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The Clayton Law which was approved October 15, 1914, is further entitled: "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes." The provisions of the law that apply to Trusts may be summarized as follows:

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It shall be unlawful for any person to discriminate in price between different purchasers of commodities, except where such discrimination merely allows for differences in quality, in quantity sold, or in selling and transportation costs, or is made in good faith to meet competition (sec. 2).

No corporation shall acquire the whole or part of the stock or other share capital of any other corporation "where the effect of such acquisition may be to substantially lessen competition" between the two corporations, "or to restrain such commerce in any section or community," or tend to create a monopoly. This shall not prevent corporations from holding such stock simply for investment, its voting power not being used to lessen competition, or from forming legitimate subsidiary corporations (sec. 7).

After two years from the approval of this Act, no person shall at the same time be a director or employee of more than one bank or trust company which has deposits, capital, surplus, and undivided profits aggregating more than $5,000,000; and no person at the same time shall be a director in any two or more corporations engaged in commerce, any one of which has capital, surplus, and undivided profits aggregating more than $1,000,000 (sec. 8).

After two years from the approval of this Act, no common carrier shall deal in the securities or supplies, *See Appendix F-10. Act of October 15, 1914.

or make any construction or maintenance contracts to the amount of more than $50,000 in any one year, with any other corporation, when the common carrier has as one of its officials, or its agent in the particular transaction, any person who is an officer or agent or has a substantial interest in the corporation with which the business is done unless the contract is awarded through competitive bidding, under the rules of the Interstate Commerce Commission (sec. 10).

Any person who shall be injured in his business or property by reason of anything forbidden in the anti-trust laws may sue in a district court of the United States, and may recover threefold the damages sustained by him, and the cost of the suit (sec. 4).

A decree rendered against the defendant in a suit brought by the United States under the anti-trust laws shall be prima facie evidence in any suit brought by any other party against the defendant; and the statute of limitations shall not run against any private right of action under the anti-trust laws during the pendency of a Federal suit under these laws based in whole or in part upon any matter essential to the private suit (sec. 5).

Whenever a corporation violates any of the penal provisions of the anti-trust laws, such violation_shall be deemed to be that of the individual directors, officers, or agents who have authorized or done the violating acts, under penalty of fine up to $5,000, and imprisonment up to one year, or both (sec. 14).

Any person shall be entitled to sue in a Federal court for injunctive relief against threatened immediate and irreparable loss or damage by a violation of the antitrust laws (sec. 16).


No injunction shall be granted by Federal judges in labor dispute, unless necessary to prevent irreparable injury to property; and no injunction shall prohibit any person from quitting work, or from peacefully

advising or persuading others to quit. No injunction shall forbid any person to cease to patronize or to employ any party to a labor dispute, or by peaceful and lawful means to recommend, advise, or persuade others so to do. No injunction shall forbid persons to assemble peaceably in a lawful manner, and for lawful purposes, or from doing anything which might lawfully be done in the absence of the dispute, by any party to the dispute (sec. 20).

In general as to anti-trust legislation, it is obvious that these two acts of 1914 write into law of the land the 1912 platform pledges of the Democratic party. The Clayton Law prohibits specifically new holding company operations, interlocking directorates and price discriminations, while the Federal Trade Commission Act declares unfair methods of competition to be unlawful. The whole tenor of both acts is toward preventing control of so large a proportion of an industry by any combination that it becomes a menace to competitive conditions. Clearly the anti-monopoly mind of the American people is here expressed in large capitals. The legislation, deliberately passed, after nearly a quarter of a century of discussion concerning the Sherman Act, and of interpretation and enforcement of that act, registers the fact that majority opinion in America at the present time not only is not desirous of yielding its anti-monopoly tradition, but that it believes very definitely, in terms of the Democratic platforms of 1912, that legislation should be passed "which will restore to the Statute (the Sherman Law) the strength of which it has been deprived" (by judicial construc

The key section which emphasizes the anti-monopoly spirit is Section 7 of the Clayton Act: "That no corporation engaged in commerce shall acquire, directly or indirectly, the whole or part of the stock or other share capital of another corporation also engaged in commerce where the effect of such acquisition may be to substantially lessen competition between the corporation whose stock is so acquired and the corporation making the acquisition, or to restrain such commerce in any section or community, or tend to create a monopoly of any line of commerce." This excerpt from that section records the extreme legislation against corporate combination. No horizontal combination, big or little, is possible under this act for it is inconceivable that one of two competitors should acquire the other's stock and yet not disturb the competition between them. Strict construction of this Section 7 would prevent any further corporate combinations in the United States. It was an act of grace that closed the section with the saving clause that "nothing contained in this section shall be held to affect or impair any right heretofore legally acquired." This seems to say that such Trusts as have before September-October, 1914, succeeded in getting past the previous anti-trust barriers are to be tolerated as they are, but this act creates a stone wall barrier to stop them from any further combination growth and to prevent altogether the advance of any new combinations. It will be interesting to observe once more the penetrability of an impenetrable legislative wall if the evolutionary strength of the combination movement in the United States is not yet spent.

Sections 6 and 20 of the Clayton Act make of it an

American Magna Charta for organized labor in the thought of labor leaders. Section 6 exempts labor, agricultural, and horticultural organizations from being "held or construed to be illegal combinations or conspiracies in restraint of trade, under the anti-trust laws." Section 20 apparently sets limits to the use of the injunction against labor organizations. The frequent salting of the phraseology of the latter section with such ambiguous terms as "peaceful," "peaceably," "peacefully," "lawfully," "lawful means," "lawful manner" and "lawful purposes" raises question in the mind of the lay reader whether the limits set are not far more apparent than real. None the less organized labor sees its will written into an anti-trust statute of 1914 in clear contrast to the defeat of the proposed amendment similar to Section 6 of the Clayton Act during the original debates on the Sherman Act.

A sound program for national treatment of Trusts can be outlined from the viewpoint of economics. In many industrial lines cost-cheapening is an outcome of combination. No one can say what is the perfect costcheapening size for the productive unit in any given industry.

Conditions should be made right for careful experiment to learn this size, for so far speculative promotions and predatory modes of competition have all too often fogged the experiment. Law and administration, rightly to condition this experiment, must be national in scope, for the producing units are coming to be nation-wide, even world-wide, industrial combinations. There must be maintained a fair and open field for

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