Established in 1914 to prohibit "unfair methods of competition" under the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914), the Federal Trade Commission (FTC), prior to the 1920s, aggressively pursued an antimonopolistic course. Beginning with President Harding's administration, however, the FTC assumed a friendlier stance toward business and the number of anti-trust suits declined. The creation of a new FTC division in 1926, the Division of Trade Practice Conference, forestalled legal action against alleged violators by organizing business conferences intended to forge voluntary, industry-by-industry consensus on what constituted fair trade practices. Commerce Secretary Herbert Hoover played a role in setting up the conferences, which were in keeping with the Coolidge administration's faith in the ability and willingness of business to monitor and, when necessary, reform itself. (INTRO NOTE Coolidge Presidency)
In 1925, President Coolidge replaced Commissioner Nelson B. Gaskill with William E. Humphrey, formerly of the House of Representatives, whose appointment gave conservatives a majority at the FTC. The Commission subsequently sought to end investigation of matters deemed "insignificant" or "trivial," in the words of Commissioner Humphrey's April 6, 1925 letter to presidential secretary Edward Clark in the Coolidge Papers case file,
Commissioner Humphrey favored this new way of proceeding because, he argues in the case file correspondence, it saved the American taxpayer the cost of protracted court suits. He also maintains that its greater economy is in keeping with the presidential insistence on economy in government. (DETAIL NOTE Business Organization of the Government)