The special provisions regarding interlocking directorates of banks, as passed by the House, were struck out by the Senate on the ground that the matter could best be provided for in connection with the banking laws. These provisions were, however, restored, with some modifications, by the conference committee and enacted into law. They prohibit interlocking of directors, officers or employees among large banks, those having deposits, capital, surplus and undivided profits aggregating more than five million dollars, wherever located. Moreover, subject to minor exceptions, no two banks, of whatever size, in a city of more than 200,000 inhabitants may have a common director, officer or employee. Naturally Congress has not undertaken to regulate private banks or those organized under state laws, but the act does apply to relations between a national bank on the one hand and a private or state bank on the other.

This provision as to banks is not qualified by any reference to the effect of the interlocking. It is not on its face directed against monopoly or restraint of competition among banks or in other business. The constitutionality of this provision cannot be questioned, since the national banks are creatures of the federal government. As to its justice and propriety there may be some doubt, and as to its effectiveness, for the reasons already mentioned above, still more doubt. The investigations of the Pujo committee have indeed made clear the immense power of concentrated banking interests. If that power can be weakened by this new legislation, most people will welcome it, even tho the law may incidentally prevent interlocking directorates among banks where no disadvantages would result therefrom.

It may be noted that there are no direct penalties for violation of the provisions as to intercorporate stockholding and interlocking directorates. The enforcement, except in the case of banks, rests with the Federal Trade Commission by a procedure similar to that in the case of unfair competitive methods.

While, as already indicated, a good many teeth were drawn from the anti-trust bill during its progress through Congress, there remains one provision which distinctly increases the terrors of the law.

Section 14 of the new act provides that whenever a corporation shall violate any of the penal provisions of any of the anti-trust laws, such violation shall be deemed to be also that of the individual directors, officers or agents who have authorized, ordered or done any of the acts constituting such violation. Upon conviction therefor any such director, officer or agent is subject to fine not exceeding $5000 or imprisonment not exceeding one year or both.

As is well known, practically no imprisonments have heretofore resulted from the enforcement of the antitrust laws. Most of the fines in criminal cases under them have been assessed against corporations. It is true that individuals could be punished for conspiracy under the Sherman act; but this new section will probably make it somewhat easier to punish them. There is no immediate likelihood, however, that the prisons will be overcrowded with trust offenders.

The anti-trust act provides (84) that any person injured in business or property by reason of the doing of anything forbidden in the anti-trust laws may sue and recover three-fold damages. This merely extends the similar provision of the Sherman act so as to cover all anti-trust laws including the new act itself.

Section 5 provides that a final judgment or decree in any suit brought by the United States under the antitrust laws, to the effect that the defendant has violated those laws, shall be prima facie evidence against such defendant in any suit or proceeding brought by any other party against him or it under the same laws. The House bill would have made such judgment or decree conclusive evidence, but the words prima facie were substituted in the Senate. No one can seriously doubt the propriety of this new provision. It is a needless burden upon a state, or upon a person injured by a violation of the anti-trust laws, to have to prove independently that the trust laws have been violated when the matter has already been determined in a government suit.

III. MISMANAGEMENT OF RAILROADS

The revelations of the Pujo investigation, of the New Haven investigation and of other recent investigations with reference to mismanagement of railroads and the mulcting of their stockholders have led to some drastic provisions, placed, perhaps somewhat illogically, in the new anti-trust act.

Those investigations had shown that great banks had often made unreasonable gains from the financing of railroads; that dummy construction companies and equipment concerns in which railroad officers were interested had made fat profits at the expense of the stockholders of the road. The anti-trust bill, as it passed the House, simply prohibited interlocking of directors or officers between a railroad and a concern of the kind specified with which it did business. In the

Senate, however, it was suggested that there might be cases where such relations were proper and desirable and that regulation rather than prohibition was called for. Substantially the provisions adopted by the Senate have now become law (§ 10). No common carrier may have dealings in securities or in supplies or may make contracts for construction or maintenance, to the amount of more than $50,000 in any one year, with a concern in which any director or any of certain specified officers of the railroad is interested, except under the conditions specified in the act. These conditions are, virtually, competition, publicity and supervision by the Interstate Commerce Commission. If the concern in question is the most favorable bidder under competitive bidding, the railroad may do business with it, but it must report the transactions to the Interstate Commerce Commission in detail and the commission may investigate to see whether there has been any abuse. Penalties are provided for violation of this section.

Another outcome of the recent revelations of railroad abuses is in section 9 of the anti-trust act, which declares that an officer or director of a common carrier who "embezzles, steals, abstracts or wilfully misapplies or wilfully permits to be misapplied" its money, securities or property is guilty of a felony. Such acts are, in general, already made crimes under the laws of the individual states, but it will perhaps be possible for the federal government to enforce them more effectively in the case of interstate carriers.

IV. THE FEDERAL TRADE COMMISSION

By all odds the most important feature of the new trust legislation is the creation of a Federal Trade Commission. The commission is composed of five members, appointed by the President with the advice and consent of the Senate. Not more than three may be of the same political party - a provision which is of doubtful merit, as it really recognizes party lines in the administration of that which should be looked upon as wholly outside of those lines. The term of office is seven years and the salary $10,000. The commission is in fact to be a body of similar dignity with the Interstate Commerce Commission, tho the latter has seven members.

The commission is to take over the Bureau of Corporations and the head of that bureau, Honorable Joseph E. Davies, has been appointed a member of the commission. The expert employees of the bureau will be a useful nucleus for the force of the commission. It may be noted that the special experts and examiners which the commission is authorized to employ are exempted from the classified civil service. It is a long step from a bureau of corporations headed by a single commissioner at a salary of $5000 to a board of five members, each paid twice that salary. Useful as have been the investigations of the bureau, the public has a right to expect from this great new connission results of a far more important character.

The new act contains full provisions as to the investigatory powers of the Trade Commission. In substance it gives the commission complete power to investigate