to an allowance for attendance and traveling ex- penses according to the scale in force with respect to witnesses in the United States district court of the district in which the hearings are held. 8 Sec. 59. Failure of witnesses to attend or to produce documents — Penalty.— If any person who has been duly served with a summons 29 and to whom at the time of service payment or tender has been made of his reasonable traveling expenses according to the aforesaid scale, fails to attend a hearing of a board of investigation or to produce any- book, paper, or other document or thing required by his summons, he shall, unless he shows that there was good and sufficient cause for such failure, be guilty of an offense and liable upon summary con- viction to a penalty not exceeding one hundred dollars. Sec. 60. Employment of experts. — A board of investigation may, with the. consent of the commissioner, employ competent experts to examine books or official reports, and to advise it upon any technical or other matter material to the investigation, but the information obtained therefrom shall not, except in so far as the board deems it expedient, be made public, and such parts of the books, papers, or other documents as in the opinion of the board are not material to the investigation may be sealed. REMUNERATION AND EXPENSES OF BOARD. Sec. 61. Remuneration of hoards of investigation. — The members of a board of investigation shall be remunerated for their services as follows : (a) To the two members first appointed an allowance of five dol- lars each per day for a time not exceeding three days during which they may be actually engaged in selecting the third member of the board. (6) To each member an allowance at the rate of twenty dollars for each day's hearing of the board. Sec. 62. Traveling expenses. — Each member of a board of investi- gation shall be entitled to the actual and necessary traveling expenses and an allowance of ten dollars per day for each clay that he is engaged in traveling from or to his place of residence for the purpose of attend- ing or after having attended a hearing of the board. Sec. 63. Acceptance of a gratuity prohibited — Penalty. — No member of a board of investigation shall accept in addition to his traveling expenses and allowance as a member of the board any perquisite, fee, or gratuity of any kind from any person in any way interested in any matter or thing that is being investigated by the board. The acceptance of any such perquisite, gift, or gratuity by any member of the board shall render such member liable upon summary convic- tion to a fine not exceeding one thousand dollars, and he shall there- after be disqualified to act as a member of any board. Sec. 64. Vouchers for expenses — Detailed statement of hearings. — All expenses of a board of investigation, including expenses for transportation, incurred by the members thereof or by persons under its orders in making investigations under this act, salaries of employ- ees and agents, and fees and traveling expenses of witnesses, shall be allowed and paid upon the presentation of itemized vouchers therefor, approved and certified by the chairman of the board, which vouchers shall be forwarded by the chairman to the commissioner. The chairman shall also forward to the commissioner a certified and detailed statement of the hearings of the board and of the members present at each hearing. 30 MISCELLANEOUS PROVISIONS. Sec. 65. Technical irregularities. — No proceedings under this act shall be deemed invalid by reason of any defect of form or any technical irregularity. Sec. 66. Report as evidence. — Evidence of a report of a board of investigation may be given in any court by the production of a copy of an official bulletin published by the bureau purporting to contain a copy of such report or by the production of a copy of the report purporting to be certified by the co mm issioner to be a true copy. _ Sec. 67. Allowances determined by the commissioner. — The commis- sioner shall determine the allowances or amounts to be paid to all Eersons, other than the members of a board of investigation, employed y the Government or any board, including the secretaries, clerks, stenographers, or other persons performing any services under the provisions of this act. Sec. 68. Annual reports to Congress. — The commissioner shall trans- mit to Congress on or before the twenty-sixth day of January in each year an annual report of the proceedings of the Bureau of Commerce under the provisions of this act. Sec. 69. Act not to repeal, annul, or in any way affect the act of July 2, 1890. — This act shall not be construed to repeal, annul, or in any way affect the antitrust act of July second, eighteen hundred and ninety. o