(THE CLAYTON ANTI-TRUST ACT.)

[PUBLIC-No. 212-63D CONGRESS.]
[H. R. 15657.]

An Act To supplement existing laws against unlawful restraints and monopolies, and for other purposes.

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Be it enacted by the Senate and House of Representatives of the United 3 States of America in Congress assembled, That "antitrust laws," as used herein, includes the Act entitled "An Act to protect trade and 5 commerce against unlawful restraints and monopolies," approved 6 July second, eighteen hundred and ninety; sections seventy-three 7 to seventy-seven, inclusive, of an Act entitled "An Act to reduce 8 taxation, to provide revenue for the Government, and for other 9 purposes," of August twenty-seventh, eighteen hundred and ninety- 10 four; an Act entitled "An Act to amend sections seventy-three and 11 seventy-six of the Act of August twenty-seventh, eighteen hundred 12 and ninety-four, entitled 'An Act to reduce taxation, to provide 13 revenue for the Government, and for other purposes,' approved 14 February twelfth, nineteen hundred and thirteen; and also this Act. 15 "Commerce," as used herein, means trade or commerce among the 16 several States and with foreign nations, or between the District of 17 Columbia or any Territory of the United States and any State, 18 Territory, or foreign nation, or between any insular possessions or 19 other places under the jurisdiction of the United States, or between 20 any such possession or place and any State or Territory of the United 21 States or the District of Columbia or any foreign nation, or within 22 the District of Columbia or any Territory or any insular possession 23 or other place under the jurisdiction of the United States: Provided, 24 That nothing in this Act contained shall apply to the Philippine 25 Islands.

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The word "person" or "persons" wherever used in this Act shall 27 be deemed to include corporations and associations existing under 28 or authorized by the laws of either the United States, the laws of 29 any of the Territories, the laws of any State, or the laws of any for- 30 eign country.

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SEC. 2. That it shall be unlawful for any person engaged in com- 32 merce, in the course of such commerce, either directly or indirectly 33 to discriminate in price between different purchasers of commodities, 34 which commodities are sold for use, consumption, or resale within 35 the United States or any Territory thereof or the District of Columbia 36 or any insular possession or other place under the jurisdiction of the 37 United States, where the effect of such discrimination may be to 38 substantially lessen competition or tend to create a monopoly in any 39 line of commerce: Provided, That nothing herein contained shall 40 prevent discrimination in price between purchasers of commodities 41 on account of differences in the grade, quality, or quantity of the 42 commodity sold, or that makes only due allowance for difference in 43 the cost of selling or transportation, or discrimination in price in 44 the same or different communities made in good faith to meet com- 45 petition: And provided further, That nothing herein contained shall 4€

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1 prevent persons engaged in selling goods, wares, or merchandise in 2 commerce from selecting their own customers in bona fide transac3 tions and not in restraint of trade.

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SEC. 3. That it shall be unlawful for any person engaged in com5 merce, in the course of such commerce, to lease or make a sale or 6 contract for sale of goods, wares, merchandise, machinery, supplies or 7 other commodities, whether patented or unpatented, for use, con8 sumption or resale within the United States or any Territory thereof 9 or the District of Columbia or any insular possession or other place 10 under the jurisdiction of the United States, or fix a price charged 11 therefor, or discount from, or rebate upon, such price, on the condi12 tion, agreement or understanding that the lessee or purchaser thereof 13 shall not use or deal in the goods, wares, merchandise, machinery, 14 supplies or other commodities of a competitor or competitors of the 15 lessor or seller, where the effect of such lease, sale, or contract for sale 16 or such condition, agreement or understanding may be to substan17 tially lessen competition or tend to create a monopoly in any line of 18 commerce.

19 SEC. 4. That any person who shall be injured in his business or 20 property by reason of anything forbidden in the antitrust laws may 21 sue therefor in any district court of the United States in the district 22 in which the defendant resides or is found or has an agent, without 23 respect to the amount in controversy, and shall recover threefold 24 the damages by him sustained, and the cost of suit, including a 25 reasonable attorney's fee.

26 SEC. 5. That a final judgment or decree hereafter rendered in any 27 criminal prosecution or in any suit or proceeding in equity brought 28 by or on behalf of the United States under the antitrust laws to the 29 effect that a defendant has violated said laws shall be prima facie 30 evidence against such defendant in any suit or proceeding brought 31 by any other party against such defendant under said laws as to all 32 matters respecting which said judgment or decree would be an estoppel 33 as between the parties thereto: Provided, This section shall not apply 34 to consent judgments or decrees entered before any testimony has 35 been taken: Provided further, This section shall not apply to consent 36 judgments or decrees rendered in criminal proceedings or suits in 37 equity, now pending, in which the taking of testimony has been com38 menced but has not been concluded, provided such judgments or 39 decrees are rendered before any further testimony is taken.

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Whenever any suit or proceeding in equity or criminal prosecution 41 is instituted by the United States to prevent, restrain or punish 42 violations of any of the antitrust laws, the running of the statute of 43 limitations in respect of each and every private right of action arising 44 under said laws and based in whole or in part on any matter com45 plained of in said suit or proceeding shall be suspended during the 46 pendency thereof.

47 SEC. 6. That the labor of a human being is not a commodity or 48 article of commerce. Nothing contained in the antitrust laws shall 49 be construed to forbid the existence and operation of labor, agricul50 tura, or horticultural organizations, instituted for the purposes of 51 mutual help, and not having capital stock or conducted for profit, or 52 to forbid or restrain individual members of such organizations from 53 lawfully carrying out the legitimate objects thereof; nor shall such 54 organizations, or the members thereof, be held or construed to be

illegal combinations or conspiracies in restraint of trade, under the antitrust laws.

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SEC. 7. That no corporation engaged in commerce shall acquire, 3 directly or indirectly, the whole or any part of the stock or other share 4 capital of another corporation engaged also in commerce, where the 5 effect of such acquisition may be to substantially lessen competition 6 between the corporation whose stock is so acquired and the corpora- 7 tion making the acquisition, or to restrain such commerce in any 8 section or community, or tend to create a monopoly of any line of 9

commerce.

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No corporation shall acquire, directly or indirectly, the whole or 11 any part of the stock or other share capital of two or more corporations 12 engaged in commerce where the effect of such acquisition, or the use 13 of such stock by the voting or granting of proxies or otherwise, may 14 be to substantially lessen competition between such corporations, or 15 any of them, whose stock or other share capital is so acquired, or to 16 restrain such commerce in any section or community, or tend to 17 create a monopoly of any line of commerce.

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This section shall not apply to corporations purchasing such stock 19 solely for investment and not using the same by voting or otherwise 20 to bring about, or in attempting to bring about, the substantial les- 21 sening of competition. Nor shall anything contained in this section 22 prevent a corporation engaged in commerce from causing the forma- 23 tion of subsidiary corporations for the actual carrying on of their 24 immediate lawful business, or the natural and legitimate branches or 25 extensions thereof, or from owning and holding all or a part of the 26 stock of such subsidiary corporations, when the effect of such forma- 27 tion is not to substantially lessen competition.

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Nor shall anything herein contained be construed to prohibit any 29 common carrier subject to the laws to regulate commerce from aiding 30 in the construction of branches or short lines so located as to become 31 feeders to the main line of the company so aiding in such construction 32 or from acquiring or owning all or any part of the stock of such branch 33 lines, nor to prevent any such common carrier from acquiring and 34 owning all or any part of the stock of a branch or short line constructed 35 by an independent company where there is no substantial competition 36 between the company owning the branch line so constructed and the 37 company owning the main line acquiring the property or an interest 38 therein, nor to prevent such common carrier from extending any of its 39 lines through the medium of the acquisition of stock or otherwise of 40 any other such common carrier where there is no substantial compe- 41 tition between the company extending its lines and the company 42 whose stock, property, or an interest therein is so acquired.

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Nothing contained in this section shall be held to affect or impair 44 any right heretofore legally acquired: Provided, That nothing in this 45 section shall be held or construed to authorize or make lawful any- 46 thing heretofore prohibited or made illegal by the antitrust laws, nor 47 to exempt any person from the penal provisions thereof or the civil 48 remedies therein provided.

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SEC. 8. That from and after two years from the date of the approval 50 of this Act no person shall at the same time be a director or other offi- 51 cer or employee of more than one bank, banking association or trust 52 company, organized or operating under the laws of the United States, 53 either of which has deposits, capital, surplus, and undivided profits 54

1 aggregating more than $5,000,000; and no private banker or person 2 who is a director in any bank or trust company, organized and oper3 ating under the laws of a State, having deposits, capital, surplus, and 4 undivided profits aggregating more than $5,000,000, shall be eligible 5 to be a director in any bank or banking association organized or 6 operating under the laws of the United States. The eligibility of a 7 director, officer, or employee under the foregoing provisions shall be 8 determined by the average amount of deposits, capital, surplus, and 9 undivided profits as shown in the official statements of such bank, 10 banking association, or trust company filed as provided by law during 11 the fiscal year next preceding the date set for the annual election 12 of directors, and when a director, officer, or employee has been elected 13 or selected in accordance with the provisions of this Act it shall be 14 lawful for him to continue as such for one year thereafter under said 15 election or employment.

16 No bank, banking association or trust company, organized or oper17 ating under the laws of the United States, in any city or incorporated 18 town or village of more than two hundred thousand inhabitants, as 19 shown by the last preceding decennial census of the United States, 20 shall have as a director or other officer or employee any private 21 banker or any director or other officer or employee of any other 22 bank, banking association or trust company located in the same place: 23 Provided, That nothing in this section shall apply to mutual savings 24 banks not having a capital stock represented by shares: Provided 25 further, That a director or other officer or employee of such bank, 26 banking association, or trust company may be a director or other 27 officer or employee of not more than one other bank or trust company 28 organized under the laws of the United States or any State where 29 the entire capital stock of one is owned by stockholders in the other: 30 And provided further, That nothing contained in this section shall 31 forbid a director of class A of a Federal reserve bank, as defined in the 32 Federal Reserve Act from being an officer or director or both an 33 officer and director in one member bank.1

34 That from and after two years from the date of the approval of this: 35 Act no person at the same time shall be a director in any two or more 36 corporations, any one of which has capital, surplus, and undivided 37 profits aggregating more than $1,000,000, engaged in whole or in part. 38 in commerce, other than banks, banking associations, trust companies: 39 and common carriers subject to the Act to regulate commerce, ap40 proved February fourth, eighteen hundred and eighty-seven, if such 41 corporations are or shall have been theretofore, by virtue of their 42 business and location of operation, competitors, so that the elimina-43 tion of competition by agreement between them would constitute a 44 violation of any of the provisions of any of the antitrust laws. The: 45 eligibility of a director under the foregoing provision shall be deter46 mined by the aggregate amount of the capital, surplus, and undivided 47 profits, exclusive of dividends declared but not paid to stockholders, 48 at the end of the fiscal year of said corporation next preceding the 49 clection of directors, and when a director has been elected in accord50 ance with the provisions of this Act it shall be lawful for him to con51 tinue as such for one year thereafter.

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When any person elected or chosen as a director or officer or selected! 53 as an employee of any bank or other corporation subject to the provi-. 54 sions of this Act is eligible at the time of his election or selection to act, 1 See further proviso added by the Act of May 15, 1916. Infra, page 13.