merce," appearing in paragraph 2, Section 1, of this law. The term seems to cover the whole field of common carriers recognized by the common law when engaged in interstate and foreign trade and commerce, including trade and commerce with the Insular Possessions of the United States. Section 10 is not confined in its operation to incorporated bodies; the language employed apparently applies with equal force to natural persons who are common carriers.

Corporate Crime Involves Participating Officer or Agent.The principle recognized in Section 10, to the effect that the crime of a common carrier shall be deemed also that of its director, officers and agents, under Section 14 of the Clayton Law is applied to every corporation which shall commit a criminal offence against the Anti-trust laws. This section is as follows:

"That whenever a corporation shall violate any of the penal provisions of the Anti-trust laws, such violation shall be deemed to be also that of the individual directors, officers, or agents of such corporation who shall have authorized, ordered or done any of the acts constituting in whole or in part such violation, and such violation shall be deemed a misdemeanor, and upon conviction thereof of any such director, officer, or agent he shall be punished by a fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both, in the discretion of the court."

History and Purpose of Individual Responsibility Feature Discussed. While it is true that at first sight the legislative policy expressed in the foregoing section may appear to consist in applying new and untried measures to the suppression of longstanding abuses of corporate methods and powers, further and more complete investigation, it is believed, will show beyond question that this policy in fact is but a return to first principles.

In the early New York decisions found in Johnson's Reports the corporation was constantly referred to and dealt with as an aggregated body of individuals—a species of permanent partnership-in which the individuals and their rights could always be discerned through the transparent forms of chartered power. Again,-under the common law no corporation possesses the right to own stock in another corporation.

It will thus be seen that instead of adverse or destructive criticism, the policy outlined above and characteristic of the entire bill really calls for appreciation and support. It was conceived and born as the result of careful deliberations extending through numerous sessions of Congress; and prior to its advent received further and as it were parental thought from committees of both the Senate and House. The statute as it now appears is the result of an evolution extending through five proposed laws, which were regularly submitted and carefully debated, to the end that the best might be selected from each.

It is, accordingly, well within the facts to state that whatever the ultimate result as disclosed in practice, (the supreme test in legislation, as elsewhere,) the Clayton Law evinces an earnest and intelligent effort to comply with the requirements of a public demand for reform in business methods withtin the limits specified therein.

Conditions exist which have been productive of trusts, monopolies and combinations in restraint of trade, and which are almost wholly the result and slow outgrowth of abuses of corporate power; and when the legislators bring forward and enact a system of Anti-trust laws to fit the situation, it is very natural they should return to first principles and treat the individuals as the substance and the corporation as form. This explains much that on the surface seems strange or radical in the Anti-trust laws and in their sister-statute, the Federal Trade Commission Act.

The traditions of the law include a period before the "wilderness of precedents" had obscured the legal horizon. At that period partial or complete stock-ownership in one or more corporations by a competing company would have been impossible ; and the device of a holding company would have been unthought of,-certainly unworkable. Joint directorates could not then have grown into a system whereby as has been stated in a Congressional report, "fifty men in the United States control, through interlocking directorates, forty per cent. of the wealth of the country"; for there was no magic or mystery in a franchise or charter that permitted individuals thus disguised to create and maintain practical monopolies in a manner and to an extent which

9 See page 5 of report on "Interstate Trade Commission," submitted by Mr. Covington on behalf of the House Committee on Interstate and Foreign Commerce, April 14, 1914.

the common law has always frowned upon and condemned. If these observations are in point, they will serve to indicate the logic of the legislation making it imperative upon prosecuting officers and courts to deem the crime of a corporation also that of its directors, officers and agents, when Anti-trust laws are violated.

Embezzlement by Common Carrier Officer is Made a Felony.-Section 9 consists of matter apparently foreign to the purpose and scope of the Anti-trust laws. It is out of place here, excepting in so far as it tends to emphasize and stamp with disapproval acts derogatory to or destructive of the best interests, prosperity and even existence of the common carrier by and through the persons to whom have been entrusted its affairs by confiding shareowners. Perhaps it was in the minds of the legislators that by giving it a place immediately following the sections relating to stock control and interlocking directorates, the result would be beneficial to the extent of supplying a suitable background for those regulations, thereby impressing officers, directors and managers of common carriers and corporations with the serious nature of the improved methods which, taken together, constitute the essential principle of the Anti-trust laws.

However that may be, the text of paragraph 1, of Section 9, is as follows, and speaks for itself:

"Every president, director, officer or manager of any firm, association or corporation engaged in commerce as a common carrier, who embezzles, steals, abstracts or willfully misapplies, or willfully permits to be misapplied, any of the moneys, funds, credits, securities, property or assets of such firm, association or corporation, arising or accruing from, or used in, such commerce, in whole or in part, or willfully or knowingly converts the same to his own use or to the use of another, shall be deemed guilty of a felony, and upon conviction shall be fined not less than $500 or confined in the penitentiary not less than one year or more than ten years, or both, in the discretion of the court."

The term "commerce as a common carrier," requires reference to Section 1, paragraph 2, where "commerce" is defined as constituting interstate and foreign trade or commerce; also, trade or commerce with or between any Insular Possessions, or between such Insular Possessions and any portion of the United Statesit being, however, expressly stipulated that none of the provisions

of the Clayton Law should apply to the Philippine Islands. The words, "common carrier," when unqualified include all classes of common carriers, except those conducted by an individual. Whether by intention or oversight, or because enterprises owned or managed by a single person are usually too small to receive legislative notice in this connection, the individually owned class of common carriers has been omitted from the general prohibition. Perhaps this omission is due to a desire to avoid the absurdity of instituting a criminal charge where the proof might and in many instances would disclose the fact that the defendant was disposing of property exclusively his own.

The legislative intent is directed to making more difficult even though it cannot entirely eradicate reckless or wasteful manipulation of corporate assets by methods which yield a mysterious or secret profit to the management or their friends. Instances of such abuses of corporate power, especially in railroad affairs, are too recent and notorious to require comment here.

The language employed is exceedingly broad; and cases seem certain to arise where the government will feel justified in charging an infraction of the statute. Until those cases have been brought and defendants have sought to justify their acts, it seems useless to endeavor to explain or to limit the signification of the statute as a whole, or to anticipate the shades of meaning or the relative importance which courts will see in the individual words. Such an attempt would savor of prophecy and entirely overstep the bounds of the present work.

There is ground to question the power of Congress to legislate regarding acts which relate to no department of government and where the acts are doubtless already penalized by the laws of the several States. This doubt relates to the general subjectmatter contained in Section 10,-dealings with construction, etc., companies, as well as to the crime defined and prohibited by Section 9. However, this right will probably be held to be similar to that lawfully exercised in connection with the creation of the Interstate Commerce Commission.

Of the severity of the penalty there can be no doubt. No maximum sum is named as to the fine, which must be at least $500; while the prison term of from one to ten years is sufficient to give pause to predatory interests, or rather to the individuals who undertake that kind of excursions into or attempt operations of

that description with, the assets of the enterprises committed to their charge.

Jurisdiction is conferred upon the United States District Courts of the districts where the respective offences are committed. Paragraph 2 also recognizes the jurisdictions of the several States, and conviction or acquittal on the merits therein is stated to be a bar to prosecution on the same charge in the Federal courts.

Contempt Proceedings Specified in Sections 21 to 25 NonCriminal.-In Sections 21 to 25, inclusive, provision is made for contempt proceedings to punish disobedience of court order by criminal acts; but since Section 25 specifically prescribes that the proceeding shall not "be a bar to any criminal prosecution for the same act or acts," it follows that those sections in legal contemplation operate as a civil and not as a criminal prosecution; otherwise, the defendant would be placed twice in jeopardy.

Section 20 Suggestive of Commendatory Court Ruling.In passing it should be noted that paragraph 2 of Section 20, contains a statement of a protective nature which closely resembles the commendatory court ruling advocated in Chapter V, pages 42-4. After declarations that peaceful persuasion by or assembling of employees shall not be enjoined, the paragraph concludes,—“nor shall any of the acts specified in this paragraph be considered or held to be violations of any law of the United States." These words certainly imply commendation or something akin thereto, since by the elimination of opposing action, the ground and occasion for any form of unfavorable notice appears to have been removed. The conclusion may be a fallacy; but the argument is interesting, even though it is not profound.

3. THE SHERMAN LAW.

Early Construction Reaffirmed.-This statute received a literal construction in the earlier decisions;10 but while the courts have since pursued different and sometimes diverging roads, they have returned to their original starting point, as appears by the judgments of dissolution in the Standard Oil and American Tobacco cases.11

10 American Biscuit and Mnfg. Co. v. Klotz, 44 Fed. 721; U. S. v. Addystone Pipe and Steel Co., 85 Fed. 271.

11 Standard Oil v. U. S., 221 U. S. 1; U. S. v. American Tobacco Co., 221 U. S. 66.