Section 27. Act to Regulate Commerce of 1887.

The Act to Regulate Commerce of February 4, 1887, was apparently the first Federal statute containing any provision aimed to prevent monopolistic combinations, although the provision relating to such combinations is merely incidental to the broader purposes of the law.

Section 5 of this law prohibits any common carrier subject to this act from making any agreement with another common carrier for the pooling of freights of different and competing railroads or from dividing the earnings of such railroads.

SEC. 5. That it shall be unlawful for any common carrier subject to the provisions of this Act to enter into any contract, agreement, or combination with any other common carrier or carriers for the pooling of freights of different and competing railroads, or to divide between them the aggregate or net proceeds of the earnings of such railroads, or any portion thereof; and in any case of an agreement for the pooling of freights as aforesaid, each day of its continuance shall be deemed a separate offense.

The only important case apparently which has been decided by the Supreme Court with reference to the construction of this section was Southern Pacific Co. v. Interstate Commerce Commission.1 Certain western railroads had published through rates on citrus fruits from California to the Atlantic seaboard, allowing the shippers to control the routing. Later, on account of rebating to shippers practiced by connecting eastern roads, they issued new rates and reserved to themselves the routing, at the same time promising fair treatment to the eastern roads and eventually giving them certain percentages of guaranteed tonnage. The Interstate Commerce Commission, which regarded this action as subjecting shippers to undue disadvantage and a violation of section 3 of the Act to Regulate Commerce of 1887, ordered them to desist. The circuit court upheld the order, but on the ground that this arrangement was a violation of the prohibition against pooling in section 5. The Supreme Court reversed this decision, however, holding that the acts complained of were lawful and did not amount to a pooling of freights within the meaning of section 5. The court said in part (p. 560):

Now, while the most important, if not the only, effect of the routing agreement is to take away this rebating practice, and to hold all parties to that agreement as part of the joint through rate tariff, we think no case is made out of a violation of the pooling provision in the fifth section of the act, even where the initial carrier promises fair treatment to the connecting roads, and carries out such promises.

Rate agreements among railroads have also been attacked, however, under the Sherman Antitrust Law (see p. 95), and also combinations in the form of holding companies. (See p. 103.)

1220 U. S., 536 (1906).

Section 28. Wilson Tariff Act of 1894.

This law was entitled "An act to reduce taxation, to provide revenue for the Government, and for other purposes," and became a law on August 27, 1894. In connection with the legislation regarding customs duties, certain provisions were inserted with a view to preventing combinations in restraint of trade with respect to the foreign commerce of the United States. These provisions are contained in sections 73 to 77, inclusive, of the said law. Sections 73 and 76 were slightly amended on February 12, 1913, the amended form being shown below.

Section 73 of the Wilson Tariff Act declares contrary to public policy, illegal, and void every combination, etc., of persons or corporations when any of them is engaged in importing articles into the United States, and when such combination is intended to operate in restraint of lawful trade or free competition in lawful trade, or to increase the market price in the United States of any article imported or of any manufacture into which such imported article enters; violation of the act is declared a misdemeanor and penalties are provided.

SEC. 73. That every combination, conspiracy, trust, agreement, or contract is hereby declared to be contrary to public policy, illegal, and void, when the same is made by or between two or more persons or corporations either of whom, as agent or principal, is engaged in importing any article from any foreign country into the United States, and when such combination, conspiracy, trust, agreement, or contract is intended to operate in restraint of lawful trade, or free competition in lawful trade or commerce, or to increase the market price in any part of the United States of any article or articles imported or intended to be imported into the United States, or of any manufacture into which such imported article enters or is intended to enter. Every person who is or shall hereafter be engaged in the importation of goods or any commodity from any foreign country in violation of this section of this Act, or who shall combine or conspire with another to violate the same, is guilty of a misdemeanor, and, on conviction thereof in any court of the United States, such person shall be fined in a sum not less than one hundred dollars and not exceeding five thousand dollars, and shall be further punished by imprisonment in the discretion of the court, for a term not less than three months nor exceeding twelve months.1

Section 74 of this act, which provides for suits in equity by the United States Government, is practically identical in phraseology with section 4 of the Sherman Antitrust Act, except that it is made applicable to offenses described in section 73 of this act. The precise terms of this section, therefore, do not require repetition here. (See p. 71.)

Section 75 of this act, which relates to the jurisdiction of the courts in such equity suits, is practically identical in phraseology with section 5 of the Sherman Antitrust Act, except in the section

The act of 1913, referred to above, amended this section by inserting the words "as agent or principal" near the beginning of the section.

numbers referred to, and, therefore, need not be repeated here. (See p. 71.)

Section 76 of this act, which relates to the seizure and condemnation of property owned by a combination, etc., is practically the same as section 6 of the Sherman Antitrust Act, except that it applies to articles "imported into and being within the United States or being in the course of transportation from one State to another, or to or from a Territory, or the District of Columbia," instead of to articles "in the course of transportation from one State to another, or to a foreign country." (See p. 71.) It is therefore unnecessary to give the precise terms in further detail.

Section 77 of this act is identical with section 7 of the Sherman Antitrust Act, except that it is introduced with the additional word "that," and, therefore, need not be repeated here. (See p. 72.)

The most striking variation of the Wilson Tariff Act from the Sherman Antitrust Act is in the definition of the offense in section 73, which has been given above. In particular it should be noted that a combination "to increase the market price" either of an imported article or of an article manufactured from such imported article, is prohibited. This provision is made in addition to provisions prohibiting combinations "in restraint of lawful trade" or "free competition in lawful trade or commerce." No reference is made in this act to monopolizing or attempting to monopolize.

Section 29. Panama Canal Act of 1912.

An act of August 24, 1912, to provide for the opening of the Panama Canal, etc., provided in section 11, that section 5 of the Act to Regulate Commerce of February 4, 1887, should be amended substantially as follows: After July 1, 1914, it is declared unlawful for any common carrier subject to the provisions of the act to own, or control, directly or indirectly, or to have any interest in any common carrier by water, or vessel carrying freight or passengers, operated through the Panama Canal, or elsewhere, with which the said carrier does or may compete. Jurisdiction is conferred on the Interstate Commerce Commission to determine questions of fact in this connection and to make orders in respect thereto which are final. If the commission is of opinion that such service by water, other than through the Panama Canal, is being operated in the interest of the public, etc., and will not reduce competition, it may extend the period for which such service may be operated beyond July 1, 1914, subject to regulation by the commission in the same manner as the railroad which controls it is regulated. This amendment provides further that no vessel may engage in the coastwise or

1 The act of 1913, referred to above, amended this section by inserting the words "imported into and being within the United States, or being" near the middle of the section.

foreign trade of the United States or pass through the Panama Canal if it is owned or controlled by any person or company doing business in violation of the Sherman Antitrust Act, or sections 73 to 77, inclusive, of the Wilson Tariff Act of 1894, or any acts amending or supplementing either of them. Jurisdiction in respect to this last provision is conferred on the Federal courts. The text of the foregoing provisions is as follows:

From and after the first day of July, nineteen hundred and fourteen, it shall be unlawful for any railroad company or other common carrier subject to the Act to regulate commerce to own, lease, operate, control, or have any interest whatsoever (by stock ownership or otherwise, either directly, indirectly, through any holding company, or by stockholders or directors in common, or in any other manner) in any common carrier by water operated through the Panama Canal or elsewhere with which said railroad or other carrier aforesaid does or may compete for traffic or any vessel carrying freight or passengers upon said water route or elsewhere with which said railroad or other carrier aforesaid does or may compete for traffic; and in case of the violation of this provision each day in which such violation continues shall be deemed a separate offense.

Jurisdiction is hereby conferred on the Interstate Commerce Commission to determine questions of fact as to the competition or possibility of competition, after full hearing, on the application of any railroad company or other carrier. Such application may be filed for the purpose of determining whether any existing service is in violation of this section and pray for an order permitting the continuance of any vessel or vessels already in operation, or for the purpose of asking an order to install new service not in conflict with the provisions of this paragraph. The Commission may on its own motion or the application of any shipper institute proceedings to inquire into the operation of any vesel in use by any railroad or other carrier which has not applied to the Commission and had the question of competition or the possibility of competition determined as herein provided. In all such cases the order of said Commission shall be final.

If the Interstate Commerce Commission shall be of the opinion that any such existing specified service by water other than through the Panama Canal is being operated in the interest of the public and is of advantage to the convenience and commerce of the people, and that such extension will neither exclude, prevent, nor reduce competition on the route by water under consideration, the Interstate Commerce Commission may, by order, extend the time during which such service by water may continue to be operated beyond July first, nineteen hundred and fourteen. In every case of such extension the rates, schedules, and practices of such water carrier shall be filed with the Interstate Commerce Commission and shall be subject to the Act to regulate commerce and all amendments thereto in the same manner and to the same extent as is the railroad or other common carrier controlling such water carrier or interested in any manner in its operation: Provided, Any application for extension under the terms of this provision filed with the Interstate Commerce Commission prior to July first, nineteen hundred and fourteen, but for any reason not heard and disposed of before said date, may be considered and granted thereafter. No vessel permitted to engage in the coastwise or foreign trade of the United States shall be permitted to enter or pass through said canal if such ship is owned, chartered, operated, or controlled by any person or company which is doing business in violation of the provisions of the Act of Congress approved July second, eighteen hundred and ninety, entitled "An Act to protect trade and commerce against unlawful restraints and monopolies," or the provisions of sections seventy-three to seventy-seven, both inclusive, of an Act approved August twenty-seventh, eighteen hundred and

ninety-four, entitled "An Act to reduce taxation to provide revenue for the Government, and for other purposes," or the provisions of any other Act of Congress amending or supplementing the said Act of July second, eighteeen hundred and ninety, commonly known as the Sherman Antitrust Act, and amendments thereto, or said sections of the Act of August twenty-seventh, eighteen hundred and ninety-four. The question of fact may be determined by the judgment of any court of the United States of competent jurisdiction in any cause pending before it to which the owners or operators of such ship are parties. Suit may be brought by any shipper or by the Attorney General of the United States.

Section 30. Federal Trade Commission Act.

The Federal Trade Commission Act of September 26, 1914, established a commission with administrative and quasi-judicial functions. In certain aspects both of these functions have relation to the enforcement of the antitrust laws, and only in respect to these functions is it necessary to consider the Federal Trade Commission Act in this connection.

Section 6 of this act confers on the commission the following powers, among others: (1) To investigate the organization, business, management, etc., of corporations engaged in commerce, excepting banks and common carriers; (2) to require such corporations to make annual and special reports; (3) to investigate and report to the Attorney General on the manner in which a decree to prevent or restrain violations of the antitrust acts has been carried out; (4) to investigate and report on alleged violations of the antitrust acts upon the request of the President or either House of Congress; (5) to investigate and make recommendations concerning the readjustment of the business of any corporation alleged to be violating the antitrust acts, upon the application of the Attorney General; (6) to investigate trade conditions in foreign countries where combinations or other conditions may affect the foreign trade of the United States, and to report and make recommendations to Congress. This section reads as follows:

SEC. 6. That the commission shall also have power-

(a) To gather and compile information concerning, and to investigate from time to time the organization, business, conduct, practices, and management of any corporation engaged in commerce, excepting banks and common carriers subject to the Act to regulate commerce, and its relation to other corporations and to individuals, associations, and partnerships.

(b) To require, by general or special orders, corporations engaged in commerce, excepting banks, and common carriers subject to the Act to regulate commerce, or any class of them, or any of them, respectively, to file with the commission in such form as the commission may prescribe annual or special, or both annual and special, reports or answers in writing to specific questions, furnishing to the commission such information as it may require as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective corporations filing such reports or answers in writing. Such reports and answers shall be made under oath, or otherwise, as the commission may prescribe, and shall be filed with the commission within such reasonable period as the co