tions existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.

It therefore will appear plainly that while the definition under the Federal Trade Commission Act is broad, the limits contained in the wording of the Sherman Law and Clayton Law present a still wider circle of meaning. There can be no doubt as to the signification of the language in the Sherman Law, for the word "corporation" occurs only in the definition itself.

The distinction in meaning is important, and must be constantly borne in mind. In the Clayton Law and the Sherman Law "person" equals and includes "corporation," as well as individuals. On the other hand, the Federal Trade Commission Act, by giving a distinctive definition to the word "corporation," wherein no mention is made of "person," and wherein partnerships are specifically excepted-confines its verbal circumference to the usual and customary scope of the word "corporation" in other connections.

In brief, in the Clayton Law and Sherman Law "person" includes "corporation," unless the application is limited elsewhere in the former statute; whereas, in the Federal Trade Commission Act "person" is distinct from and does not include "corporation," but on the contrary retains the accustomed meaning of an individual entity in contradistinction to an associated or aggregate body.

1. FEDERAL TRADE COMMISSION ACT.

a. Individual Liability.

Nature of Statute, Described.-Under the provisions of Section 5 of this statute, the Commission is empowered to prevent "persons, partnerships, or corporations, except banks and common carriers" from using unfair methods of competition. In this connection there should again be noted the use of the word "persons" as distinct from "corporations"; for under the definitions in the Sherman Law, and, unless qualified, in the Clayton Bill as well, the word "persons" is inclusive of "corporation." Since corporated bodies can act only through their officers or agents, contempts and penalties are prescribed and directed against those individuals, to make that power effective. But, as has already been stated, Chapter III, the Federal Trade Commission in the

main is directed toward the establishment of a court or tribunal for correcting abuses growing out of unfair trade. In this respect it differs from the Clayton Law. The courts can enforce the rights conferred on the Commission by the former act; but those rights can be exercised and the corresponding proceedings initiated only by the Commission, in the first instance. Its visitorial powers extend only to corporations. Accordingly, obedience to "cease and desist" orders and to directions to testify, etc., is the essential liability individuals incur thereunder.

b. Corporate Liability.

Corporate Responsibility Incurred in Connection With Investigations and Reports.-In the Federal Trade Commission Act (Section 4, paragraph 2), corporation is defined as any company or association, incorporated or unincorporated, and with or without shares, which is organized to carry on business for profit, except partnerships. As has been specifically pointed out in Chapter V, the distinctive feature of the rights of the Commission under its creating act, is the limitation to the exercise of those rights only by "a proceeding * to the interest of the public." The Commission will necessarily require some written or sworn statement as the foundation for setting its powers in motion; and while the courts would not assume the responsibility of directing favorable or unfavorable action, it is altogether probable the courts by mandamus would compel it to exercise its discretion and elect whether it will become active in a given instance. Acts of individual initiative are permitted by the provisions of the Clayton Law, whereas administrative control is the dominant factor of the Federal Trade Commission Act. Careful inspection of Section 5 of the Federal Trade Commission Act will, it is believed, be convincing on this point; although the rules and procedure adopted by the Commission may modify or enlarge this section in practice.

The general investigating power over corporations, excepting banks and common carriers, expressed in Section 6, contains the essential feature of the act, aside from the definition and declaration of its powers and the measures for their enforcement, con

3 The requirements of application to institute a proceeding appear in Rule II, p. 232. For ruling that courts will compel a statutory board or commission to pass upon questions within its jurisdiction duly submitted to it for the exercise of its discretional powers,-see Interstate Commerce Commission v. Humboldt Steamship Co., 224 U. S. 474.

tained in Section 5 thereof. In brief, Sections 5 and 6 contain the picture; the remainder is mostly framework and setting. One prominent element in this somewhat novel phase of legislation is the fact that all the inquisitorial powers of the Trade Commission enumerated particularly in Section 6 are directed against corporations and not against persons, which under the definition in this law comprise only individuals. The right to proceed against persons as authorized in the statute seems in the main intended to provide the requisite machinery to reach and inspect such books, papers and records as those corporate inquiries of necessity entail. Cases may and no doubt will arise where disputes will occur respecting the ownership and legal custody of those documents; and in those instances the constitutional limitations contained in the fourth amendment regarding searches and seizures, and in the fifth amendment covering self-incrimination would of course apply.

Taken broadly, and considered as a whole, the Federal Trade Commission appears to have been intended by Congress to succeed the Bureau of Corporations so far as its powers of inquisition are concerned, but joined with an affirmative right to initiate court proceedings, such as the Bureau never possessed; and the authority to demand and compel the production of documents and papers is an incident to those powers.

2. THE CLAYTON LAW.

a. Individual Liability.

Measure Fills a Dual Capacity.-This statute must be regarded as occupying to some extent a dual position. As an amendment of or supplement to the Sherman Law, it partakes of that brevity which is the soul of drastic legislation as well as of wit. The earlier constitutions, both Federal and State, set forth rules of a general nature, for the guidance of the citizens, leaving to the courts or the several legislative bodies the functions of limiting, amplifying, or applying the rights, powers and duties therein enumerated and defined. In the later constitutions the tendency has been to leave less latitude to the institution and discretion of courts or legislatures. The details and limitations are self-contained; and the only functions remaining is to apply the constitutional decree. Both influences are traceable in the Clayton Law.

4 For text of creating provisions, see Appendix E, pages 284, 285.

The Sherman Law" is distinctly of the former class. The language is tense with meaning; words of widest scope have been chosen throughout, with deliberate intent, and to a certain degree the Clayton Law partakes of that quality. But as a medium of practical use and application, as well as to avoid the charge of presenting merely a counsel of perfection, it was seen that due regard must be had to the means at command to make its legal machinery effective. Thus, while the very and perhaps excessively comprehensive definition of "person" contained in the Sherman Law is retained in the Clayton Law, there are places where the word is utilized in connections that cannot possibly refer to other than individual human entities.

Certain Provisions Specifically Considered.-Section 2 of the Clayton Law declares price discrimination unlawful, and this practice no doubt is designated as one instance of the unfair competition prohibited by Section 5 of the Federal Trade Commission Law; construing the two statutes together, there can be no reasonable doubt that persons and partnerships are included in the inhibition.

The provision of Section 8 of the Clayton Law relates to interlocking directorates of two or more corporations. The word "person" is employed, but it can have no possible meaning here except that of a human individual. This dual meaning is in some places implied rather than set forth in distinct phraseology. No doubt there will be rulings by the Commission or courts which will differentiate, distinguish and point out the true significance, when opportunities for adjustment of disputed meanings shall arise.

The provisions contained in Sections 2, 3, 7, and 8 of the Clayton Law are not punishable in criminal proceedings. The statute, Section 11, affords the usual means of enforcement by applications to courts, where "contempt" can be shown.

Statute Creates Personal Liability for Individuals Concerned in Corporate Crimes.-Any violation of the penal provisions of the Anti-trust laws (which includes this bill, see Section 1) are by Section 14 declared to be deemed the deeds of the individual directors, officers, or agents who shall have participated therein; and violations of Section 10, regulating interlocking directorates between common carriers and construction, supply or financial

5 For text, see Appendix C, pages 279-281.

concerns, are likewise freighted with trouble for the individuals taking part therein, with the additional feature that "any person who shall, directly or indirectly, do or attempt to do anything" along the prohibited lines, shall be equally culpable. In this instance, the word "person" is doubtless mainly directed at individuals acting in some accessory capacity; and doubtless there are other places where a similar signification will be noted when the Clayton Law comes to be enforced in connection with its com panion statute, the Federal Trade Commission Act. Of this much we may be certain,-that all the prohibitions against interlocking directorates are of necessity applicable to individuals, although in terms directed against certain classes of incorporated bodies.

b. Corporate Liability.

Responsible for Illegalized Stock-Ownership.-In Section 7 it is made unlawful for one corporation to own stock in a competing concern, or to own shares in two or more competing companies. This prohibition of stock-ownership applies only to corporations. In contradistinction to Section 7, however, the provisions of Section 2, Price Discrimination; Section 3, Tying Contracts, and Section 8, Interlocking Directorates, apply to both individuals and corporations; but no criminal penalties are provided for violations of any of these four sections.

Acts in Violation of Anti-trust Laws Carry Triple Damages. Outside of and beyond the deterring influence of the contempt proceeding which we have seen may be instituted in cases of infraction of Sections 2, 3, 7, and 8, there exists the liability for three-fold damages. Pursuant to the provisions of Section 4, the person injured may sue for such damages in any district court where the defendant resides or has an agent, and may recover "threefold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee."

Ownership in Non-Competitive Stock Company Allowed.— Stock-ownership by corporations for investments, or in subsidiary companies, if for branches or extensions, is permitted, where the object is not merely to gain control and where the purpose is not otherwise unlawful or tending to substantially lessen competition. Further provisions of section 7 allow common carriers to own stock in branch line companies upon practically similar conditions; also, do not make unlawful any stock ownership that existed at the time when the statute went into effect.