show the kind and nature of the trade practices which Congress appears to have intended to prohibit by declaring "unfair methods of competition in commerce" unlawful. Since what is "unfair" in respect of competitive methods, as in respect of anything else, is a relative matter, depending upon the circumstances of each particular case, se it is obviously impossible to work out v. Patterson (1912) 201 Fed. 697, 701-704, s. c., (1913) 205 Fed. 292, 300; s. c. (1915) 222 Fed. 599; United States v. U. S. Steel Corporation (1915) 223 Fed. 55, 6163; United States v. Great Lakes Towing Co. (1913) 208 Fed. 733, 744-745; decrees in unreported cases involving the American Thread Co., the American Coal Products Co., and the General Electric Co., printed in 51 Cong. Rec. 12246-12248 (bound vol. pp. 11228-11230). 86 As a circumstance bearing upon the question whether or not any given trade practice constitutes an unfair method of competition, the size of the business concern pursuing the practice may be not unimportant. "A merchant may without offense add one department to another as his business prospers, or his ambition expands; for the size and the varied character of his enterprise do not in themselves violate the Anti-Trust Act. Size does not of itself restrain trade or injure the public; on the contrary, it may increase trade and may benefit the consumer; but, if the power given by the volume of a particular business is improperly used to injure either a competitor or the public, or if such power evidently tends toward the injury of either, the mischief either done or threatened is condemned by the statute [i. e., the Sherman Law]. In this connection, it may be observed that, as power increases, the temptation to abuse it is likely also to increase, so that the acts of an influential factor in a particular trade may well be scrutinized with more suspicion than the acts of a weak and inconspicuous contributor." McPherson J., in United States V. Keystone Watch Case Co. (1915) 218 Fed. 502, 510 (our italics). "Whether a particular act, contract or agreement was a reasonable and normal method in furtherance of trade and commerce may, in doubtful cases, turn upon the intent to be inferred from the extent of the control thereby secured over the commerce affected, as well as by the method which was used." Mr. Justice Lurton, in United States V. Reading Co. (1912) 226 U. S. 324, 370 (our italics). "Even competitive practices, of a nature which as between business rivals standing practically on even terms may be normal and lawful, yet when employed by a powerful monopolistic anything in the nature of a definition of "unfair methods of competition," or to formulate a rule of thumb as to what may safely be done, or must certainly be avoided, under the Trade Law. About all that can be said would seem to be that no competitive practice can be an “unfair method of competition" within the Trade Law, unless the effect of the practice may be to eliminate or substantially to lessen competition, to restrain trade unduly, or to create or perpetuate monopoly, and on the other hand, that any trade method potent to eliminate or substantially to lessen competition, to restrain trade unduly, or to create or perpetuate monopoly may be held an "unfair method of competition" within the Trade Law, if such potentiality of the method be due to anything else than the user's superior industrial efficiency exerted solely through commercial practices of generally conceded propriety. § 26. Trade Law and Clayton Law construed together: The construction hereinabove put upon the words "unfair methods of competition" as used in the Trade Law, may perhaps be urged to be too broad. Four trade practices were mentioned in the Standard Oil Company Cases as "unfair methods of competition." Only two of those four practices, namely local price cutting and payment of rebates, were selected by Congress for express description and denunciation in the Clayton Law.88 The Clayton Law was not approved, and did not go into combination with the ability to crush, and for the purpose of crushing, a weak rival, may become abnormal and unlawful." Per curiam, in United States v. Great Lakes Towing Co. (1913) 208 Fed. 733, 744. "Generally speaking, I think that a business should not be permitted to develop to such proportions as to unreasonably engross a trade." Hazel J., in United States v. Eastman Kodak Co. (1915) 226 Fed. 62, 77. Cf., note 63, supra. 87 Sec. 15, supra. 88 Secs. 4, 9, 10, 11, 12, supra. effect, until after the Trade Law.89 From those circumstances, it might perhaps be argued that the legislative intention was, in and by the Clayton Law, to define and limit the meaning of the phrase "unfair methods of competition" as used in the Trade Law, so as to exclude therefrom, and from the regulative power of the Trade Commission, any trade practices affecting competition except those particularly described and specifically declared unlawful by the Clayton Law. That such will be held to have been the legislative intention seems unlikely, however. If that narrow construction of the Trade Law and the Clayton Law should be adopted, the result of course would be to deprive the words "unfair methods of competition," as used in the Trade Law, of all effect. That result the courts will avoid, if reasonably possible.90 The Trade Law and the Clayton Law are not inconsistent in any degree. The courts will so construe them as to give full force and effect to all of the provisions of each.91 When the Trade Law was upon its passage in Congress, several amendments were offered with a view to defining more or less explicitly the words "unfair methods of competition." But all such amendments were rejected. That circumstance indicates a legislative purpose, by the use of general language, not to limit the application of the regulative powers of the Trade Commission to specified acts, but rather to establish a general standard of conduct, and to leave it to the Trade Commission in the first instance, and to the courts finally, 89 See notes 1 and 11, supra. 90Heydenfeldt v. Daney Gold etc. Co. (1876) 93 U. S. 634, 640; United States v. Ninety-nine Diamonds (1905) 139 Fed. 961, 963964. 91Ex parte Crow Dog (1883) 109 U. S. 556, 570; Chew Heong v. United States (1884) 112 U. S. 536, 549-550; United States V. Langston (1886) 118 U. S. 389, 393, 394. to apply that standard to the facts and circumstances of each particular case. Nothing inconsistent with that conclusion can be found in the fact that, in enacting the Clayton Law, Congress saw fit expressly to describe and denounce therein certain particular practices which, if not so specified, probably would have been held, under most circumstances, to be "unfair methods of competition" within the Trade Law. That doubtless was a mere precautionary measure on the part of Congress to guard against the possibility that, under particular circumstances, the competitive methods covered by the Clayton Law might be regarded by the Trade Commission, or the courts, as not so "unfair" as to fall within the operation of the Trade Law. The plain intention of Congress was that the trade practices covered by the Clayton Law should be prevented at all events, and that all other trade practices, which the Trade Commission and the courts might find to be "unfair" in the sense indicated hereinabove,92 should also be prevented. That is the fair interpretation of the Trade Law and the Clayton Law, considered together, and the words "unfair methods of competition," as used in the Trade Law, cannot properly be taken as narrowed in meaning by the Clayton Law. § 27. Trade Law does not create a new wrong: Construed as it is hereinabove suggested they should be, the words "unfair methods of competition in commerce" as used in the Trade Law, include little if anything more than the words "attempt to monopolize ''93 as used in 92 Secs. 15-25, supra. 93"An attempt to monopolize means an attempt to get control of the industry in which the defendant is engaged by means which prevent other men from engaging in fair competition with him.'" Morton J., in United States v. Whiting (1914) 212 Fed. 466, 478 (our italics). "To constitute the offense of monopolizing or attempting to monopolize under the act of Congress, it is necessary to acquire, or attempt section two of the Sherman Law.94 That such is the correct construction of the phrase "unfair methods of competition," appears persuasively from the provision in the Trade Law that nothing in the said law contained shall be "construed to alter, modify, or repeal" 995 the antitrust laws, including of course the Sherman Law. The words "alter" and "modify" are comprehensive. They would seem to be adequate to cover any substantive change whatsoever. And since the Trade Law, so far as it prescribes any rule of conduct in commerce, and the * * * to acquire, an exclusive right in such commerce by means which will prevent others from engaging therein. Since the size of the business alone is not necessarily illegal, it is the crushing of competition, by means of force, threats, intimidation, fraud, or artful and deceitful means and practices, which violates the law. * * The size of business, and the gaining of business popularity, fair dealing, sagacity, foresight, and honest business methods, even if it should result in acquiring the business of competitors, would not make an illegal monopoly. It is the acquisition and use of unfair and illegal power in defeating competition which makes such illegal monopoly." Sheppard J., in United States v. American Naval Stores Co. (1909) 172 Fed. 455, 457-458, 459, affirmed in 186 Fed. 489, and reversed, but on another point, in 229 U. S. 373 (our italics). "It matters not whether the combination be 'in the form of a trust or otherwise', whether it be in the form of a trade association or a corporation, if it arbitrarily uses its power to force weaker competitors out of business, or to coerce them into a sale to or union with the combination, it puts a restraint upon interstate commerce, and monopolizes or attempts to monopolize a part of that commerce, in a sense that violates the anti-trust act." Lanning J., in United States v. E. I. DuPont De Nemours Co. (1911) 188 Fed. 127, 151, (our italics). "We next turn to ruinous trade wars against competitors which, as we have seen, was one of the features of attempted monopoly denounced by the Supreme Court." Buffington J., in United States v. U. S. Steel Corporation (1915) 223 Fed. 55, 77 (our italics). In Standard Oil Co. v. United States (1911) 221 U. S. 1, 61, Mr. Chief Justice White, referring to the second section of the Sherman Law, said: "Undoubtedly, the words 'to monopolize' and 'monopolize' as used in the section reach every act bringing about the prohibited results" (our italics). Cf., note 45, supra. 94 See appendix. 95 Trade Law, Sec. 11. |