These provisions tend still further to add to the difficulty of correctly interpreting the section as a whole.


The interlocking here forbidden applies to directors only, and not to officers and employees also as in the case of banks.

The section provides that after two years from the approval of the act no person shall be a director in two or more corporations any one of which has capital, surplus and undivided profits aggregating more than $1,000,000 engaged in whole or in part in commerce, if such corporations are or shall have been by virtue of their business and location competitors, so that the elimination of competition by agreement between them would violate any of the provisions of the Anti-trust laws.

We have discussed under "Common Carriers" the application of this section to certain kinds of common

regarding monopolies, etc., I am requested to advise you whether the words "from and after two years from the date of the approval of” the said act, apply to paragraph 2 of Section 8.

* * *



In other words, Mr. Robert W. Webb, Vice-President of the Minneapolis Trust Company, inquires of your Board by letter dated the 20th instant, whether a director of the company is eligible to serve as a director of a national bank not having common ownership of stock, until the expiration of two years after the approval of the act. And if so, may he not further serve for such time thereafter as would constitute the unexpired part of one year from the date of his election?" (Here follow the pertinent provisions of the law.) From the facts stated and in accordance with my interpretation of the statute, I am of the opinion that the two years limitation mentioned in the first paragraph of section 8 of the act applies also to the second paragraph, and that a director of the said trust company is eligible to serve as a director of a national bank not having common ownership of stock, until the expiration of two years after the approval of the act; and that by authority of the last paragraph above quoted, he is eligible to further serve for such time thereafter as constitutes the unexpired part of one year from the date of election.

carriers not subject to the act to regulate commerce prior to the amendments of 1906. Our conclusion there drawn is that express, sleeping car, pipe line, and telephone and telegraph companies are subject to the absolute inhibition against interlocking directors.


There is no provision in the law against interlocking directors as between common carriers by railroad. As to interlocking directors of pipe lines, sleeping car, express, telephone and telegraph and other companies see comments on "Common Carriers."

Interlocking between common carriers and other corporations is discussed also under the heading "Common Carriers."


By the provisions of the Trade Commission law Congress has created the Federal Trade Commission

I am of the opinion also that the statute will fairly bear the liberal interpretation that it was intended that paragraphs 1 and 2 should be read together in order that the existing arrangements might not be subject to sudden and inconvenient changes; and that the first paragraph as to eligibility to serve as a director in two institutions whose deposits, capital, etc., exceed $5,000,000, be modified by the second in the case of institutions the stock of one of which is wholly owned by the stockholders in the other.

I am further of the opinion that it was the intention of Congress that the first two paragraphs of section 8 as to banks whose deposits, capital, surplus, etc., aggregate more than $5,000,000, and as to all banks in cities of over 200,000 population, the provisions as to time of the act taking effect, mutual savings banks, common stock ownership and Federal reserve banks, should apply alike.

The letter of Mr. Webb is herewith returned.

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(Comment: Released for publication December 3, 1914.)

which is designed to enforce certain rules laid down therein and also in the Clayton law, particularly as to corporations other than banks and common carriers. The Commission in its organization is very similar to and yet fundamentally unlike the Interstate Commerce Commission and is given in many respects like powers. It is designed to take the place of the Bureau of Corporations and is authorized to carry on all pending investigations of the Bureau and to exercise as to such the powers of the Bureau.

The Commission has two main functions which are quite different in their nature. The first is to investigate in very general and also specific ways corporations engaged in interstate commerce, except banks and common carriers. Its powers of investigation apparently do not extend to persons or partnerships. Its power to investigate corporations, however, includes power to investigate their relations with partnerships, associations or individuals. The second is to determine after hearing on complaint filed by the Commission whether particular persons, partnerships or corporations have violated any of the provisions of the two laws.

1. Inquisitorial Functions.

The Commission by section 6 of the law is given general power to gather and compile information and to investigate the organization, business, conduct, practices and management of any corporation engaged in commerce, excepting banks and common carriers, and the relations of such corporation to individuals, associations and partnerships. This is a very broad grant of power, but this power or duty to investigate could probably only be exercised for the better enforcement of the two new laws and the


Sherman law. The Commission is given the right to require annual or special reports in writing from corporations, either under oath or not as it may determine. These reports are limited to the same subjects as to which its general power of investigation is given. The Commission may not require information as to the financial condition of the corporation reporting. Penalties are imposed for failure to file the required reports.

The Commission is given power to investigate upon its own initiative or upon the application of the Attorney General the manner in which any final decree entered against a corporation in a suit brought by the government under the Anti-trust laws has been or is being carried out and to report its findings and recommendations; also to investigate and report the facts relating to any alleged violations of the Antitrust laws upon the request of the President or either house of Congress.

The Commission is authorized upon the application of the Attorney General to investigate and make recommendations for the readjustment of the business of any corporation alleged to be violating the Antitrust laws. This investigation may be conducted before or after legal proceedings against the corporation. Any corporation alleged to be violating the Anti-trust laws may thus be given the opportunity of readjusting its business before the burdens or penalties resulting from legal proceedings are imposed, and thereby maintain its organization and thereafter conduct its business in accordance with the law.

The law provides for the publication of annual and special reports of the Commission and of its decisions and also gives the Commission power to make public within its discretion information obtained by it, except trade secrets and names of customers.

Penalties are provided for employees of the Commission making public information without authority.

In the provision as to annual reports and elsewhere in the law it is suggested that the Commission will classify corporations and it is given the power to require reports or other information from particular classes only. Under this provision no doubt large numbers of corporations will be relieved from filing reports, thus saving expense and annoyance; and the Commission will not be uselessly engaged in handling large quantities of reports in which it may well know in advance it will have no possible interest. The Commission may, however, require reports at any time from any corporation subject to its jurisdiction.

The Commission is given power to investigate trade conditions with foreign countries where associations or combinations among the traders in such countries may affect the foreign trade of the United States.

Except as above stated, we find no language in the law indicating that the Trade Commission either should or should not hold public hearings or otherwise make public any information obtained by it, in the exercise of its strictly inquisitorial powers.

The Bureau of Corporations has not conducted its investigations by public hearings and it seems to be entirely optional with the Trade Commission as to whether it shall do so or not. The Interstate Commerce Commission employs publicity in connection with many though not all of its investigations.

2. Judicial Functions.

The other form of power vested in the Trade Commission is the power to hold hearings and enter orders. It is to be noted that complaints may not be

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