In tackling general trade restraints and discriminatory practices, we anticipate an increase in workload, but we are hopeful it can be handled by the staffs presently assigned to it. Such is not the case, however, in the manpower needed to effect compliance with restraint of trade orders, particularly those halting illegal mergers and requiring divestitures. Also to be processed are an increasing number of merger clearance under final orders requiring respondents to seek prior FTC approval before making an acquisition in any product line covered. For example: 15 orders now require divestitures within particular periods of time up to five years, while 52 orders prohibit future acquisitions without Commission approval. We expect that, in the next several years, this burden will be tripled. Also in need of strengthening to support all antimonopoly enforcement work as well as to assist in economic studies in the Division of Accounting which needs four more accountants and a clerk at a cost of $37,000. The total increase we ask for the Bureau of Restraint of Trade for fiscal 1971 is $543,000. That the Commission is provided with information and competent analyses of economic facts to evaluate business problems affecting competition and the consumer is of the utmost importance. Their availability is the key to wise planning and the most effective use of staff and money. Such research also provides Congress and other government agencies with information needed to assess government-business problems. However, our staff of 29 for such work is too small to carry on continuing planned research in view of frequent interruptions to perform special ad hoc projects. Result: most planned research projects have either had to be delayed or cancelled. In addition, the staff has been too small to give adequate assistance to other Bureaus and the Office of Program Review. Also, manpower has been lacking to perform most of the requests received from other government agencies. With an additional $131,000 for our Industry Analysis Division, we would have the capacity in fiscal 1971 to: (1) conduct a follow-up of our research program studying trends and patterns of conglomerate merger activity; (2) determine in what way more antitrust enforcement could alleviate trouble spots in highly concentrated industries, such as the steel industry; (3) find out why consumer oriented industries have experienced increased concentration while producer industries have experienced decreases; (4) make a careful analysis of factors contributing to effective product differentiation. And, in the field of consumer protection, staff strengthening would assure a continuation of economic information needed to support FTC's efforts to encourage advertising and product promotion which inform consumers about the quality and performance of products. It also would make possible a special study of the consumer credit industry, an analysis of the home improvement industry, and a study of the potential role of anitrust in relation to high prices in the medical and drug industries. It must be emphasized that special ad hoc projects regularly absorb the largest portion of available manpower in the Industry Analysis Division. Fiscal 1971 is likely to prove no exception. A major increase in staff strength is required for the Division of Economic Evidence inasmuch as its work plays a key role in FTC's entire law enforcement effort, most particularly in its challenge of illegal corporate mergers and its probe into concentrated industries. We ask for an increase of 20 in the Division's professional staff, at a cost of $249,000. This would key the Division's support capacity to FTC's enforcement Bureaus. A significant action to make available to the FTC and to the public more and better statistical information about the structure of U.S. industrial corporations would be to centralize in FTC's Financial Statistics Division the reporting program now divided between FTC and the Securities Exchange Commission. There are 87 multi-billion-dollar manufacturing corporations, according to the most recent FTC-SEC quarterly report. These 87 own nearly half of the total assets of all corporate manufacturers. Of the 569 firms which now own nearly three-fourths of all corporate manufacturing assets, 524 report to SEC and 45 to FTC. While FTC obtains each quarter information as to the ownership, sales, product mix, profitability, and the like of all large privately-owned manufacturing corporations, it does not have similar data for large publicly-owned firms. Approximately 8.300 firms now report to FTC in the FTC-SEC quarterly financial reporting program. If the 2,451 firms which report to SEC were to report instead to FTC, economic information not heretofore available to FTC could be developed for use on a continuing basis. Such centralization, which would be extremely valuable to the Commission in improving investigational planning and deploying its resources, can be accomplished by increasing the Division staff by 10 professional and 10 clerical employees at a cost of $180,000. The largest increase in manpower and money that we ask for any Bureau in fiscal 1971 is for our Bureau of Field Operations. Here the need is crucial to the Commission's law enforcement capacity and its ability to provide guidan and assistance to state and local governments, businessmen, and consumers This Bureau is the investigative arm of the FTC and its principal means of communication with the nation. Its present allocation of personnel is 23 positions fewer than in 1963. This is the fact despite a tremendous growth in the country's business and an even greater increase in responsibilities placed upon the field staff. Moreover, complexity of cases referred to the field staff, plus increases in evidentiary requirements, plus the fact that many cases involved industrywide considerations more than offset a slight reduction in numbers referred to the field in fiscal 1969. Also, the Commission directed the field offices to expedite many special projects and surveys which required the diversion of large numbers of attorneys from case work investigations. At one time this year, 85 field attorneys had to be assigned to special investigations and educational programs. This Spring, 37 field attorneys were assigned to educating creditors and others to the requirements of the Truth-in-Lending Act. Also, as Federal-State Cooperative programs continue to grow, our field offices are being called on to expand their contribution to the administration of these programs. Because of the fiscal 1971 workload anticipated for the Bureau of Field Operations and its expanded investigative and compliance work, plus probable special investigations and educational programs, we ask for 100 more field attorneys and 35 clerical personnel which, together with supporting costs, will require an additional $1,680,000. Two other major activities of the Commission, the work handled by its Bureau of Textile and Furs and the work handled by its Bureau of Industry Guidance, will not require any substantial additional funds in fiscal 1971. This presumes that enough of the funds requested for fiscal 1970 to provide necessary manpower to increase surveillance of dangerously flammable fabrics and garments will become available. As for the Industry Guidance work, our principal needs are for two additional attorneys to bolster the staff of the Division of Trade Regulation Rules, and two more for the Division of Industry Guides. Because we are not asking for substantial additional funds for these activities should not be interpreted to mean they are coasting, as the report of their work in the full text of this budget justification makes amply clear. The Office of the General Counsel was reorganized on June 11, 1969, and major changes (described in the full text of this justification) were made. For the Division of Litigation, where a heavier workload is anticipated in appellate court cases as well as district court litigation, plus a rise in subpoena enforcement actions, the staff needs strengthening by two attorneys. For the Division of Legal Services, three more are needed in view of the great increase in projects of the operating bureaus, and the implementation of new statutes, all of which most certainly will generate a heavier demand for the Division's legal services. Also, in fiscal 1971, we have reason to anticipate a sharp increase in requests from the States for advice and assistance regarding their own legislative or enforcement matters involving deceptive or unfair trade practices. In addition, the FTC will continue its policy of inviting a maximum of state and local effort to gain compliance with the trade laws. This, of course, serves FTC's purpose by halting illegalities at state or local level before they develop into regional or national problems. For the increase in workload for the General Counsel's office in fiscal 1971. we ask for an additional $113,000. An increased workload for the FTC in fiscal 1971 appears certain even if only the most pressing of its law enforcement obligations are undertaken. True, the Commission could become so selective in bringing adversary actions that it could operate on an even smaller budget, but were this to happen the consumer and reputable business would have to pay for the saving many times over. 1 In fiscal year 1969 judgments in the amount of $45,500 were levied in Federal Courts resulting from criminal and civil penalty suits filed by the Federal Trade Commission. On July 1, 1969, 21 civil penalty suits had been certified and were pending either in the Department of Justice or in Federal Courts. Inasmuch as this Commission has neither control over the amounts assessed nor subsequent collections no accurate estimate can be made of amounts that will be received in 1970 or 1971. FEDERAL TRADE COMMISSION SALARIES AND EXPENSES For necessary expenses of the Federal Trade Commission, including uniforms or allowances therefor, as authorized by law (5 U.S.C. 5901-5902), and services as authorized by 5 U.S.C. 3109 and not to exceed $500 for official reception and representation expenses, [$19,500,000] $27,110,000: Provided, That no part of the foregoing appropriation shall be expended upon any investigation hereafter provided by concurrent resolution of the Congress until funds are appropriated subsequently to the enactment of such resolution to finance the cost of such investigation. 1970 appropriation pending in U.S. Senate: President's budget to Congress.. H.R. 12307 passed by House of Representatives___. FEDERAL TRADE COMMISSION SALARIES AND EXPENSES $19, 940, 000 19, 500,000 1 Includes capital outlay as follows: 1969, $126,000; 1970, $220,000; 1971, $261,000. 2 Selected resources as of June 30 are as follows: |