The current brouhaha involving the Federal Trade Commission has roots that are as old as the agency.
In fact, when the first commissioners took their oaths of office 67 years ago this month, the hullabaloo over passage of legislation authorizing the FTC had not died down.
To be sure, the FTC was not the first arm of the government to keep track of business. In 1903, the Bureau of Corporations had been established to compile and publish data that would assist the attorney general in determining antitrust suits authorized by the Sherman Act of 1890.
Although such suits became more numerous after 1903, the courts were less inclined to render strict justice, adhering instead to a "rule of reason" in breaking up large firms.
Some reformers reacted by demanding passage of two laws, one that would delineate proscribed monopolistic activities, the other creating an agency that would maintain fair rules of competition among businesses engaged in interstate commerce.
By the time these demands were being debated, Woodrow Wilson had entered the White House after beating the third-party attempt of Theodore Roosevelt to win another term.
TR's campaign, however, was not without its effect on Wilson. Adopting a reform program identified as the New Nationalism, Roosevelt stressed that big government should rationalize big business.
Wilson, on the other hand, adhered to reformism (dubbed the New Freedom) that centered on small economic units as the preferable form of business organization.
By 1914, however, Wilson moved in the direction of blending the New Freedom and the New Nationalism: the Clayton Antitrust Act would outlaw certain activities, but it had an escape hatch. The activities had "to substantially lessen competition."
And the Federal Trade Commission Act had teeth--Section 5 empowering the commission to issue cease-and-desist orders--as well as the likelihood of bleeding gums in that weak commissioners could be appointed to go easy with business on the matter of fair practices.
This scenario occasioned cries of alarm, some reformers worrying about a weasel-like administration of the laws, some conservatives about massive interference with business prerogatives in practices such as advertising. Then there was the concern over shared jurisdiction, for both the Justice Department and the FTC could enforce the Clayton Act.
In the first years after 1914, the FTC reflected the ambiguous and discretionary nature of its mandate. Commissioners experienced high turnover and felt their administrative way cautiously, except for a brief period of boldness checked by criticism from Congress and the courts. In line with the pro-business sentiment of the 1920s, the appointees of Calvin Coolidge attempted to assist rather than "oppress" private enterprise. Although Franklin Roosevelt would make war on the matter of removing an FTC chairman in 1933, the action was largely symbolic, for the foundation stone of the early New Deal was self-regulation of business through the National Recovery Act.
As reformers gained influence after 1935 when the NRA was declared unconstitutional, the commission pursued a more activist course. Legislation in 1938 expanded FTC authority in trade practices, especially with regard to false advertising relating to drugs, food, and cosmetics, and provided for court-ordered civil penalties. With the emergence of consumerism after World War II, the commission began to pay heed and received additional authority from Congress. But by the end of the liberal decade of the 1960s, the FTC found its consumer record the object of sometimes strident attack, with one group referring to the agency as "the little old lady on Pennsylvania Avenue."
The Nixon administration moved to bolster the FTC's role, and Congress responded with legislation authorizing the issuance of industry-wide trade rules. By 1972 the commission was pursuing the avenue of "corrective" advertising and by decade's end had ordered Warner-Lambert Co., makers of Listerine, and American Home Products, manufacturers of Anacin, to spend millions of dollars for ads disclaiming prior contentions.
The FTC also moved to secure restitution for consumers, achieving a record of some $86 million in a nine-month period in 1980, a figure in excess of the agency's budget for the year.
Yet the commission came under attack--for concentrating on trivia (an FTC advisory panel in July 1979 issued a 1,000 page report on aspirin and nonaspirin products), for devising regulations that would add to consumer costs, and for entering new fields of business scrutiny in which lobbies made their impressions on Capitol Hill. In 1980, for example, the FTC was closed down for three days because Congress failed to fund it. What is more, Congress put curbs on the commission, including a limit to its legislative lease, due to expire in September.
In sum, the FTC is an institution at bay. But then, its critics and Congress are not without problems. As one legislator remarked a few years ago, it's one thing to clip the FTC's wings, but it's quite "difficult . . . to do (so) responsibly."