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ganization, openly and flagrantly violated! In the form in which it was finally enthe law ? If this violation cannot be acted, the effect of the Clayton Law is to reached in a criminal proceeding, because confuse and to make uncertain, rather that is barred by the Statute of Limita- | than to supplement the existing laws. Its tions, or in a civil proceeding, because long definitions of offenses are actually equity may enjoin only future violations nothing more than what the Supreme of the law, then we have this company Court. had already held the Anti-Trust continuing its course without molesta Law to mean. Its provision against intion, while the existing law, if enforced terlocking directors is a mere subterfuge, against those who desire to organize sim | and does not meet the real evil at all. Its ilar combinations, will prevent the or- so-called "personal guilt" provision narganization of combinations large enough rows the provision of the Federal Crimto cope with this giant corporation in the | inal Code, and makes the prosecution of fields of trade. In other words, in its officers of an offending corporation more practical execution the Anti-Trust Law | difficult than was the case under the old becomes a law for the protection of those law. And to cap the climax, a general great combinations which were not inter amnesty was granted to the Standard Oil fered with at the time of, or shortly after, Company and other offending corporatheir organization.

tions for violations of existing injunctions The New Clayton Act-We come now by a provision limiting contempt proceedto the recent anti-trust legislation, the Inter ings to one year from the date of the act state Trade Commerce Law and the Clayton

complained of. Law. The result of the failures of the crim

Take § 2 of the act, which is directed inal suits and of the dissatisfaction with the

| against discriminations in price. The decrees in the Standard Oil and the Tobacco first part of the section is a mere reaffirmcases and of the obvious fact that the opera ance of the meaning of the Anti-Trust tions of these great combinations have Law as declared by the Supreme Court; not been apparently affected by the gov that is to say, a discrimination in prices ernment litigation, was a demand for the between different purchasers is lawful, strengthening of the Anti-Trust Law. | where the effect of the discrimination is Political platforms were filled with de to substantially lessen competition, or to mands that drastic criminal provisions

create a monopoly. The proviso, how

create a monopol must be inserted in the law, and that ever, contains language calculated to lend strenuous steps must be taken to curb the 1 aid and comfort to those who are seeking growth of monopoly. Many bills were intro- to devise ways in which to evade the law. duced in both the House and Senate. There | The language was very skillfully and were long hearings before committees. adroitly framed. It is provided that nothThe Clayton Bill, as it was originally in ing contained in the section shall prevent introduced in both the House and Senate. discrimination in price between purchasvisions, as well as other provisions which ers of commodities on account of differit was claimed were designed to make the ences in grade, quality or quantity of the operation of the Anti-Trust Law more commodity sold, or that makes only uneffective. It would be interesting to trace due allowance for difference in the cost the proceedings in Congress with refer of selling or transportation, or discrimence to this legislation, and to show how ination in price in the same or different the bill was gradually transformed from communities, made in good faith to meet its orignial state to the one which was competition. finally agreed on by the Conference Com Here the intent of the seller is made mittee of the House and the Senate. such an ingredient of the offense that in

practical operation it will be extremely cases which would otherwise fall within difficult to show a violation. The effect the rule in the Northern Securities Comof this new section, therefore, will be to pany case out of the rule. The provision weaken what had already been accom- is useless unless designed for that purplished through the decisions of the Su-1 pose. The most favorable thing which preme Court under the old law.

can be said about it is that it makes conSection 3 of the act is the one whichfused and uncertain that which before the makes it unlawful to make leases, sales enactment of the Clayton Law was enor contracts, or to fix a price on the con tirely clear. dition that the lessee or purchaser shall The same thing may be said as to the not use or deal in the commodities of a last clause of $ 7, which presents a comcompetitor, where the effect of the trans bination of language, the untangling of actions is to lessen competition or create which will keep the courts busy for ten a monopoly. It is merely a restatement years, if this law is permitted to remain of what the Supreme Court had declared on the statute books. This provision is : the old law to mean in the Bauers, the | “Nothing contained in this section shall Creamery Packing Company,' and the

be held to affect or impair any right hereStandard Sanitary Co. cases.10

tofore legally acquired : Provided, that

nothing contained in this section shall be Take § 7 of the act, which prohibits the

held or construed to authorize or make acquisition by a corporation of stock of lawful anything hertofore prohibited or another corporation, where the effect of made illegal by the Anti-Trust Law, nor the acquisition is to lessen competition or

to exempt any person from the penal pro

vision thereof, or the civil remedies therein to restrain commerce or to create a mon

provided.” opoly. This section states nothing new. It will be interesting to see just what In the Northern Securities Company use the United States Steel Company and case, 11 Reading Railroad Company case,12 other corporations which involve an Union Pacific Ry. Co. case,13 and other amalgamation of a large number of subcases, the Supreme Court had applied the ordinate corporations will attempt to existing law so as to leave no doubt as make of this provision, and the interpreto its meaning on this subject. After the tation which they will attempt to have general definition of the offense, however, placed on the word “legal,” having in follow some provisions whose only effect mind that the Supreme Court in mary can be to confuse the law as already es- cases, the Bellingham Bay Boom case, 14 tablished. We find this provision: for example, has declared that the term

“This section shall not apply to corpora “legal or authorized by law,” when used tions purchasing such stock solely for in

in such a statute, means authorized by vestment and not using the same by voting or otherwise to bring about, or in attempt

either the state or the federal governing to bring about the substantial lessening ment. of competition.”

I have already referred to § 14, the This deals with the situation involved

"personal guilt" section, which it was asin the Northern Securities Company case,

serted would bring to justice the indiviil. and is an apparent attempt to introduce

ual who was responsible for violation of into offenses of this nature the element of

the law. intent, which might be invoked to take

Now, the courts have held repeatedly

that individuals could be prosecuted for (8) 229 U. S. 1. (9) 227 U, S. 32.

violating the old Anti-Trust Law, and (10) 226 U. S. 49.

§ 332 of the Federal Criminal Code pro(11) 197 U. S. 224. (12) 226 U. S. 324. (13) 226 U. S. 61.

(14) 176 U. S. 211.

vides that “whoever directly commits any | tainty, and not to strengthen the existing act constituting an offense defined in any law. law of the United States, or who aids, | The Trade Commission Law—The same abets, counsels, commands, induces or thing is true, for the most part, of the Trade procures its commission, is a principal." Commission Law. The Trade Commission This § 14, which, of course, takes the

is given certain power of investigation, posplace of the general provision of the law

sessed by the Commissioner of Corporations on the subject, provides that an officer or

before the enactment of the law. It is agent of the corporation shall be prose

authorized to act as an adviser and assistant cuted if he "shall have authorized, order

to the Attorney-General in the performance ed or done any acts, constituting in whole

of his duties, and is a kind of master-inor in part such violation.” The differ

chancery in drafting decrees when called ence, of course, is apparent. Under this

upon by the court to do so. It is also wonderful “personal guilt" section, it is

given power to institute hearings and necessary to prove that the officer or

enter orders against unfair methods of agent of the corporation authorized, or

competition, and against violations of dered, or did some act which constituted

$$ 2, 3, 7 and 8 of the Clayton Act. Just a part of the violation. It is sufficient to

what is meant by “unfair competition" say that under the language of this sec

does not appear from the act. In view tion, a successful prosecution of the pres

of the provisions of the Clayton Law, ident or any important officer of any great

which are to read in pari materia with the corporation is a practical impossibility.

Trade Commission Law, there is a serious Perhaps the most peculiar provision in

question whether or not the power of the the act is the one relating to interlocking

Commission is not limited to the specific directors. Now, everybody knows that

offenses enumerated in $$ 2, 3, 7 and 8 of large stockholders of great corporations

the Clayton Law. Moreover, the term frequently do not sit on the board them

“unfair competition” has been defined reselves. They have their representatives;

peatedly by the Supreme Court, and the and this provision, as it stands, is about

definition is limited to those dishonest as effective as to provide that a man may

trade practices by which a merchant or not deliver a letter in person, but is to be

manufacturer attempts improperly to left perfectly free to send it by messenger.

palm off his own goods as those of a comAlready the offices on Wall Street which

petitor. If we give to the term the definihave to do with the affairs of large cor

tion already given to it by the Supreme porations, are putting in training profes

Court, and add the things included in the sional directors so that the technicality

Clayton Law, the power given to the of the law may be observed.

Commission is only a small fragment of

that which a commission should have in Even those portions of the act which

order to accomplish any really effective are declared to give enlarged rights to

results. In fact, the Commission is not labor are mere pieces of juggling with

given the power to do the only thing as words. They merely reaffirm the existing

to which a commission of this kind would law, as it had been declared repeatedly by

be of real service, namely: the power to the federal courts prior to the enactment

act upon a plan of business conduct subof the statute.

mitted by a corporation or a combination With the exception of the provision giv of corporations, and to determine whether ing to private parties who are injured the or not that plan is in violation of the law, right to maintain suit, the effect of the and whether or not the corporation or law is to produce confusion and uncer- ' combination of corporations is to be per

mitted to engage in interstate commerce. combinations; they have produced some

Clayton and Trade Commission Laws paper changes in stock ownership, but the Tentative—The fact about this recent anti real control and the real monopoly retrust legislation is that Congress really start mains the same as it was before the instied out with an honest intent to make an tution of the suits. In their practical efeffort to improve the law. Then followed fect, they may prove in the end to be a a period of business depression, culminat-positive menace. Existing combinations, ing in the financial disturbance arising such as the United States Steel Corporafrom the war in Europe. Not having the tion, may be held, as I have said, to be courage to pass up the whole subject within the law. New combinations to until the time was appropriate for effec- | meet these great organizations of capital tive legislation, Congress enacted these in the field of industry may be prevented two laws, which for a long time to come by the existing law, and the net result will be held up as conspicuous examples will be that the enforcement of the law of hypocritical and ineffective legislation. will be a protection and an aid to existing

It is perhaps just as well, however, that monopolies. the original intention of Congress was Another thing which we have learned is not carried out, because it has become that, while monopoly should be guarded quite apparent that the next step in the against, there should be at the same time federal control of corporations must be a definite method whereby it may be dein a difierent direction. The experience termined in advance whether or not a corof the last ten years has demonstrated poration, if it acts within its charter powcertain things. The first of these is that ers, is within the law, and whereby the an attempt to regulate the operations of | corporation, if it acts in defiance of the great corporations through criminal pros | law, may be excluded from interstate ecutions is futile. The magnitude and commerce. complexity of the business involved, the Federal Incorporation Law for Indusinevitable lack of impartiality in the en tries—It appears to me that a review of forcement of the law, the subteranean in- | what has been really accomplished or not Auence always at work in furthering one accomplished in dealing with these great set of prosecutions and in hindering an corporations through the present cumberother, are elements which cannot be elim- some and ineffective methods, shows inated from the situation. There is no clearly that there is but one way of hanreason to believe that the more drastic |dling this question satisfactorily, and that criminal laws which are advocated by is through the instrumentality of a fedsome will be enforced more successfully eral incorporation law. Under such a than has the existing law.

law, corporations large enough to control Prosecutions Unfruitful in Result-An any substantial part of interstate comother thing which we have learned is merce can be required to operate under a that the dissolution suits instituted long federal charter, or, in any event, under a after the unlawful acts had been com federal license. If it is deemed advisable mitted are inadequate in their results. to place any limitations on the size of corThe most that can be said for these suits | porations, this can be done in definite and is that they have checked the tendency concrete terms, and not be left to the untoward a concentration of industry which certain speculations of a commission or might have gone on otherwise to greater of the courts. lengths, if these suits had not been insti- Under such a law, a corporation, in tuted when they were. The suits have order to be permitted to engage in internot broken up the operations of the old state commerce, can be compelled to com

ply with rigid requirements as to its cap- channels of interstate trade, and its charitalization. Stocks and bonds will be ter forfeited. made to represent real property value, | Of course, it would be presumptuous and through a system of inspection sim- for anyone to attempt to outline in detail ilar to that which is applied to national the provisions of such a law. The point banks, the confidence of the people in the which it has been my purpose to emphastocks and bonds of these industrial cor- size is that in dealing with this problem porations can be created. There will then of the control of industrial corporations, be an incentive for the man working ior we have thus far failed, that this failure a corporation to invest his money in the is a menace to the industrial peace of the stock of the company for which he works nation, and that the situation demands instead of depositing it in a savings bank. | the exercise of the federal authority in the There will then be represented in these creation and control of the great corporacorporations that diversity of property in tions which are to carry on the commerce terest which is the only condition upon of the nation. We have failed in attempt. which, under our fundamental economic ing to deal with the question indirectly. law, they can remain a permanent part of | We must assume direct control. our institutions.

I firmly believe that unless this situaSuch a law can deal with the one thing, tion is met speedily and effectually we which, more than all the rest, is responsible | will find ourselves confronted, in a very for the dangerous monopolies in this coun short time, by a movement toward socialtry. It can place a limitation on the amount | ism which will threaten our whole indusof stock which one individual may own in trial system. any one corporation, and can place restric

JAMES H. WILKERSON. tions on the ownership of stock by the same Chicago, Ill. individual in competing corporations in the same line of business.

Representation of Employes by Directors -Such a law can make a provision for

ELECTRICITY-NEGLIGENCE. representation on the part of the em

ADAMS v. BULLOCK. ployes of great corporations in the maragement of the affairs of the corporation. | Court of Appeals of New York. Nov. 18, 1919. We speak frequently of the good will of a business, that intangible asset which is

125 N. E. 93. the result of fair and honest dealing. The

Where trolley wire of defendant traction comrelation of the employes of a corporationi pany running under bridge of railroad company

was so placed that no one standing on the to the corporation itself is just as much

bridge or even bending over the parapet could an element which should be considered reach it, held, that defendant was not liable for

injury to a boy who in crossing the bridge in the management of the corporation;

swung a wire about eight feet long, bringing it and the time is bound to come, if these in contact with the trolley wire. aggregations of wealth are permitted to

CARDOZO, J. The defendant runs a trolley exist, when not only the money invested

line in the city of Dunkirk, employing the overin the business will have representation head wire system. At one point the road is on the board of directors, but the men crossed by a bridge or culvert which carries who do the work of the corporation will

the tracks of the Nickle Plate and Pennsyl.

vania railroads. Pedestrians often use the be represented also.

bridge as a short cut between streets, and chilUnder such a law, a corporation acting

dren play on it. On April 21, 1916, the plaintiff, in restraint of trade in excess of its char- |

a boy of 12 years, came across the bridge, ter powers can be excluded from the swinging a wire about eight feet long. In

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