they find themselves pilloried and prosecuted for acts once the accepted path to railroad profits and business success. The prospect that the United States would reach the conclusion and conviction on all these issues, to-day established in English law was, up to thirty years ago, stronger in this country than in England.

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It is the fashion to treat the Sherman Anti-Trust Act of 1890 as if it were sporadic, passed without knowledge or consciousness of its scope and sweep. If this means that in 1890 no one expected to see railroad and industrial corporations which had been growing in power and might for twenty-five years, since the Civil War, brought under an absolute control which has shocked European and English financial opinion by its relentless penalties, this is perfectly true; but if any one imagines that this act did not respond to and express a national purpose as wide, deep and persistent as any in our history, he misreads the record. If the Sherman Act had been a mere accident, running counter to the deeper national purpose, the courts would have minimized it, as our courts have so often dealt with the legislative vagary of the day; but as all know the crucial decisions on this and like laws by courts of last resort, at Washington and elsewhere, have had the precise quality that the law (up to the decision carrying a step farther the regulation or prohibition of competition destroying combination), had been such as to leave the court open to go either way. Uniformly, the corporation view has lost. This common action in both fields of our complex system and through the triple instrumentalities of each, never takes place and never can take place, unless something more fundamental than opinion or even law is at work—a primal national instinct.

When the National Civic Federation called its first conference on trusts in 1903, it was impossible to secure from that gathering any common action. No resolutions were passed, because the general national purpose was not yet clear. The conference which met last October at Chicago was precisely such a body as might have been expected to break up again

without result. It was heterogeneous, it had no common purpose of standard, and at heart half of its members had strong personal interests, through their connection with railroads, trusts, unions, granges, commercial associations and federal and state governments. If this body reached a common conclusion, it is because the popular will is now clear as to the regulation of combination. The only error was in not seeing how universal and without exceptions their purpose was. It was generally accepted, and the committee on resolutions included men in each category mentioned, that railroad combinations could be permitted under the supervision of the Interstate Commerce Commission, that the great industrial corporations, "Trusts," must be classified, and such as affected interstate commerce so as to affect its federal regulation must pass under the supervision of the Federal Bureau of Corporations, that commercial associations, maintaining wholesale and retail discounts, must be given the common law rights vouchsafed them in the past, before the Sherman and state acts treated the protection of discounts as a restraint of trade, and that unions and granges, since they were not organized for profit, should be permitted combination in interstate commerce without regulation and supervision.


In 1911 the Supreme Court ordered the dissolution of the Standard Oil and American Tobacco Trusts. But it soon became apparent that the public would gain no advantage from this victory unless some supervisory authority should prevent secret understandings and unfair practices and secure real competition between the companies into which these trusts had resolved themselves. To accomplish this purpose Congress has enacted the two laws here outlined by Professor Henry R. Seager: (1915)

The principal provisions of the Trade Commission Act are: (1) A Federal Trade Commission of five members, each to serve seven years at an annual salary of $10,000, is created to supersede the Bureau of Corporations.

(2) "Unfair methods of competition in commerce are declared unlawful."

(3) Prevention of such methods is made a chief task of the Trade Commission, which is empowered, when convinced that unfair methods are being used, and "that a proceeding by it in respect thereof would be in the interest of the public," to serve a complaint, hold a hearing, and order their discontinuance. If this order be not complied with, the Commission has power to appeal to a circuit court of appeals for an injunction. This court reviews the case, limited as regards questions of fact by the provision that "the findings of the commission as to the facts, if supported by testimony, shall be conclusive."

(4) The Commission is given power to investigate corporations engaged in interstate commerce, other than banks and common carriers.

(5) It may require from them annual or special reports and other information.

(6) On its own motion, or at the request of the attorney general, it may investigate the manner in which decrees affecting industrial combinations are being carried out, and make public its findings, if it deems this wise.

(7) It may investigate any alleged violation of the antitrust acts upon the direction of the President or either house of Congress.

(8) On the application of the attorney-general, it is required to investigate practices or arrangements not in conformity with the anti-trust acts, and to recommend readjustments which will bring about such conformity.

(9) It is to make annual and other reports, holding inviolate, however, trade secrets and the names of customers.

(10) It is to classify corporations and make rules and regulations for the carrying out of the act.

(11) It is to investigate trade relations with foreign countries.

(12) On the request of a federal court, it is to act as master in chancery in advising as to the form which decrees of the court relating to industrial combinations should take, the acceptance of such advice being, of course, discretionary on the part of the court asking for it.

(13) To accomplish these purposes the Commission is given full authority to secure by subpoena all necessary information, documents, testimony, etc., the penalty for failure to supply information or for destroying records being fines of from $1,000 to $5,000, and for delay in supplying information after thirty days' notice, $100 a day for each day that the information is withheld.

(14) Special penalties are provided for employees of the Commission who are guilty of giving out unauthorized information.

The dominant note of this measure, therefore, is prevention rather than punishment. The Trade Commission is to investigate and, by its own reports and the reports required from the industrial combinations under its jurisdiction, secure the publicity which many students of the problem believe will by itself put an end to dubious and unlawful practices. It is to co-operate with the attorney-general and the courts in securing and maintaining compliance with the requirements of the law. On its own initiative it is to determine when unfair methods are being used, and order their discontinuance. To make clear that this part of its work is preventive rather than punitive, the injunction is relied upon as the sole means of enforcing orders of penalties in cases where its orders are disregarded and the offenders are adjudged guilty of contempt.

The Clayton Act-"an act to supplement existing laws against unlawful restraints and monopolies and for other purposes"-is, by contrast, a penal measure. Made up as it is of material drawn from four or five bills that were at one time under consideration in different committees of Congress, it lacks the simplicity and unity of the Trade Commission Act. Its principal provisions are:

(1) Price discriminations in connection with interstate commerce are declared to be unlawful, "where the effect of such discrimination may be to substantially lessen competition or tend to create a monopoly." Provisos permit differences based on grade, quality, or the quantity sold, on the cost of selling or transportation, or when "made in good faith to meet com

petition.' Also, the prohibition is declared not to prevent the selection of customers "in bona fide transactions, and not in restraint of trade."

(2) Exclusive selling or leasing contracts, whether of patented or unpatented articles, whose effect may be to "substantially lessen competition or tend to create a monopoly' are also declared unlawful.

(3) Damages due to acts in violation of these prohibitions, as well as the other prohibitions of the anti-trust acts, may be sued for and recovered threefold.

(4) Final judgments or decrees in government suits under the anti-trust acts are made, under certain limitations, prima facie evidence in private suits, exception being made of consent judgments or decrees.

(5) It is declared "that the labor of a human being is not a commodity or article of commerce" and that

nothing contained in the anti-trust laws shall be construed to forbid the existence and operation of labor, agricultural or horticultural organizations instituted for the purposes of mutual help, and not having capital stock or conducted for profit, (sic) or to forbid or restrain the individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations or the members thereof be held or construed to be illegal combinations or conspiracies in restraint of trade under the anti-trust laws.

(6) The acquisition of stock in one corporation by another, or the combination of two or more corporations through stockownership, where the effect "may be substantially to lessen competition to restrain

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or tend to create a monopoly," is prohibited. Provisos limit the application of this regulation in the case of common carriers developing branch lines, of subsidiary companies, etc., and exclude existing corporate relations.

(7) Somewhat complicated limitations are imposed upon interlocking directorates. The provision relating to industrial combinations prohibits any person, after two years from the approval of the act, from being a director in two or more corporations, any one of which has a capital of a million dollars

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