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still farther shorn of claws by the omission of the penalty. In its final form the section (8 of the antitrust act) applies only to large corporations and only in cases where the elimination of competition by agreement between them would be unlawful. No person, it declares, shall, after two years from the passage of the act, be a director in any two or more corporations, any one of which has capital, surplus and undivided profits aggregating more than one million dollars, if such corporations have been theretofore competitors " so that the elimination of competition by agreement between them would constitute a violation of any of the provisions of any of the anti-trust laws.” Nothing is said about community of officers or employees other than directors. Banks and common carriers are exempted from this general provision; but there are special provisions regarding banks.

If the fact that two or more corporations had common directors did actually result in restraint of competition,

not merely between the corporations concerned but in the trade generally, the courts could and probably would have held it unlawful under the Sherman act. In several decisions in which combinations based on intercorporate stock ownership have been dissolved, the courts have prohibited the segregated parts from having common officers or directors. The new act, however, goes farther and prohibits corporations from having the same directors even tho they do as a matter of fact actively compete, provided only that an agreement between the corporations to eliminate competition would be unlawful. In effect it makes the interlocking of directors in such case conclusive evidence of combination to restrain trade. Perhaps on the whole this

is wise, for there is at least some tendency to eliminate competition where even a single individual is a director in two or more potentially competitive corporations.

The importance of this legislation, however, has been greatly exaggerated by its sponsors. The real evil is not community of directors but community of stock ownership. It will be easy enough for an individual or group who hold stock in several corporations to elect different men as directors who will act in harmony. The director is but the voice of those who elect him. Dummy directors are no new thing and they will doubtless be more numerous under this act than at present.

Apparently no one seriously proposed in Congress to restrict community of stock ownership by individuals. As I have pointed out elsewhere, the courts have expressly tolerated community of interest in cases where it was almost self-evident that the result must be to prevent competition. They have seemed to consider it an inalienable right of the individual to hold what stocks he pleases. The “dissolution" of trusts by distributing the stocks of subsidiary companies pro rata among the stockholders of a controlling company is an economic absurdity. The investigations of the Pujo committee emphasized the enormous extent and influence of community of stock interest as well as of interlocking directorates. But Congress seemed to be of the same mind as the courts with respect to the impossibility, or the unconstitutionality, of attempting to check the former. Some day our law makers will grow bolder; they will not permit any supposed right of private property to serve as a bulwark for monopoly.

1 Pages 35 ff.

The special provisions regarding interlocking directorates of banks, as passed by the House, were struck out by the Senate on the ground that the matter could best be provided for in connection with the banking laws. These provisions were, however, restored, with some modifications, by the conference committee and enacted into law. They prohibit interlocking of directors, officers or employees among large banks, those having deposits, capital, surplus and undivided profits aggregating more than five million dollars, wherever located. Moreover, subject to minor exceptions, no two banks, of whatever size, in a city of more than 200,000 inhabitants may have a common director, officer or employee. Naturally Congress has not undertaken to regulate private banks or those organized under state laws, but the act does apply to relations between a national bank on the one hand and a private or state bank on the other.

This provision as to banks is not qualified by any reference to the effect of the interlocking. It is not on its face directed against monopoly or restraint of competition among banks or in other business. stitutionality of this provision cannot be questioned, since the national banks are creatures of the federal government. As to its justice and propriety there may be some doubt, and as to its effectiveness, for the reasons

lready mentioned above, still more doubt. The investigations of the Pujo committee have indeed made clear the immense power of concentrated banking interests. If that power can be weakened by this new legislation, most people will welcome it, even tho the law may incidentally prevent interlocking directorates among banks where no disadvantages would result therefrom.

The con

It may be noted that there are no direct penalties for violation of the provisions as to intercorporate stockholding and interlocking directorates. The enforcement, except in the case of banks, rests with the Federal Trade Commission by a procedure similar to that in the case of unfair competitive methods.

While, as already indicated, a good many teeth were drawn from the anti-trust bill during its progress through Congress, there remains one provision which distinctly increases the terrors of the law. Section 14 of the new act provides that whenever a corporation shall violate any of the penal provisions of any of the anti-trust laws, such violation shall be deemed to be also that of the individual directors, officers or agents who have authorized, ordered or done any of the acts constituting such violation. Upon conviction therefor any such director, officer or agent is subject to fine not exceeding $5000 or imprisonment not exceeding one

year or both.

As is well known, practically no imprisonments have heretofore resulted from the enforcement of the antitrust laws. Most of the fines in criminal cases under them have been assessed against corporations. It is true that individuals could be punished for conspiracy under the Sherman act; but this new section will probably make it somewhat easier to punish them. There is no immediate likelihood, however, that the prisons will be overcrowded with trust offenders.

The anti-trust, act provides (§ 4) that any person injured in business or property by reason of the doing of anything forbidden in the anti-trust laws may sue and recover three-fold damages. This merely extends the similar provision of the Sherman act so as to cover all anti-trust laws including the new act itself.

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