A Legislative Landmark and the End of an Era

On this day in economic and financial history...

President Woodrow Wilson established the Federal Trade Commission on Sept. 26, 1914. The FTC was one of Wilson's major legislative achievements, and the agency has served as an enforcement arm against monopolistic and unfair business practices for nearly a century. It has played important roles in many notable antitrust cases, including:

  • United States v. Paramount Pictures (a subsidiary of Viacom (Nasdaq: VIA  ) ), decided in 1948: This broke up the vertically integrated Hollywood studio system, which had previously allowed studios to control the entire film production and distribution chain from script to theater.
  • Federal Trade Commission v. Morton Salt, decided in 1948: This prevented companies from offering quantity discounts only to those customers with the greatest purchasing power.
  • Federal Trade Commission v. Procter & Gamble (NYSE: PG  ) , decided in 1967: This held that the consumer products giant's 1957 acquisition of Clorox violated antitrust laws, establishing the precedent that a potential competitor cannot acquire a smaller company with a dominant market share, regardless of its present participation in that market.
  • United States v. Microsoft (Nasdaq: MSFT  ) , settled in 2001: This case resulted in little real change to Microsoft's business practices, but has generated intense debate for years afterward over the role of government oversight and antitrust regulation in the digital age. The FTC later filed suit against Intel (Nasdaq: INTC  ) over its rebate practices, which resulted in a similar settlement.

The FTC is also responsible for enforcing truth-in-advertising regulations, the Do Not Call list, and product labeling standards, among other key tasks.

Political repercussions, here and abroad
The Dow Jones Industrial Average (INDEX: ^DJI  ) suffered a 6.5% decline on Sept. 26, 1955 as it reacted to news of President Eisenhower's heart attack. It remains the Dow's worst Sept. 26 performance since its creation in 1896, and was called one of the worst drops since the 1929 crash by newspapers across the country. The market's total volume, 7.7 million shares traded, was the largest since 1933.

Eisenhower would recover, and so would the Dow -- it gained 22% over the course of the entire year.

Britain and China agreed to transfer control of Hong Kong on Sept. 26, 1984. The colony was officially transferred to China in 1997, after more than 150 years of British control.

Hong Kong has played a vital role in linking mainland China with global financial markets. Two years after the transfer agreement was finalized, the Hong Kong Stock Exchange traded 249 companies that had a combined market cap of $32 billion. Today 1,533 companies trade on the exchange, with a combined market cap of $2.4 trillion. It is the sixth-largest exchange in the world, narrowly edging China's own Shanghai Stock Exchange.

You don't need to look in Hong Kong's stock market to find great international investments. There are plenty of American companies that want to rule the world, and the Fool's picked out three that we feel have the best chances. Want to know more? Click here for your free report on the global giants you should buy today.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights.

The Motley Fool owns shares of Clorox, Intel, and Microsoft. Motley Fool newsletter services have recommended buying shares of Intel, Procter & Gamble, and Microsoft. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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