Soo a

RIOR

 
HD
219G
E53

 

Cornell Mniversity Library

THE GIFT OF

Notaana Arsociottion of Nomwjodtinns

 

 

 

BRO CBG estes 22 |e) 15...

7583

 
Cornell University Library

HD2778 .E53

ini

olin
A Handbook

of

The Federal Trade

Commission Act

A Review of Its Legislative History
and

of the Powers, Duties and Procedure of the Commission

PREPARED FOR THE
NATIONAL ASSOCIATION OF MANUFACTURERS

By

JAMES A. EMERY

General Counsel of National Council for Industrial Defense

1915

ISSUED FROM THE
SECRETARY’S OFFICF, 30 CHURCH STREET, NEW YORK CITY
&
N \ 07
:
A301 gg

Copyright, 1915
By JAMES A. EMERY
gS GRE SG BERS BERL ee OER RSG? BBLS) SAS ST eR aS A eee eee xopul [etouer)

TG, Siete Sori py HURL uos[iay L£2-E2 SUOT}IIS
Suipueme ‘zt Areniqaq jo wy Jo gs-EZ SUOI}IOS

(Ge? Re ena gee PV HueL wos fo Z/-Ef SUONIS

ge Re SS ere py ueUIEYS eq

Or oh a ee ED RS OEE EH OE BS py uojAeyD 01 Xopuy

+e tha he 8 ak. en a BI EE A CR DRESS ASD py wove ub

SON enna sara ets JOY UOISSIUMUOT spe, OF XOPUT

ps He Seen ee JY vOIssMUOT apeIy, UL

:quemaddns
Sip, Mines Se Meee Gees SUOTSIA

-Olg yeusg ‘“AyunuUy ‘Marae Jno) ‘einpes01g.

“AT teadeyD

Bile “Saree ea UOISSILULUOT) 9Y} FO Satjnq pue sIaMog
TIT Jaideyd
IL ‘000 CUOISSTUILUIOT d1[} JO PUUOSIag puv UWOrezIUesIO
‘TT toideya
G ttt PW UOISSIUIMIOD apeIT sy} JO AIO}SIFT 2aTAeISTs97T
‘T taydeyy
potters nee nee nese quowayeys Areurumyerg
vg

$yU9}U0%)
Preliminary Statement

The purpose of this review is not to indulge in speculative legal
opinions respecting the probable construction of the Trade Com-
mission Act or its validity in whole or part, but to assemble in
convenient form for our members material information relating
to and explaining the Act. I shall therefore endeavor to condense
within as brief a compass as the subject permits, its legislative
history, an outline of the organization and personnel of the
Trade Commission, and a digest and resumé of its apparent
powers, duties and procedure. While the subject necessarily
deals with legal terms and matters, it is primarily treated for the
information of the lay reader, and I shall endeavor to avoid the
use of technical language. For brevity and convenient reference,
I have prefaced consideration of each topic, where possible, with
a synopsis of the matters to which it relates.

Since, for the further benefit of its members, it is the intention
of the National Association of Manufacturers to follow the
operations of the Trade Commission, as that body progressively
interprets its own powers and duties and courts review the same,
I have called special attention to the important features of the
Act which developed the greatest differences of opinion during
its legislative consideration.

For reference, there is attached to this statement:

(a) A copy of the Trade Commission Act.

(b) <A copy of the Clayton Act.

(c) A copy of the Sherman Act.

(d) Sections 73-77 of Wilson Tariff Act.

(e) Sections 73-76 of Act of February 12, 1913, amending
Sections 73-77, Wilson Tariff Act.

(f) A general index of this Digest, also indexes to Trade
Commission and Clayton Acts.

(g) <A diagram outlining powers and procedure of Federal
Trade Commission.

JAMES A. EMERY.
May, 1915.
The Federal Trade Commission Act

CHAPTER I
The Legislative History of the Trade Commission Act

Par. 1. The essential features relating to the enactment of the
Trade Commission Act (1914) are summarized in the following
chronology :

Ix THE House

(a). Jan. 20—The President, in a message, recommends the
creation of an Interstate Trade Commission.

(b) Jan. 22—H. R. 12120, by Mr. Clayton, and S. 4160, by
Mr. Newlands, identical measures providing for the creation of
a “Federal Trade Commission,” introduced and referred to the
respective Committees on Interstate and Foreign Commerce of
the House and Senate.

(c) Mar. 14—H. R. 14631, introduced by Mr. Covington,
creating an “Interstate Trade Commission,” referred to the Com-
mittee on Interstate Commerce.

(d) Apr. 13—H. R. 15613, introduced by Mr. Covington,
creating an “Interstate Trade Commission,” referred to the Com-
mittee on Interstate Commerce.

(e) Apr. 14H. R. 15613 reported favorably to the House
from Committee on Interstate Commerce.

(f) May 19—Rule reported from Committee on Rules and
adopted by House providing for immediate consideration of H.
R. 15613 and six hours’ debate thereon, the measure to be then
laid aside until the consideration of other ‘anti-trust’? measures
is concluded. Debate on bill opens.

(g) May 20—Debate continues.

(h) May 21—Debate continues.

(7) May 22—Mr. Stevens, of New Hampshire, proposes a

substitute for Section 11, providing
that unfair or oppressive competition in commerce is hereby declared
unlawful. The Commission is empowered and directed to prevent
corporations engaged in commerce from using unfair and oppressive
methods of competition.

Amendment declared out of order. Debate concluded.

5
(7) June 5—Bill passed as reported by Committee April 14,
except for slight amendment to correct verbal error. No demand
for ayes and noes and no division of House.

IN THE SENATE

Par. 2. (a) June 6—(Legislative day, June 5). H.R.
15613 referred to Committee on Interstate and Foreign Com-
merce. Same Committee reported favorably S. 4160, the “New-
lands” bill, creating a Federal Trade Commission.

(b) June 13—Committee on Interstate and Foreign Com-
merce reports amended “Newlands” bill, S. 4160, as substitute
for bill passed by House, H. R. 15613.

(c) June 25 to August 4—Debate on bill continues. A num-
ber of amendments subsequently referred to adopted.

(d) Aug. 5—Amended Trade Commission Bill passed; ayes
53, noes 16, 27 not voting.

In CONFERENCE

Par. 3. (a) Aug. 7—House diagrees to Senate amend-
ments. Senate agrees to conference. Senate conferees: New-
lands, Pomerene, Salisbury, Clapp and Cummins; House con-
ferees: Adamson, Sims, Covington, Stevens, of Minnesota, and
Esch.

(b) Sept. 4—Conference report submitted to House and Sen-
ate.

(c) Sept. 8—Senate agrees to conference report; 43 ayes, 5
noes, 48 not voting.

(d) Sept. 10—House agrees to conference report, motion for
aye and no vote by Mr. Bathrick not receiving: second.

(e) Sept. 26—Bill approved by President.

Par. 4. The Trade Commission is an administrative body
intended to aid in the practical enforcement of the anti-trust acts.
To this end it is to gather, compile and publish information
respecting the operation of corporations engaged in interstate
commerce, investigate alleged violations of the anti-trust laws,
upon judicial request suggest the form of final decrees in anti-
trust suits, and, on its own initiative or the application of the
Attorney-General, inquire into the practical operation of such
decrees. It may, also, upon his request, investigate and advise
him respecting methods by which corporations alleged to be vio-
lating the anti-trust acts may readjust their operations to the law.
It is to study trade conditions with foreign countries and make

6
recommendations to Congress and the Executive. In addition to
these numerous duties, it is presumed to stop in their incipiency
tendencies toward monopoly and undue restraint of trade, by
preventing, through the issuance of administrative orders, acts
constituting what are termed “unfair methods of competition.”

Par. 5. The Commission, thus empowered, is quite different
from the Commission originally proposed or that provided in the
measure which passed the House on June 5. A brief resumé of
the legislative changes from the first proposal to the ultimate law
may greatly assist in understanding the character and purpose of
the act.

Par. 6. On January 20, the President, in a message to Con-
gress, recommended the creation of an “Interstate Trade Commis-
sion.” Business men, he thought, desired ‘‘the advice, the definite
guidance and information” which it could support. He believed

the opinion of the country demanded it

“only as an indispensable instrument of information and publicity,
as a clearing house for the facts by which both the public mind and
the managers of great business undertakings should be guided, and
as an instrumentality for doing justice to business where the processes
of the courts or the natural forces of correction outside the courts
are inadequate to adjust the remedy to the wrong in a way that will
meet all the equities and circumstances of the case.”

Par. 7. Two days later, in publicly declared consonance with
this recommendation, identical proposals were persented in the
House by Mr. Clayton, H. R. 12120, and in the Senate by Mr.
Newlands, S. 4160. They were referred to the appropriate Com-
mittees and hearings held thereon.

Par. 8. On April 13, H. R. 15613 was introduced by Mr.
Covington, referred to the Committee on Interstate Commerce
of the House and favorably reported therefrom on the following
day. Under a rule limiting debate to six hours, it was discussed
in the House from May 19 to 22, and, save for a slight verbal
correction, passed without amendment and without a dissenting
vote, on June 5.

Par. 9. As will subsequently be seen, the House bill differed
in important particulars from the measure which later passed the
Senate. It is sufficient here to call attention to this fact.

Par. 10. In the Senate, on June 6, the Interstate Commerce
Committee of that body favorably reported the “Newlands” bill,
S. 4160. On the same day the bill passed by the House reached
the Senate and was referred to that Committee. On June 13,

f
the Senate Committee on Interstate Commerce reported as a
substitute for the House bill a further amended form of the
“Newlands” bill.

Par. 11. This substitute was chiefly notable for the new
proposal contained in Section 5, which provided “that unfair
competition in commerce is hereby declared unlawful,” and
directed the Commission to prevent “corporations” from using
“unfair methods” of competition in commerce. About this
important change centered the chief debate in the Senate, and
around the ultimate form which this idea assumes in the law
may be clustered the chief duties and difficulties of the Commis-
sion. It is therefore important to note that the germ of this
proposal is found in the 9th and roth sections of a bill proposed
by Mr. Stevens, of New Hampshire, which found no favor with
the House Committee on Interstate Commerce. During the
course of the House debate, Mr. Stevens offered his rejected
proposal as an amendment to the pending bill. It declared
“unfair or oppressive competition” in commerce to be unlawful
and empowered and directed the Commission to prevent such
methods through administrative orders enforcible by the district
courts.

Par. 12. On point of order by Mr. Bartlett, the amendment
was held out of order. The subsequent debate discloses that
those in charge of the House bill opposed the proposal, doubting
its validity, and that its proponents confidently prophesied that
it would become a part of the measure in the Senate.

Par. 13. With but slight verbal changes, the proposal of Mr.
Stevens was incorporated in the bill reported to the Senate on
June 13, constituting its 5th section. The history of its attach-
ment to the Newlands bill in the Committee on Interstate Com-
merce was thus given by Senator Brandegee, a member of that
committee, in the Senate, July 28, in response to an inquiry from
Senator Colt, and the accuracy of the statement was not chal-
lenged. Mr. Brandegee said:

Mr. President, I take it upon myself to say that no such provision
as that was in the bill which the Senator who is the chairman of the
Interstate Commerce Committee himself introduced.

No such provision as that was in the bill which our committee
reported to the Senate. The provision is a part of the bill known in
the House as the Stevens bill. Without any hearing whatsoever
before the Committee on Interstate Commerce it was taken by one
of the members, after the bill had been completed by the committee
and it was ready to report, and was engrafted upon this bill, with
not one single witness having testified before the committee in relation

8
to it. The discussion upon it in the Senate Committee on Interstate
Commerce did not consume twenty minutes. The yeas and nays were
called, and it was voted right on. This is the history of section 5.

Par. 14. Throughout the Senate debate, which continued
from June 25 to August 5, this section remained the center of
discussion. The character of the proposed court review, the
competency of the Commission to act as a master in chancery,
and, upon request, advise courts as to the form of their decrees
in anti-trust prosecutions, ,and the inquisitorial powers of the
Commission were leading topics for sharp disagreement, but the
form and matter contained in Section 5 was the storm-centre of
debate.

Par. 15.° This condition was intensified by the fact that on
June 5 the House had passed the Clayton bill, four sections of
which denounced four practices alleged to prevent competition.
These were: price discriminations between purchasers ; exclusive
tying contracts between sellers and buyers or lessors and lessees ;
inter-locking directorates, and inter-corporate shareholding by
competing corporations, each of which practices was prohibited
under penalty of fine and imprisonment. On July 22 this meas-
ure was reported to the Senate by its Judiciary Committee, with
the penal clauses struck out of these four sections, and the sec-
tions committed to the Trade Commission for enforcement
through administrative orders in the manner generally provided
in Section 5 of the Trade Commission Bill. Thus the Clayton
bill became complementary to the Trade Commission Bill.

Par. 16. Ir. Cummins endeavored to incorporate in the
Trade Commission bill a prohibition against competing corpora-
tions “holding” as well as “acquiring” stock in each other, but
failed. On August 1, a substitute which he proposed for Section
5 was adopted, providing what is commonly known as a “narrow”
as distinguished from a “broad” court review of the Commis-
sion’s orders, and directing the Commission to prevent “unfair
competition” instead of “unfair methods of competition.”

Par. 17. Senatorial critics declared the term ‘‘unfair compe-
tition” to be, either: confined to those cases where a competitor
fraudulently passed off his goods and business for those of
another by false misrepresentations, which was asserted to be
the exact meaning attached to the term at common law; or, it
was said, the term afforded no definite guide by which the citizen
would know what was forbidden or any primary standard for the
Commission which would thus be forced to resort to the varying
standard of its own judgment. The proponents of the measure

9
declared the term to be as definite and capable of enforcement
as the terms “restraint of trade” or ‘‘reasonable rate,” or “unjust
discrimination.” Five amendments proposing a fixed definition
of “unfair competition” were at various times offered, and one
by Mr. Reed failed of adoption on August 4 by but two votes.

Par. 18. An amendment offered by Mr. Lippitt, and which
received considerable support, but was defeated, proposed prac-
tical advisory powers for the Commission of wide character. It
amended Section 5 by providing that parties, any one of whom
was engaged in interstate commerce, might submit to the Com-
mission for its consideration, together with such information as
the Commission desired, any agreement intended to affect such
commerce, and the Commission, after consideration, might issue
a certificate stating whether or not the agreement in their opinion
operated in undue restraint of such commerce or tended to
monopoly. Pending consideration of the agreement, no party
to it was to be criminally prosecuted, and if the opinion of the
Commission was favorable, parties to the agreement were not
to be prosecuted criminally under the anti-trust laws for any
act in execution of it until such agreement had been declared
unlawful by the courts or the Commission had revoked its cer-
tificate. The certificate was to be revokable at any time on notice
and hearing, and not to operate to prevent the prosecution of a
civil suit against the parties to the agreement by the United States,
or any private person.

Par. 19. On August 5, the amended bill passed the Senate
by a vote of 53 to 16, 27 not voting. The House having dis-
agreed to the Senate amendments, the bill passed into conference,
the conferees, as is the custom, having the power to make pro-
posals composing the differences at issue between the two bodies.
On September 4, the conference report was received by the
House and Senate. It was a substantial re-draft of the phra-
seology of the Senate measure, retaining its dominant features.
The House conferees forced a substitution of the term “unfair
methods of competition” for “unfair competition.” The form of
the court review of the commission’s orders was made more defi-
nite and jurisdiction to hear and enforce the same transferred to
the Circuit Court of Appeals. The report was adopted by the
Senate on September 8; by the House on September 10. The
measure received the approval of the Executive September 26,

10
CHAPTER II
Organization and Personnel of the Commission

Par. 20. By sections 1 to 3 of the Act, which are closely
patterned after similar provisions of the Interstate Commerce
Act, the Trade Commission is constituted of five members
appointed by the President with the advice and consent of the
Senate. The term of office will be seven years, that of the first
Commissioners, however, being from three to seven years
respectively.

Par. 21. The Commissioners may engage in no other employ-
ment or business, receive a salary of $10,000 per annum, and are
removable by the President for inefficiency, neglect of duty or
malfeasance in office. Under Subdivision G, Section 6, they may
adopt rules and regulations to carry out the provisions of the act.
With the exception of the Secretary of the Commission, each
Commissioner’s clerk, and the attorneys, experts and examiners,
all employes are subject to the Civil Service.

Par. 22. The Commission supersedes the Bureau of Corpo-
rations and succeeds to its employes, unexpended funds, records,
property and quarters. Exclusive of the salaries of the Commis-
sioners and Secretary, Congress has appropriated for its use,
during the fiscal year 1915, $300,000. While its principal office
is in Washington, it may exercise its powers at any place and
prosecute its inquiries through any of its members or examiners.

Par. 23. On January 22, the President nominated as Com-
missioners: Messrs. Davies, Hurley, Harris, Parry and Rublee.
Adl were confirmed March 2, with the exception of Mr. Rublee,
to whom the President thereafter gave a recess appointment. On
March 16, the Commissioners took the oath of office and formally
organized, electing Mr. Davies chairman. The present “Com-
missioners and their terms of office are as follows:

Par. 24. Joseph E. Davies, lawyer, term seven years, retiring
Commissioner of Corporations.

Par. 25. Edward N. Hurley, manufacturer and banker, term
six years; president of the Hurley Machine Company, and of the
First National Bank of Wheaton, Ill.,and of the Illinois Manu-
facturers’ Association.

11
Par. 26. \Villiam J. Harris, of Georgia, insurance official and
banker, term five years; retiring Director of the Census, and
former President of the Georgia Fire Insurance Company, and
the \Iechanics Bank of Cedartown, Ga.

Par. 27. William H. Parry, of. Washington, journalist and
business man, term four years; President of the Seattle and Lake
Washington Waterway Company, a former president of the City
Council of Seattle, and City Comptroller. He was for a time City
Editor of the Seattle Post-Intelligencer, and Manager of the
Moran Shipbuilding Company.

Par. 28. George Rublee, of New Hampshire, term three
years, lawyer. He was an instructor of the Harvard Law School,
Assistant Counsel of the Atchison, Topeka and Santa Fe Road,
and associated in the general practice of his profession with Mr.
Victor Morawetz, of New York, and was later a member of the
firm of Spooner & Cotton, of that city, of which ex-Senator
Spooner, of Wisconsin, is the senior member.

CHAPTER III

Powers and Duties of the Commission

Par. 29. The subject over which the Commission is to exer-
cise its powers is persons, partnerships or corporations engaged
in commerce, except banks and common carriers.

Par. 30. The term “corporation” includes any company or
association, incorporated or not and with or without share capital,
except partnerships, organized to conduct business for its own
profit or that of its members. In the provisions of the Clayton
Act. committed to the Commission for enforcement, the word
“person” includes both corporations and associations existing
under Federal, state or foreign law, as in the eighth section of
the Sherman Act. The ‘commerce’ to which the act refers is
that between the states and territories of the Union, and does not
embrace trade with the Philippines,.Porto Rico, Guam or the
Canal Zone.

Par. 31. The “anti-trust acts” referred to in the Act include
the Sherman Act, Sections 73 to 77 of the Wilson Tariff Act of
1894, prohibiting and penalizing combinations between importers,
and the amendments to this Act contained in Sections 73 and 76
of the Act of February 12, 1913, and extending its prohibitions to

1?
the acts of an “agent or principal.” “Documentary Evidence”
means all documents, papers and correspondence in existence at
and after the passage of the Trade Commission Act.

Par. 32. There are a number of clerical errors in the final
draft of the Act, one of which, the insertion of a comma after the
word ‘“‘banks,’’ in the second paragraph of Section 5, would, if
the intent of the Act were solely determined by punctuation,
include common carriers under the jurisdiction of the Commis-
sion. Mr. Mann, of Illinois, called the attention of the House
to this error just before the passage of the bill, but it remains
uncorrected.

Par. 33. For the purpose of convenient examination, the
powers and duties of the Commission may be grouped under five
heads: They are semi-judicial, investigatory, advisory, to give
publicity to information, and to establish procedure.

Par. 34. The powers and duties embraced within these gen-
eral divisions may be thus epitomized:

Semi-judicial Powers
1. To prevent unfair methods of competition, which are
declared unlawful in commerce, by issuing administrative orders,
after notice and hearing, which are enforcible through the Circuit
Court of Appeals. (Sec. 5.)

2. By the same means, to prevent the specific unfair methods
of competition forbidden by Sections 2, 3, 7 and 8 of the Clayton
Act, and including price discriminations, exclusive tying con-
tracts, intercorporate stockholding and interlocking directorates
‘between competing corporations. (Clayton Act, Sec. 2, 3, 7. par.
1, 2, 3, 5; Sec. 8, par. 1; Sec. 11.) . :

3. To compel corporations engaged in commerce to permit
evidence. (Sec. 9, par. 1, 2, 3; Sec. 10, par. 1.)

4. To compel and take depositions in any proceeding or inves-
tigation and at any stage of it. (Sec, 3, part. 33 Sec. 9, pars.
1 and 5; Sec. 10.)

Investigatory Powers

Par. 35. 1. To classify corporations. (Sec. 6, par. g.)

2. To gather and compile information respecting the opera-
tions of corporations engaged in commerce and to require annual
or special reports or answers to specific questions, to be made
under oath or not, and supplied within the time fixed by the
Commission. (Sec. 6. pars. a and b; Sec. 10, par. 3.)

13
3. To compel corporations engaged in commerce to permit
Sets

agents of the Commission to. have access to, and make copies of,

their “documentary evidence.” (Sec. 9, par. 1.)

4. To investigate alleged violations of anti-trust acts by any
corporation, upon direction of the President or either House of
Congress. (Sec. 6, par. d.)

5. Upon its own initiative or by direction of the Attorney-
General, to investigate and report the manner in which a final
decree, obtained by the United States to restrain a violation of the
Anti-trust Act, is being carried out. (Sec. 6, par. c.)

6. To investigate trade conditions in foreign countries, inclu-
ing practices affecting the foreign trade of the United States, and
to report to Congress, with recommendations. (Sec. 6, par. /.)

7. To obtain information in the possession of other depart-
ments of the Government relating to corporations under the
jurisdiction of the Commission, and to have the assistance of the
employes of such departments whenever the President shall so
direct. (Sec. 8.)

Advisory Powers

Par. 36. 1. From general or specific information, compiled
to make annual or special reports to Congress, with recommenda-
tions for additional legislation. (Sec. 6, par. f and h.)

2. Upon request of the Attorney-General, to investigate and
recommend a readjustment, in conformity with the law,:of the
operations of any corporation engaged in commerce and alleged
to be violating the anti-trust acts. (Sec. 6, par. e.)

3. Whenever in an,equity suit brought by the Attorney-Gen-
eral under the anti-trust acts, the court, after hearing testimony,
concludes the complaining parties are entitled to relief, the Com-
mission is qualified to have referred to it by the court an inquiry,
for the purpose of ascertaining and reporting an appropriate form
of decree. After such inquiry under such procedure as the court
may prescribe, the court may adopt or reject an advisory sug-
gestion of the Commission. (Sec. 7.)

Power of Publicity

Par. 37. The Commission is specifically authorized to make
public in its discretion:

1. Information obtained in its general investigations, except
“trade secrets and names of customers.” (Sec. 6, par. f.)

14
2. The result of its investigations of the manner in which
final decrees issued by the courts in anti-trust suits are being
carried out. (Sec. 6, par. c.)

3. It may likewise fix the form and manner in which its
reports and decisions shall be published. (Sec. 6, par. f.)

Power to Establish Procedure.

Par. 38. To execute its powers and duties, the Commission
is authorized to make necessary rules and regulations. (Sec. 6,
par. g.) This will not, of course, permit modification of the pro-
cedure prescribed for enforcing Section 5 of this Act, or Sec-
tions 2, 3, 7 and 8 of the Clayton Act committed to the Commis-
sion for enforcement, the procedure for which, fixed in Section
11 of that Act, is identical with that provided in Section 5 of the
Trade Commission Act.

Par. 39. The summary being largely self-explanatory, I
confine further commentary to Section 5.

Par. 40. Asa preliminary, it should be noted that the inves-
tigatory and inquisitorial powers of the Commission are exclu-
sively confined to “corporations” engaged in commerce. That is,
it is the business and records of “corporations” over which the
Commission exercises its visitorial powers, except when it is
taking evidence for the prevention of “unfair methods of com-
petition,” and the specific practices forbidden by the Clayton
Act, the prohibitions of both statutes being aimed at the conduct
of “persons and partnerships” engaged in commerce as well as
corporations.

Par. 41. In this particular, it should be stated, however,
that the decisions are unanimous in holding that Congress has no
different or greater power to regulate a corporation engaged in
commerce than it has under the same conditions to regulate an
individual, a partnership or an association, and it is the “com-
merce’ of the corporation that 8 subject to such regulation and
not the corporation merely because it engages in interstate com-
merce. It is equally true that while the guarantees of the 5th
amendment of the Constitution with respect to compelling self-
incrimination do not apply with equal force to corporations, it
is certain that the 4th amendment provides for corporations the
same protection, against unreasonable searches and seizures, that
it does to an individual.

Par. 42. What ‘are the “unfair methods of competition”
which the Trade Commission is to prevent? Sections 2, 3, 7

15
and 8 of the Clayton Act are, plainly, a partial answer to this
inquiry. These sections, with certain detailed exceptions, forbid:

1. Price discriminations, by “persons,’’ between different
purchasers of commodities where the effect of such discrimina-
tions may be to substantially lessen competition or create monop-
oly in any line of commerce. (Clayton Act, Sec. 1.)

2. Exclusive tying contracts whereby any “person” as a seller
or lessor exacts from the buyer or lessee an agreement that he
will not use or deal in the commodities of a competitor of the
lessor or seller, whenever thé effect of such agreement is to sub-
stantially lessen competition or create monopoly.

3. Inter-corporate shareholding, whereby a corporation
acquires stock in a competitor, or in two or more corporations
which are themselves competitors and the effect of such acquisi-
tion is to substantially lessen competition or restrain commerce
by the use of such stock control or otherwise. (Clayton Act,
Sec. 7, par. 1, 2 and 3.)

4+. Interlocking directors, that is, after October 15, 1916,
no person may be a director in two or more corporations any one
of which has capital, surplus and undivided profits aggregating
more than a million dollars, if such corporations have heretofore
been competitors by virtue of the nature of their business and
the location of its operations to such an extent that elimination
of competition between them by agreement would violate any of
the anti-trust laws.

Par. 43. The term “unfair competition,” in the Senate bill,
was changed to “unfair methods of competition” in conference.
But Senator Cummins, the author of Section 5 as it passed the
Senate, declared, in discussing the conference report, that the
two phrases, in his judgment, “mean exactly the same thing.’*
Five efforts to insert a definition of “unfair competition” in the
Senate bill were defeated. The pllowing, by Senator Reed, failed
by two votes:

Sec. 6. The term “unfair competition,” as used in section 5, is
hereby defined to embrace all those acts, devices, concealments,
threats, coercions, deceits, frauds, dishonest practices, false represen-
tations, slanders of business, and all other acts or devices, whether
of like nature with those herein enumerated or not, done or used
with the intent or calculated to destroy or unreasonably hinder the
business of another or prevent another from engaging in business,
or to restrain trade or to create a monopoly.

* Congressional Record, Sept. 5, 1914.

16
Par. 44, The view of the opponents of a fixed definition of
the term was very clearly expressed by Senator Cummins, in the
debate on July 31, when he said:

I affirm that when we say no man shall be guilty of unfair compe-
tition in commerce we have laid down a rule that is as well under-
stood and as capable of definite application as the great majority of
the statutes which we have enacted. We are dealing with commerce,
with business. It has manifold forms. It is of infinite variety; and
it is utterly impossible to prescribe a rule of conduct relating to com-
merce so definite that there can be no difference of opinion respecting
-its application. We never have done it. No country ever did it.
We never will be able to do it. (Congressional Record, July 31,

1914.)
Par. 45. Later, on the same day, Senator Cummins thus
described the manner in which, in his opinion, the board would

apply the terms “unfair competition” or ‘unfair methods of
competition.”

It would be the duty of the board to consult the decisions of the
courts, the learning of the time, the custom of merchants, the habits
of trade, the writings of studious and thoughtful men, all of which
go to make up our understanding of the words “unfair competition.”
It will be the duty of the commission to apply those words in that
sense precisely as it is now the duty of the court to apply the words
“andue restraint of trade” in the sense in which we commonly under-
stand that phrase. (Congressional Record, July 31, 1914.)

Par. 46. Attention has been previously called to the meaning
given to the term “unfair competition” in the common law and
the statutes predicated upon it.* Its broader meaning in this Act
must be gathered from the opinions of the Commission, as the
term in question is applied to particular facts and such applica-
tions are reviewed by the courts.

Par. 47. Despite a certain prevalent notion to the contrary,
the Act does not authorize or direct the Commission to advise
applicants what does or does not constitute “unfair methods of
competition,” or to draft a business code of forbidden or permis-
sible conduct. The only instance in which the Act empowers the
Commission to investigate the operation of a corporation with a
view to readjusting its business in conformity with the law is

* Singer on Trade-Mark Laws of the World, and Unfair Trade.

Paul on the Law Trade-Marks, including Trade Names and Unfair
Competition.

Nims on the Law of Unfair Business Competition.

Hopkins on the Law of Trade-Marks, Trade Names, and Unfair Com-
petition.

‘Hesseltine’s Digest of the Law of Trade-Marks and Unfair Trade.

17
when such corporation is alleged to be violating the anti-trust
acts, and then only when the Attorney-General requests such
action by the Commission.

Par. 48. “If,” said Senator Cummins, perhaps the leading
champion of the Act,
I thought that the Commission which we hope to create would sit
down and attempt to write out an instruction to the business men
of this country as to the things they could lawfully do and the things
which it would be unlawful for them to do, there is no power which
could induce me to favor it. (Congressional Record, July 29, 1914.)

Par. 49. Another strong advocate of the measure, Senator
Walsh, declared:

We are not going to give the Trade Commission the general power
to regulate and prescribe rules under which the business of this coun-
try shall in the future be conducted; we propose simply to give it the
power to denounce as unlawful a particular practice that is pursued
by that business. (Congressional Record, August 5, 1914.)

CHAPTER IV
Procedure, Court Review, Immunity. Penal Provisions

Par. 50. Commission procedure in preventing unfair methods
of competition: Possessing the general power “to make rules
and regulations” for “carrying out the provisions of this Act,”
the Commission is free to fix its own forms and procedure, save
in the enforcement of Section 5 of the Trade Commission Act,
and Sections 2, 3, 7 and 8 of the Clayton Act. In these cases,
and in both Acts the procedure and method of serving complaints,
and the manner and character of appeal to the courts, is fixed,
in identical statutory language.

Par. 51. It matters not, how a complaint charging unfair
methods of competition may be brought to the attention of the
Commission. It may originate with the agents of the Commis-
sion or elsewhere, but to start a proceeding to prevent such

» methods by particular parties, two requisites are necessary: The

Commission must have reason to believe that a person, partner-
ship, or corporation is using methods specifically forbidden by
the provisions of the Clayton Act or by the general inhibition
against unfair methods of competition in the Trade Commission

. Act, and, that a proceeding, to ascertain the fact and stop it, if

proven, is in the public interest.

18
Par. 52. In that case, a complaint, the form of which is to be
fixed by the Commission, is served upon the accused and a place
and time of hearing fixed therein at least thirty days after such
service. The accused is to be there heard, the testimony taken in
writing, and if, in the opinion of the Commission after such hear-
ing, the method of competition shown is prohibited, it issues and
serves an order directing the party to desist from it, which order
it may modify or set aside, in whole or part, at any time before
the record of the hearing shall be filed in the Circuit Court of
Appeals. If the defendant party neglects or refuses to obey the
order, the Commission may apply to the Circuit Court of Appeals
for its enforcement by injunction in any circuit where the
defendant resides or does business, or where the condemned
method of competition was used. The appropriate court obtains
jurisdiction of the further proceeding upon the filing of the Com-
mission’s petition, record and service of notice of such applica-
tion on the defendant.

Par. 53. The defendant may likewise appeal to the same
court to have any order of the Commission set aside by following
a like procedure. The statute fixes no limit to the time within
which the defendant party may appeal from the Commission’s
order. In all appeals, the findings of the Commission are conclu-
sive as to the facts, if supported by testimony.

Par. 54. On good cause shown by either party, the court may
grant leave to adduce additional evidence, before the Commission,
upon such conditions as the court may, fix. If such further hear-
ing be permitted, the Commission may make new findings and
new recommendations for the modification or dissolution of its
original order.

Par. 55. The judgment and order of the court is final, save
it may be reviewed in the discretion of the Supreme Court upon
certiorart. (Sec. 240, Judicial Code, and Sec. 3, Rule 37, of the
Supreme Court, amended June 10, 1912.)

Par. 56. These proceedings in the Court of Appeals take
precedence over other pending cases.

Par. 57. The Trade Commission, therefore, like the Inter-
state Commerce Commission, can enforce its orders against a
recalcitrant only by appeal to the courts, and such appeal may be
originated by the defendant himself.

Character of Court Review
Par. 58. While the Commission’s finding of fact is binding
19
upon the court, that finding must be supported by substantial
evidence. That is, if, upon the face of the record, the facts,
clearly and unmistakably, did not in the opinion of the court
constitute unfair competition, the order would be dissolved. Aside
from perhaps such a rare question, however, all questions of law,
as distinguished from questions of fact, will be open to exami-
nation. That is, the court's review would deal with the power
of the Commission and the rights of the defendant. The court
cannot consider the policy or expediency of the Commission’s
order nor substitute its opinion upon the facts for that of the
Commission.

Par. 59. It would seem, therefore, upon the authority of like
proceedings by the Interstate Commerce Commission, that the
questions raised upon the review of the Commission’s order will
be confined to:

1. All relevant questions of constitutional power or right.

2. All relevant questions as to whether the order of the Com-
mission is within the scope of the statutory authority under
which it purports to be made.

3. Whether, though the form of the order is “within the
delegated power, nevertheless it must be treated as not embraced
therein, because the exercise of authority which is questioned has
been manifested in such an unreasonable manner as to cause it,
in truth, to be within the elementary rule that the substance, and
not the shadow, determines the validity of the exercise of power.”
(1. C. C. v. Illinois Central R. R., 215 U. S., 452.)

(1.C.C.v.U. P.R.R. Co., U. S., 541, etc.)

Jurisdiction of Courts and Commission

Par. 60. While the Circuit Court of Appeals of the United
States is given exclusive jurisdiction “to enforce, set aside, or
modify orders of the Commission” (Sec. 5, par. 6, Trade Com-
mision Act), the District Courts of the United States (Sec. 9,
par. 3) are likewise given jurisdiction to enforce subpoenas of the
Commission in cases of contumacy, upon application of the Com-
mission, and if the district court issues such an order, it may
punish its disobedience as a contempt. The district court is also
given jurisdiction to issue writs of mandate upon application of
the Attorney-General to enforce compliance with this Act. (Sec.
9, par. 4.)

Par. 61. While the Trade Commission alone enforces Section
5 of the Trade Commission Act, it does not exclusively enforce

20
Sections 2, 3, 7 and 8 of the Clayton Act. Section 15 of that Act
makes it the duty of the district attorneys of the United States
to prevent and restrain violations of the Act through the district
courts in their respective districts, under direction of the Attorney-
General. It would seem, therefore, that they may likewise pre-
vent violations of the above sections if the head of the Depart-
ment of Justice so directs. Under Section 16 of the Clayton Act,
private individuals may also appeal to the district courts for
injunctions to prevent violations of the same sections, if threat-
ened with irreparable loss or damage by such violation.

‘

Service of Process

Par. 62. In proceedings to prevent “unfair methods of com-
petition,’ the processes of the Commission may be served by
anyone whom they authorize, either by:

1. Personally serving the copy on the defendant person, a
member of the defendant partnership, or the President, Secretary
or other executive officer, or a director of the defendant corpo-
ration.

2. Leaving copy of such process at the principal office or place
of business of such person, partnership or corporation.

3. Sending by registered mail a copy addressed to such per-
son, partnership or corporation at his or its principal office or
place of business.

Par. 63. Proof of service is supplied by the verified return
of the person making it, setting forth the manner in which it was
made, or by the return post office receipt, if by mail.

Immunity

Par. 64. In conformity with the immunity enactments of
1903 and 1906, no person is excused from testifying or produc-
ing documentary evidence before the Commission because it may
tend to criminate him or subject him to punishment. But no
“natural” person, as distinguished from a corporation, is to be
prosecuted or subjected to penalty on account of any matter con-
cerning which he may testify or produce evidence before the
Commission in response to a subpoena, except that any “natural”
person is, of course, subject to punishment for perjury if he give
false testimony. (Sec. 9, par. 7.)

Par. 65. No order of the Commission, or of any court in
respect to enforcing it, -in anywise relieves or absolves any per-

21
son, partnership, or corporation from liability under the anti-
trust acts. A further provision placed in the Senate bill that no
order or finding of the Court or Commission in the enforcement
of the 5th Section of the Trade Commission Act should be
“admissible as evidence” in any suit, civil or criminal, brought
under the anti-trust acts, was eliminated in conference. While,
therefore, it may seem unlikely that private individuals or the
Department of Justice would bring proceedings under the anti-
trust acts upon a state of facts which the Commission had declined
to condemn, or to prevent which a court refused to enforce the
Commission’s order, nothing in the statute estops such an occur-
rence. (Sec. 5, par. 7.)

Penal Provisions

Par. 66. Refusal to testify or produce documentary evidence
in response to a lawful inquiry and subpoena of the Commission
is a misdemeanor punishable by fine and imprisonment. It has
been noted elsewhere that a contumacious witness may also
become the subject of an order of the district court which, if
issued, and refused obedience, makes the party liable for con-
tempt. (Sec. 10, par. 1.)

Par. 67. It is also a misdemeanor to wilfully make or cause
the making of false statements in any report required by the
Commission, or to wilfully make false entries in records kept by
corporations subject to the Act, or to neglect to make true and
correct entries and records of all facts and transactions pertain-
ing to the business of such corporations. It is equally a mis-
demeanor to wilfully remove from the jurisdiction of the United
States, or mutilate, alter, or falsify the “documentary evidence”
of such corporations, or refuse to submit such evidence to the
Commiission or its agents for the purpose of inspection. (Sec.
10, par. 2.)

Par. 68. To compel the prompt filing of such annual or
special reports as the Commission may require under sub-sec-
tions a and b, of Section 6, it is provided that if any corporation
neglects to file the same within the time prescribed and shall,
upon notice of its default, continue for thirty days in such failure,
it shall, every day thereafter that such neglect continues, forfeit
one hundred dollars, to be recovered in a civil proceeding brought
by the United States. (Sec. 10, par. 3.)

Par. 69. It is a misdemeanor punishable by heavy fine or
imprisonment for any officer or employe of the Commission to

22
make public information obtained by it, without its authority or
the direction of a court.

Enforcement of Other Statutes to remain unaffected by Trade

Commission Act

Par. 70. The final section of the Trade Commission Act
declares that no part of it is to be construed to either alter or
repeal the Anti-trust Acts or the acts to regulate commerce, or to
interfere with or prevent their enforcement.

23
 
fe ectaass

Supplement
THE FEDERAL TRADE COMMISSION ACT

An Act to create a Federal Trade Commission, to define its powers
and duties, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That a commission is hereby
created and established, to be known as the Federal Trade Commission
(hereinafter referred to as the commission), which shall be composed of
five commissioners, who shall be appointed by the President, by and with
the advice and consent of the Senate. Not more than three of the com-
missioners shall be members of the same political party. The first com-
missioners appointed shall continue in office for terms of three, four, five,
six and seven years, respectively, from the date of the taking effect of
this Act, the term of each to be designated by the President, but their
successors shall be appointed for terms of seven years, except that any
person chosen to fill a vacancy shall be appointed only for the unexpired
term of the commissioner whom he shall succeed. The commission shall
choose a chairman from its own membership. No commissioner shall
engage in any other business, vocation, or employment. Any commissioner
may be removed by the President for inefficiency, neglect of duty, or
malfeasance in office. A vacancy in the commission shall not impair the
right of the remaining commissioners to exercise all the powers of the

commission.
The commission shall have an official seal, which shall be judicially

noticed.

Sec. 2. That each commissioner shall receive a salary of $10,000 a
year, payable in the same manner as the salaries of the judges of the
courts of the United States. The commission shall appoint a secretary,
who shall receive a salary of $5,000 a year, payable in like manner, and
it shall have authority to employ and fix the compensation of such attor-
neys, special experts, examiners, clerks, and other employes as it may
from time to time find necessary for the proper performance of its duties
and as may be from time to time appropriated for by Congress.

With the exception of the secretary, a clerk to each commissioner,
the attorneys, and such special experts and examiners as the commission
may from time to time find necessary for the conduct of its work, all
employes of the commission shall be a part of the classified civil service,
and shall enter the service under such rules and regulations as may be
prescribed by the commission and by the Civil Service Commission.

All of the expenses of the commission, including all necessary expen-
ses for transportation incurred by the commissioners or by their employes
under their orders, in making any investigation, or upon official business
in any other places than in the city of Washington, shall be allowed and
paid on the presentation of itemized vouchers therefor approved by the

commission. ;
Until otherwise provided by law, the commission may rent suitable

offices for its use.

25
The Auditor for the State and other departments shall receive and
examine all accounts of expenditures of the commission.

Sec. 3. That upon the organization of the commission and election
of its chairman, the Bureau of Corporations and the offices of Commis-
sioner and Deputy Commissioner of Corporations shall cease to exist;
and all pending investigations and proceedings of the Bureau of Corpora-
tions shall be continued by the commission.

All clerks and employes of the said bureau shall be transferred to
and become clerks and employes of the commission at their present
grades and salaries. All records, papers, and property of the said bureau
shall becomes records, papers, and property of the commission, and all
unexpended funds and appropriations for the use and maintenance of the
said bureau, including any allotment already made to it by the Secretary
of Commerce from the contingent appropriation for the Department of
Commerce for the fiscal year nineteen hundred and fifteen, or from the
departmental printing fund for the fiscal year nineteen hundred and
fifteen, shall become funds and appropriations available to be expended
by the commission in the exercise of the powers, authority, and duties
conferred on it by this Act.

The principal office of the commission shall be in the city of Wash-
ington, but it may meet and exercise all its powers at any other place.
The commission may, by one or more of its members, or by such exam-
iners as it may designate, prosecute any inquiry necessary to its duties
in any part of the United States.

Sec. 4. That the words defined in this section shall have the follow-
ing meaning when found in this Act, to wit:

“Commerce” means commerce among the several States or with
foreign nations, or in any Territory of the United States or in the
“District of Columbia, or between any such Territory and another, or
between any such Territory and any State or foreign nation, or between
the District of Columbia and any State or Territory or foreign nation.

“Corporation” means any company or association incorporated or
unincorporated, which is organized to carry on business for profit and
has shares of capital or capital stock, and any company or association,
incorporated or unincorporated, without shares of capital or capital stock,
except partnerships, which is organized to carry on business for its own
profit or that of its members.

“Documentary evidence” means all documents, papers, and corres-
pondence in existence at and after the passage of this Act.

“Acts to regulate commerce” means the Act entitled “An Act to
regulate commerce,” approved February fourteenth, eighteen hundred
and eighty-seven, and all Acts amendatory thereof and supplementary
thereto.

“Anti-trust acts” means the Act entitled “An act to protect trade and
commerce against unlawful restraints and monopolies,” approved July
second, eighteen hundred and ninety; also the sections seventy-three to
seventy-seven, inclusive, of an Act entitled “An Act to reduce taxation,
to provide revenue for the Government, and for other purposes,” approved
August twenty-seventh, eighteen hundred and ninety-four; and also the
Act entitled “An Act to amend sections seventy-three and seventy-six of

26
the Act of August twenty-seventh, eighteen hundred and ninety-four,
entitled ‘An Act to reduce taxation, to provide revenue for the Govern-
ment, and for other purposes,” approved February twelfth, nineteen hun-
dred and thirteen.

Sec, 5. That unfair methods of competition in commerce are hereby
declared unlawful.

The commission is hereby empowered and directed to prevent persons,
partnerships, or corporations, except banks, and common carriers subject
to the Acts to regulate commerce, from using unfair methods of competi-
tion in commerce.

Whenever the commission shall have reason to believe that any such
person, partnership, or corporation has been or is using any unfair method
of competition in commerce, and if it shall appear to the commission that
a proceeding by it in respect thereof would be to the interest of the public,
it shall issue and serve upon such person, partnership, or corporation a
complaint stating its charges in that respect, and containing a notice of a
hearing upon a day and at a place therein fixed at least thirty days after
the service of said complaint. The person, partnership, or corporation so
complained of shall have the right to appear at the place and time so fixed
and show cause why an order should not be entered by the commission
requiring such person, partnership, or corporation to cease and desist
from the violation of the law so charged in said complaint. Any person,
partnership, or corporation may make application, and upon good cause
shown may be allowed by the commission, to intervene and appear in
said proceeding by counsel or in person. The testimony in any such pro-
ceeding shall be reduced to writing and filed in the office of the commis-
sion. If upon such hearing the commission shall be of the opinion that
the method of competition in question is prohibited by this Act, it shall
make a report in writing in which it shall state its findings as to the facts,
and shall issue and cause to be served on such person, partnership, or cor-
poration an order requiring such person, partnership, or corporation to
cease and desist from using such method of competition. Until a tran-
script of the record in such hearing shall have been filed in a circuit court
of appeals of the United States, as hereinafter provided, the commission
may at any time, upon such notice and in such manner as it shall deem
‘proper, modify or set aside, in whole or in part, any report or any order
made or issued by it under this section.

If such person, partnership, or corporation fails or neglects to obey
such order of the commission while the same is in effect, the commission
may apply to the circuit court of appeals of the United States, within any
circuit where the method of competition in question was used or where
such person, partnership, or corporation resides or carries on business,
for the enforcement of its order, and shall certify and file with its
application a transcript of the entire record in the proceeding, including
all the testimony taken and the report and order of the commission. Upon
such filing of the application and transcript the court shall cause notice
thereof to be served upon such person, partnership, or corporation and
thereupon shall have jurisdiction of the proceeding and of the question
determined therein, and shall have power to make and enter upon the
pleadings, testimony, and proceedings set forth in such transcript a decree
affirming, modifying, or setting aside the order of the commission. The

27
findings of the commission as to the facts, if supported by testimony, shall
be conclusive. If either party shall apply to the court for leave to adduce
additional evidence, and shall show to the satisfaction of the court that
such additional evidence is material and that there were reasonable grounds
for the failure to adduce such evidence in the proceeding before the com-
mission, the court may order such additional evidence to be taken before
the commission and to be adduced upon the hearing in such manner and
upon stich terms and conditions as to the court may seem proper. The com-
mission may modify its findings as to the facts, or make new findings, by
reason of the additional evidence so taken, and it shall file such modified or
new findings, which, if supported by testimony, shall be conclusive, and its
recommendation, if any, for the modification or setting aside of its original
order, with the returm of such additional evidence. The judgment and
decree of the court shall be final, except that the same shall be subject to
review by the Supreme Court upon certiorari as provided in section two
hundred and forty of the Judicial Code.

Any party required by such order of the commission to cease and
desist from using such method of competition may obtain a review of
such order in said circuit court of appeals by filing in the court a written
petition praying that the order of the commission be set aside. A copy
of such petition shall be forthwith served upon the commission, and there-
upon the commission forthwith shall certify and file in the court a tran-
script of the record as hereinbefore provided. Upon the filing of the tran-
script the court shall have the same jurisdiction to affirm, set aside, or
modify the order of the commission as in the case of an application by
the commission for the enforcement of its order, and the findings of the
commission as to the facts, if supported by testimony, shall in like manner
be conclusive.

The jurisdiction of the circuit court of appeals of the United States
to enforce, set aside, or modify orders of the commission shall be exclusive.

Such proceedings in the-circuit court of appeals shall be given prece-
dence over other cases pending therein, and shall be in every way expe-
dited. No order of the commission or judgment of the court to enforce
the same shall in any wise relieve or absolve any person, partnership, or
corporation from any liability under the anti-trust acts.

Complaints, orders, and other processes of the commission under this.
section may be served by anyone duly authorized by the commission,
either (a) by delivering a copy thereof to the person to be served, or
to a member of the partnership to be served, or to the president, secre-
tary, or other executive officer or a director of the corporation to be
served; or (b) by leaving a copy thereof at the principal office or place of
business of such person, partnership, or corporation; or (c) by register-
ing and mailing a copy thereof addressed to such person, partnership, or
corporation at his or its principal office or place of business. The verified
return by the person so serving said complaint, order, or other process
setting forth the manner of said service shall be proof of the same, and
to return post-office receipt for said complaint, order, or other process
registered and mailed as aforesaid shall be proof of the service of the
same.

Sec. 6. That the commission shall also have power—
(a) To gather and compile information concerning, and to investi-

28
gate from time to time the organization, business, conduct, practices, and
management of any corporation engaged in commerce, excepting banks
and common carriers subject to the Act to regulate commerce, and its
relation to other.corporations and to individuals, associations, and partner-
ships.

(b) To require, by general or special orders, corporations engaged
in commerce, excepting banks, and common carriers subject to the Act
to regulate commerce, or any class of them, or any of them, respectively,
to file with the commission in such form as the commission may prescribe
annual or special, or both annual and special, reports or answers in writ-
ing to specific questions, furnishing to the commission such information
as it may require as to the organization, business, conduct, practices,
management, and relation to other corporations, partnerships, and indi-
viduals of the respective corporations filing such reports or answers in
writing. Such reports and answers shall be made under oath, or other-
wise, as the commission may prescribe, and shall be filed with the com-
mission within such reasonable period’as the commission may prescribe,
unless additional time be granted in any case by the commission.

(c) Whenever a final decree has been entered against any defend-
ant corporation in any suit brought by the United States to prevent and
restrain any violation of the anti-trust Acts, to make investigation, upon
its own initiative, of the manner in which the decree has been or is being
carried out, and upon the application of the Attorney-General it shall
be its duty to make such investigation. It shall transmit to the Attorney-
General a report embodying its findings and recommendations as a result
of any such investigation, and the report shall be made public in the
discretion of the commission.

(d) Upon the direction of the President or either House of Con-
gress to investigate and report the facts relating to any alleged violations
of the anti-trust Acts by any corporation.

(e) Upon the application of the Attorney-General to investigate and
make recommendations for the readjustment of the business of any cor-
poration alleged to be violating the anti-trust Acts in order that the cor-
poration may thereafter maintain its organization, management and con-
duct of business in accordance with law.

(f) To make public from time to time such portions of the informa-
tion obtained by it hereunder, except trade secrets and names of custom-
ers, as it shall deem expedient in the public interest; and to make annual
and special reports to the Congress and to submit therewith recommenda-
tions for additional legislation; and to provide for the publication of its
reports and decisions in such form and manner as may be best adapted
‘for public information and use.

(g) From time to time to classify corporations and to make rules
and regulations for the purpose of carrying out the provisions of this
Act.

(h) To investigate, from time to time, trade conditions in and with
foreign countries where associations, combinations, or practices of manu-
-facturers, merchants, or traders, or other conditions, may affect the foreign
trade of the United States, and to report to Congress thereon, with such
-recommendations as it deems advisable.

29
Sec. 7. That in any suit in equity brought by or under the direction
of the Attorney-General as provided in the anti-trust Acts, the court may,
upon the conclusion of the testimony therein, if it shall be then of opin-
ion that the complainant is entitled to relief, refer said suit to the commis-
sion, as a master in chancery, to ascertain and report an appropriate form
of decree therein. The commission shall proceed upon such notice to the
parties and under such rules of procedure as the court may prescribe, and
upon the coming in of such report such exceptions may be filed and such
proceedings had in relation thereto as upon the,report of a master in
other equity causes, but the court may adopt or reject such report, in
whole or in part, and enter such decree as the nature of the case may in
its judgment require.

Sec. 8. That the several departments and bureaus of the Govern-
ment when directed by the President shall furnish the commission, upon
its request, all records, papers, and information in their possession relat-
ing to any corporation subject to any of the provisions of this Act, and
shall detail from time to time such officials and employes to the commis-
sion as he may direct.

Sec. 9. That for the purposes of this Act the commission, or its
duly authorized agent or agents, shall at all reasonable times have access
to, for the purpose of examination, and the right to copy any documen-
tary evidence of any corporation being investigated or proceeded against;
and the commission shall have power to require by subpcena the attend-
ance and testimony of witnesses and the production of all such documen-
tary evidence relating to any matter under investigation. Any member
of the commission may sign subpoenas, and members and examiners of
the commission may administer oaths and affirmations, examine witnesses,
and receive evidence.

Such attendance of witnesses, and the production of such documen-
tary evidence, may be required from any place in the United States, at
any designated place of hearing. And in case of disobedience to a subpcena
the commission may invoke the aid of any court of the United States in
requiring the attendance and testimony of witnesses and the production
of documentary evidence.

Any of the district courts of the United States within the jurisdic-
tion of which such inquiry is carried on may, in case of contumacy or
refusal to obey a subpcena issued to any corporation or other person,
issue an order requiring such corporation or other person to appear
before the commission, or to produce documentary evidence if so ordered,
or to give evidence touching the matter in question; and any failure to
obey such order of the court may be punished by such court as a con-
tempt thereof.

Upon the application of the Attorney-General of the United States,
at the request of the commission, the district courts of the United
States shall have jurisdiction to issue writs of mandamus commanding
any person or corporation to comply with the provisions of this Act or
any order of the commission made in pursuance thereof.

The commission may order testimony to be taken by deposition in any
proceeding or investigation pending under this Act at any stage of such
proceeding or investigation. Such depositions may be taken before any
person designated by the commission and having power to administer

30
oaths. Such testimony shall be reduced to writing by the person taking
the deposition, or under his direction, and shall then be subscribed’ by the
deponent. Any person may be compelled to appear and depose and to
produce documentary evidence in the same manner as witnesses may be
compelled to appear and testify and produce documentary evidence before
the commission as hereinbefore provided.

Witnesses summoned before the commission shall be paid the same
fees and mileage that are paid witnesses in the courts of the United States,
and witnesses whose depositions are taken and the persons taking the same
shall severally be entitled to the same fees as are paid for like services
in the courts of the United States.

No persons shall be excused from attending and testifying or from
producing documentary evidence before the commission or in obedience
to the subpcena of the commission on the ground or for the reason that
the testimony or evidence, documentary or otherwise, required of him
may tend to criminate him or subject him to a penalty or forfeiture.
But no natural person shall be prosecuted or subjected to any penalty or
forfeiture for or on account of any transaction, matter, or thing concerning
which he may testify, or produce evidence, documentary or otherwise,
before the commission in obedience to a subpcena issued by it: Provided,
That no natural person so testifying shall be exempt from prosecution
and punishment for perjury committed in so testifying.

Sec. 10. That any person who shall neglect or refuse to attend and
testify, or to answer any lawful inquiry, or to produce documentary evi-
dence, if in his power to do so, in obedience to the subpoena or lawful
requirement of the commission, shall be guilty of an offense and upon
conviction thereof by a court of competent jurisdiction shall be punished
by a fine of not less than $1,000 nor more than $5,000, or by imprison-
ment for not more than one year, or by both such fine and imprisonment.

Any person who shall wilfully make, or cause to be made, any false
entry or statement of fact in any report required to be made under this Act,
or who shall wilfully make, or cause to be made, any false entry in any
account, record, or memorandum kept by any corporation subject to this
Act, or who shall wilfully neglect or fail to make, or to cause to be
made, full, true, and correct entries in such accounts, records, or memo-
randa of all facts and transactions appertaining to the business of such
corporation, or who shall wilfully remove out of the jurisdiction of the
United States, or wilfully mutilate, alter, or by any other means falsify
any documentary evidence of such corporation, or who shall wilfully
refuse to submit to the commission or to any of its authorized agents
for the purpose of inspection and taking copies, any documentary evi-
dence of such corporation in his possession or within his control, shall
be deemed guilty of an offense against the United States, and shall be
subject, upon conviction in any court of the United States of competent
jurisdiction, to a fine of not less than $1,000 nor more than $5,000, or to
imprisonment for a term of not more than three years, or to both such
fine and imprisonment.

If any corporation required by this Act to file any annual or special
report shall fail so to do within the time fixed by the commission for
filing the same, and such failure shall continue for thirty days after notice
of such default, the corporation shall forfeit to the United States the sum

31
of $100 for each and every day of the continuance of such failure, which
forfeiture shall be payable into the Treasury of the United States, and
shall be recoverable in a civil suit in the name of the United States brought
in the district where the corporation has its principal office or in any
district in which it shall do business. It shall be the duty of the various
district attorneys, under the direction of the Attorney-General of the
United States, to prosecute for the recovery of forfeiture. The costs and
expenses of such prosecution shall be paid out of the appropriation for
the expenses of the courts of the United States.

Any officer or employe of the commission who shall make public any
information obtained by the commission without its authority, unless
directed by a court, shall be deemed guilty of a misdemeanor, and, upon
conviction thereof, shall be punished by a fine not exceeding $5,000, or by
imprisonment not exceeding one year, or by fine and imprisonment, in
the discretion of the court.

Sec. 11. Nothing contained in this Act shall be construed to prevent
or interfere with the enforcement of the provisions of the anti-trust Acts
or the Acts to regulate commerce, nor shall anything contained in the
Act be construed to alter, modify, or repeal the said anti-trust Acts or
the Acts to regulate commerce or any part or parts thereof.

Approved, September 26, 1914.

32
Index to Federal Trade Commission Act

“Anti-trust acts,” definition ......... 0.0 ccc cee eee c eee eee cusuceunees a
not interfere with enforcements of................. 11
Attorney-General, application Of............ cece eee eee eee 6 (e)3 9
equity suit brought under.....................005. 7
Bureau of Corporations, ceases to €xiSt.......... 6. eee eee eee eee 3
Circuit Court: of Appeals: coos ica sana eeeetddegs saaeemrs aemeontes 5
‘Commerce,” acts to regulate 1.0... ccc ccc cece eens 4
; defined: 24 4.50 seeks fog d Mew aaa ces bes canGhe ee saagneeses 4
Commission: access to documentary evidence .................2. 9
AAMINIStER’: OATHS: (y.cowws cue Lae caaunmaais HPiG ca dua teishaeais 9
duty to classify corporations ..............e eee eee 6 (g)
duty to make public information ................... 6 (f)
duty to report an appropriate form of decree.......... 7
duty to transmit report to Attorney-General......... 6 (c)
Cin PlOVES! (OL 4 aseacns Gave Zach tedsudeae Haws sonata cade ach 2
EXPENSES. OF | adore rte deters Canes soe ee teiiaa welnecoas 2
euilty Of misdemeanor. 2.5 2: ian acac ness aaa ees 10
members, appointment, business, politics, removal from
office; ‘term of OMice: ic acceso ska cosk ness tenes ae ees 1
members Salary” 26. 3..uuinnatcn adios ant Peerage oy eae 2
OMCE OF. 6c amsokee wae Ge One are adc nbeans aad acuns 3
OFeanization: “csievaichs puemads ets eis sO cetedetiadstan 3
power to investigate ............-. 6 (a) (c) (d) (e) (h)
power to invoke aid of court ............-.. 0c eee eee 9
power to require by subpeena ..........-. 0. eee eee eee 9
power to require reports to be filed................ 6 (b)
Sead gg cece ialerd cared aS OER GSE ARAM Goh CAM ROTIO GARE 1
SECTELATY Sib necg ea derasied oNewnoriiawened ynseke nag aaa 2
Sigfi SUDPHNAS sis ticceus ora genge eed daw Neen ueeer aera 9
VACANCY. gue i dauduvaineseonceuk iugawenmowe Sedaka ees 1
Congress: direct commission to investigate ...............-..see ee 6 (d)
reports madé tO .cscsscrsnetareretewemmbigeninn sag tees 6 (f)
Contumacy: o.5 cecschas oy tices Rekens ae wate edn Tob Aceh bad non done 9
“Corporation”: defined 2.02.0... 2.0 e eee eee ee teen eens 4
documentary evidence Of......... 0. . eee cree e eee eee 9
TEPOTtS 2. eee e cece cee ee ete tenet ee ens 10
Decree final entered against defendant............. 0. sees eee eee eee 6 (c)
Deposition, testimony taken by..........-..-.e seer eee eee eens 9
Documentary evidence, access tO ....--. eee e eee ee ee tenet e tees 9
Gehned. -gcdisvec eae weal sxns eon ag arpdeen Ae eae 4
Equity suit 2.2.0.0... cece eee cee ence eee nent e etre tree eee nn es 7
Fines: failure of corporations to file reports........-.-.;.0++-e seen 10
misdemeanor of officer or member of Commission.......... 10
WILNESSES occ cece eee cee eee teeta nee ne eset tenes tenn ees 10
House: direct Commission to investigate.......-.-..-+ seer ee eee 6 (d)
President: direct Commission to investigate.......-.-..-.+ sees es 6 (d)
direct Government departments furnish information...... 8
Supreme Court .......2ecece seen eee rete tent ee ene ete ne ens ss ci 5
Trade conditions .......-.:see eee ee eee eee eee e eee e eens e tenes 6 (h)
Unfair Methods of Competition ......--- 25 sees cece eee e reer ect renee 5
complaint ........ceee eee cee eee eee t eet teen ene s ener nesses
HeSHNE vac cs- eegadas hyemy eh Camb area meed Feros e races
order not obeyed ...... ee eee teeter eter erent e tte tn nes
order requiring—to cease and desist from....-...-.+++++s+55:
order review Of ...... eee e seer erect eee eet essere tener es
petition ........ eee eee eee ete beeen ene eee ee eer eees
report of Commission stating findingS........0- eerste eee eee
testiMONy . 02. cee eee cece eee eee ee eee e ee Ee rere EEE Eee
HLANSCripts cvs cael ae eas tadeeg a CONE Tees RAPE TER EE ER
Witnesses: attendance and testimony of, fees.....----.--2+eerrrrreee 9
false statementS ........e- cece eee eter eee tee tet etn eanes 10
writs of mandamus .........esee errr eee errr ents 9
THE CLAYTON ACT

An Act to supplement existing laws against unlawful restraints and
monopolies, and for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That “anti-trust laws,”
as used herein, includes the Act entitled “An Act to protect trade and
commerce against unlawful restraints and monopolies,’ approved July
second, eighteen hundred and ninety; sections seventy-three to seventy-
seven, inclusive, of an Act entitled “An Act to reduce taxation, to provide
revenue for the Government, and for other purposes,” of August twenty-
seventh, eighteen hundred and ninety-four; and Act entitled “An Act to
amend sections seventy-three and seventy-six of the Act of August
twenty-seventh, eighteen hundred and ninety-four, entitled ‘An Act to
reduce taxation, to provide revenue for the Government, and for other
purposes,” approved February twelfth, nineteenth hundred and thirteen;
and also this Act.

“Commerce,” as used herein, means trade or commerce among the
several States and with foreign nations, or between the District of Colum-
bia or any Territory of the United States and any State, Territory, or
foreign nation, or between any insular possessions or other places under
the jurisdiction of the United States, or between any such possession or
place and any State or Territory of the United States or the District of
Columbia or any foreign nation, or within the District of Columbia or
any Territory or any insular possession or other place under the juris-
diction of the United States: Provided, That nothing in this Act con-
tained shall apply to the Philippine Islands.

The word “person” or “persons” wherever used in this Act shall be
deemed to include corporations and associations existing under or author-
ized 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.

Sec. 2, That it shall be unlawful for any person engaged in com-
merce, in the course of such commerce, either directly or indirectly to
discriminate in price between different purchasers of commodities, which
commodities are sold for use, consumption, or resale within the United
States or any Territory thereof or the District of Columbia or any insular
possession or other place under the jurisdiction of the United States,
where the effect of such discrimination may be to substantially lessen
competition or tend to create a monopoly in any line of commerce: Pro-
vided, That nothing herein contained shall prevent discrimination in price
between purchasers of commodities on account of differences in the grade,
quality, or quantity of the commodity sold, or that makes only due allow-
ance for difference in the cost of selling or transportation, or discrimi-
nation in price in the same or different communities made in good faith
to meet competition: And provided further, That nothing herein contained
shall prevent persons engaged in selling goods, wares, or merchandise in
commerce from selecting their own customers in bona fide transactions
and not in restraint of trade.

34
Sec. 8. That it shall be unlawful for any person engaged in com-
merce, in the course of such commerce, to lease or make a sale or con-
tract for sale of goods, wares, merchandise, machinery, supplies or other
commodities, whether patented or unpatented, for use, consumption or
resale within the United States or any Territory thereof or the District
of Columbia or any insular possession or other place under the jurisdic-
tion of the United States, or fix a price charged therefor, or discount
from, or rebate upon, such price, on the condition, agreement or under-
standing that the lessee or purchaser thereof shall not use or deal in the
goods, wares, merchandise, machinery, supplies or other commodities of
a competitor or competitors of the lessor or seller, where the effect of
such lease, sale, or contract for sale or such condition, agreement or
understanding may be to substantially lessen competition or tend to create
a monopoly in any line of commerce.

Sec. 4. That any person who shall be injured in his business or
property by reason of anything forbidden in the anti-trust laws may sue
therefor in any district court of the United States in the district in
which the defendant resides or is found or has an agent, without respect
to the amount in controversy, and shall recover threefold the damages by
him sustained, and the cost of suit, including a reasonable attorney’s fee.

Sec. 5. That a final judgment or decree hereafter rendered in any
criminal prosecution or in any suit or proceeding in equity brought by or
on behalf of the United States under the anti-trust laws to the effect that
a defendant has violated said laws shall be prima facie evidence against
such defendant in any suit or proceeding brought by any other party
against such defendant under said laws as to all matters respecting which
said judgment or decree would be an estoppel as between the parties
thereto: Provided, This section shall not apply to consent judgments or
decrees entered before any testimony has been taken: Provided further,
This section shall not apply to consent judgments or decrees rendered in
criminal proceedings or suits in equity, now pending, in which the taking
of testimony has been commenced but has not been concluded, provided
such judgments or decrees are rendered before any further testimony
is taken.

Whenever any suit or proceeding in equity or criminal prosecution
is instituted by the United States to prevent, restrain or punish violations
of any of the anti-trust laws, the running of the statute of limitations in
respect of each and every private right of action arising under said laws
and based in whole or in part on any matter complained of in said suit
or proceeding shall be suspended during the pendency thereof.

Sec. 6. That the labor of a human being is not a commodity or
article of commerce Nothing contained in the anti-trust laws shall be
construed to forbid the existence and operation of labor, agricultural, or
horticultural organizations, instituted for the purposes of mutual help, and
not having capital stock or conducted for profit, or to forbid or restrain
individual members of such organizations from lawfully carrying out the
legitimate objects thereof; nor shall such organizations, or the members
thereof, be held or construed to be illegal combinations or conspiracies in
restraint of trade, under the anti-trust laws.

Sec. 7% That no corporation engaged in commerce shall acquire,
directly or indirectly, the whole or any part of the stock or other share

35
capital of another corporation engaged also 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.

No corporation shall acquire, directly or indirectly, the whole or any
part of the stock or other share capital of two or more corporations
engaged in commerce where the effect of such acquisition, or the use of
such stock by the voting or granting of proxies or otherwise, may be to
substantially lessen competition between such corporations, or any of them,
whose stock or other share capital is so acquired, or to restrain such
commerce in any section or community, or tend to create a monopoly of
any line of commerce.

This section shall not apply to corporations purchasing such stock
solely for investment and not using the same by voting or otherwise to
bring about, or in attempting to bring about, the substantial lessening of
competition. Nor shall anything contained in this section prevent a cor-
poration engaged in commerce from causing the formation of subsidiary
corporations for the actual carrying on of their immediate lawful business,
or the natural and legitimate branches or extensions thereof, or from
owning and holding all or a part of the stock of such subsidiary corpora-
tions, when the effect of such formation is not to substantially lessen
competition.

Nor shall anything herein contained be construed to prohibit any
common carrier subject to the laws to regulate commerce from aiding
in the construction of branches or short lines so located as to become
feeders to the main line of the company so aiding in such construction
or from acquiring or owning all or any part of the stock of such branch
lines, nor to prevent any such common carriers from acquiring and owning
all or any part of the stock of a branch or short line constructed by an
independent company where there is no substantial competition between
the company owning the branch line so constructed and the companyt
owning the main line acquiring the property or an interest therein, nor to
prevent such common carrier from extending any of its lines through
the medium of the acquisition of stock or otherwise of any other such
common carrier where there is no substantial competition between the
company extending its lines and the company whose stock, property, or an
interest therein is so acquired.

Nothing contained in this section shall be held to affect or impair
any right heretofore legally acquired: Provided, That nothing in this
section shall be held or construed to authorize or make lawful anything
heretofore prohibited or made illegal by the anti-trust laws, nor to exempt
any person from the penal provisions thereof or the civil remedies therein
provided.

Sec. 8. That from and after two years from the date of the approval
of this Act no person shall at the same time be a director or other officer
or employe of more than one bank, banking association or trust company,
organized or operating under the laws of the United States, either of
which has deposits, capital, surplus, and undivided profits aggregating more
than $5,000,000; and no private banker or person who is a director in any
bank or trust company, organized and operating under the laws of a

36
State, having deposits, capital, surplus, and undivided profits aggregating
more than $5,000,000, shall be eligible to be a director in any bank or
banking association organized or operating under the laws of the United
States. The eligibility of a director, officer, or employe under the fore-
going provisions shall be determined by the average amount of deposits,
capital, surplus, and undivided profits as shown in the official statements of
such bank, banking association, or trust company filed as provided by law
during the fiscal year next preceding the date set for the annual election
of directors, and when a director, officer, or employe has been elected or
selected in accordance with the provisions of this Act it shall be lawful
for him to continue as such for one year thereafter under said election or
employment.

No bank, banking association or trust company, organized or operat-
ing ‘under the laws of the United States, in any city or incorporated town
or village of more than two hundred thousand inhabitants, as shown by
the last preceding decennial census of the United States, shall have as a
director or other officer or employe any private banker or any director or
other officer or employe of any other bank, banking association or trust
company located in the same place: Provided, That nothing in this section
shall apply to mutual savings banks not having a capital stock represented
by shares: Provided further, That a director or other officer or employe
of such bank, banking association, or trust company may be a director or
other officer or employe of not more than one other bank or trust company
organized under the laws of the United States or any State where the
entire capital stock of one is owned by stockholders in the other: And
provided further, That nothing contained in this section shall forbid a
director of class A of a Federal reserve bank, as defined in the Federal
Reserve Act from being an officer or director or both an officer and
director in one member bank.

That from and after two years from the date of the approval of this
Act no person at the same time shall be a director in any two or more
corporations, any one of which has capital, surplus, and undivided profits
aggregating more than $1,000,000, engaged in whole or in part in commerce,
other than banks, banking associations, trust companies and common car-
riers subject to the Act to regulate commerce, approved February fourth,
eighteen hundred and eighty-seven, if such corporations are or shall have
been theretofore, by virtue of their business and location of operation,
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. The eligibility of a director under the foregoing provision
shall be determined by the aggregate amount of the capital, surplus, and
undivided profits, exclusive of dividends declared but not paid to stock-
holders, at the end of the fiscal year of said corporation next preceding
the election of directors, and when a director has been elected in accord-
ance with the provisions of this Act it shall be lawful for him to con-
tinue as such for one year thereafter.

When any person elected or chosen as a director or officer or selected
as an employe of any bank or other corporation subject to the provisions
of this Act is eligible at the time of his election or selection to act for
such bank or other corporation in such capacity his eligibilty to act in such
capacity shall not be affected and he shall not become or be deemed
amenable to any of the provisions hereof by reason of any change in the

37
affairs of such bank or other corporation from whatsoever cause, whether
specifically excepted by any of the provisions hereof or not, until the
expiration of one year from the date of his election or employment.

Sec. 9. Every president, director, officer or manager of any firm, asso-
ciation or corporation engaged in commerce as a common carrier, who
embezzles, steals, abstracts or wilfully misapplies, or wilfully permits to
be misapplied, any of the moneys, funds, credits, securities, property or
assets of such firm, association or corporation, arising or accruing from,
or used in, such commerce, in whole or in part, or wilfully or knowingly
converts the same to his own use or to the use of another shall be deemed
guilty of a felony and upon conviction shall be fined not less than $500
or confined in the penitentiary not less than one year nor more than ten
years, or both, in the discretion of the court. .

Prosecutions hereunder may be in the district court of the United
States for the district wherein the offense may have been committed.

That nothing in this section shall be held to take away or impair the
jurisdiction of the courts of the several States under the laws thereof;
and a judgment of conviction or acquittal on the merits under the laws
of any State shall be a bar to any prosecution hereunder for the same act
or acts.

Sec. 10. That after two years from the approval of this Act no com-
mon carrier engaged in commerce shall have any dealings in securities,
supplies or other articles of commerce, or shall make or have any con-
tracts for construction or maintenance of any kind, to the amount of
more than $50,000, in the aggregate, in any one year, with another cor-
poration, firm, partnership or association when the said common carrier
shall have upon its board of directors or as its president, manager or as its
purchasing or selling officer, or agent in the particular transaction, any
person who is at the same time a director, manager, or purchasing or sell-
ing officer of, or who has any substantial interest in, such other corpora-
tion, firm, partnership or association, unless and except such purchases
shall be made from, or such dealings shall be with, the bidder whose bid
is the most favorable to such common carrier, to be ascertained by com-
petitive bidding under regulations to be prescribed by rule or otherwise
by the Interstate Commerce Commission. No bid shall be received unless
the name and address of the bidder or the names and addresses of the
officers, directors and general managers thereof, if the bidder be a cor-
poration, or of the members, if it be a partnership or firm, be given with
the bid.

Any person who shall, directly or indirectly, do or attempt to do any-
thing to prevent anyone from hidding or shall do any act to prevent free
and fair competition among the bidders or those desiring to bid shall be
punished as prescribed in this section in the case of an officer or director.

Every such common carrier having any such transactions or making
any such purchases shall within thirty days after making the same file with
the Interstate Commerce Commission a full and detailed statement of the
transaction showing the manner of the competitive bidding, who were the
bidders, and the names and addresses of the directors and officers of the
corporations and the members of the firm or partnership bidding; and
whenever the said commission shall, after investigation or hearing, have
reason to believe that the law has been violated in and about the said

38
purchases or transactions it shall transmit all papers and documents and
its own views or findings regarding the transaction to the Attorney-
General.

If any common carrier shall violate this section it shall be fined not
exceeding $25,000; and every such director, agent, manager or officer
thereof who shall have knowingly voted for or directed the act constitut-
ing such violation or who shall have aided or abetted in such violation
shall be deemed guilty of a misdemeanor and shall be fined not exceeding
$5,000, or confined in jail not exceeding one year or both, in the discre-
tion of the court.

Sec. 11. That authority to enforce compliance with sections two,
three, seven and eight of this Act by the persons respectively subject
thereto is hereby vested: in the Interstate Commerce Commission where
applicable to common carriers, in the Federal Reserve Board where applica-
ble to banks, banking associations and trust companies, and in the Federal
Trade Commission where applicable to all other character of commerce,
to be exercised as follows:

Whenever the commission or board vested with jurisdiction thereof
shall have reason to believe that any person is violating or has violated
any of the provisions of sections two, three, seven and eight of this Act,
it shall issue and serve upon such person a complaint stating its charges
in that respect, and containing a notice of a hearing upon a day and at
a place therein fixed at least thirty days after the service of said com-
plaint. The person so complained of shall have the right to appear at
the place and time so fixed and show cause why an order should not be
entered by the commission or board requiring such person to cease and
desist from the violation of the law so charged in said complaint. Any
person may make application, and upon good cause shown may be allowed
by the commission or board, to intervene and appear in said proceeding
by counsel or in person. The testimony in any such proceeding shall be
reduced to writing and filed in the office of the commission or board. If
upon such hearing the commission or board, as the case may be, shall be
of the opinion that any of the provisions of said sections have been or
are being violated, it shall make a report in writing in which it shall
state its findings as to the facts, and shall issue and cause to be served
on such person an order requiring such person to cease and desist from
such violations, and divest itself of the stock held or rid itself of the
directors chosen contrary to the provisions of sections seven and eight
of this Act, if any there be, in the manner and within the time fixed by
said order. Until a transcript of the record in such hearing shall have
been filed in a circuit court of appeals of the United States, as hereinafter
provided, the commission or board may at any time, upon such notice
and in such manner as it shall deem proper, modify or set aside, in
whole or in part, any report or any order made or issued by it under
this section.

If such person fails or neglects to obey such order of the commis-
sion or board while the same is in effect, the commission or board may
apply to the circuit court of appeals of the United States, within any
circuit where the violation complained of was or is being committed or
where such person resides or carries on business, for the enforcement of
its order, and shall certify and file with its application a transcript of the

39
entire record in the proceeding, including all the testimony taken and the
report and order of the commission or board. Upon such filing of the
application and transcript the court shall cause notice thereof to be served
upon such person and thereupon shall have jurisdiction of the proceeding
and of the question determined therein, and shall have power to make
and enter upon the pleadings, testimony, and proceedings set forth in
such transcript a decree affirming, modifying, or setting aside the order
of the commission or board. The findings of the commission or board
as to the facts, if supported by testimony, shall be conclusive. If either
party shall apply to the court for leave to adduce additional evidence, and
shall show to the satisfaction of the court that such additional evidence
is material and that there were reasonable grounds for the failure to
adduce such evidence in the proceeding before the commission or board,
the court may order such additional evidence to be taken before the com-
mission or board and to be adduced upon the hearing in such manner
and upon such terms and conditions as to the court may seem proper.
The commission or board may modify its findings as to the facts, or
make new findings, by reason of the additional evidence so taken, and it
shall file such modified or new findings, which, if supported by testimony,
shall be conclusive, and its recommendation, if any, for the modification
or setting aside of its original order, with the return of such additional
evidence. The judgment and decree of the court shall be final, except that
the same shall be subject to review by the Supreme Court upon certiorari
as provided in section two hundred and forty of the Judicial Code.

Any party required by such order of the commission or board to
cease and desist from a violation charged may obtain a review of suchy
order in said circuit court of appeals by filing in the court a written peti-
tion praying that the order of the commission or board be set aside. A
copy of such petition shall be forthwith served upon the commission or
board, and thereupon the commission or board forthwith shall certify
and file in the court a transcript of the record as hereinbefore provided.
Upon the filing of the transcript the court shall have the same jurisdic-
tion to affirm, set aside, or modify the order of the commission or board
as in the case of an application by the commission or board for the
enforcement of its order, and the findings of the commission or board
as to the facts, if supported by testimony, shall in like manner be con-
clusive.

The jurisdiction of the circuit court of appeals of the United States
to enforce, set aside, or modify orders of the commission or board shall
be exclusive.

Such proceedings in the circuit court of appeals shall be given prece-
dence over other cases pending therein, and shall be in every way expe-
dited. No order of the commission or board or the judgment of the
court to enforce the same shall in any wise relieve or absolve any person
from any liability under the anti-trust Acts.

Complaints, orders, and other processes of the commission or board
under this section may be served by anyone duly authorized by the com-
mission or board, either (a) by delivering a copy thereof to the person
to be served, or to a member of the partnership to be served, or to the
president, secretary, or other executive officer or a director of the cor-
poration to be served; or (b) by leaving a copy thereof at the principal
office or place of business of such person; or (c) by registering and

40
mailing a copy thereof addressed to such person at his principal office or
place of business. The verified return by the person so serving said com-
plaint, order, or other process setting forth the manner of said service
shall be proof of the same, and the return post-office receipt for said com-
plaint, order, or other process registered and mailed as aforesaid shall be
proof of the service of the same.

Sec. 12. That any suit, action, or proceeding under the anti-trust
laws against a corporation may be brought not only in the judicial district
whereof it is an inhabitant, but also in any district wherein it may be
found or transacts business; and all process in such cases may be served
in the district of which it is an inhabitant, or wherever it may be found.

Sec. 13. That in any suit, action, or proceeding brought by or on
behalf of the United States subpcenas for witnesses who are required
to attend a court of the United States in any judicial district in any
case, civil or criminal, arising under the anti-trust laws may run into
any other district: Provided, That in civil cases no writ of subpoena shall
issue for witnesses living out of the district in which the court is held
at a greater distance than one hundred miles from the place of holding
the same without the permission of the trial court being first had upon
proper application and cause shown.

Src. 14. That whenever a corporation shall violate any of the penal
provisions of the anti-trust laws, such violation shall be deemed to be
also that of the individual directors, officers, or agents of such cor-
poration who shall have authorized, ordered, or done any of the acts
constituting in whole or in part such violation, and such violation shall
be deemed a misdemeanor, and upon conviction therefor of any such
director, officer, or agent he shall be punished by a fine of not exceeding
$5,000 or by imprisonment for not exceeding one year, or by both, in
the discretion of the court.

Sec. 15. That the several district courts of the United States are
hereby invested with jurisdiction to prevent and restrain violations of
this Act, and it shall be the duty of the several district attorneys of the
United States, in their respective districts, under the direction of the
Attorney-General, to institute proceedings in equity to prevent and restrain
such violations. Such proceedings may be by way of petition setting
forth the case and praying that such violation shall be enjoined or other-
wise prohibited. When the parties complained of shall have been duly
notified of such petition, the court shall proceed, as soon as may be, to
the hearing and determination of the case; and pending such petition, and
before final decree, the court may at any time make such temporary
restraining order or prohibition as shall be deemed just in the premises.
Whenever it shall appear to the court before which any such proceeding
may be pending that the ends of justice require that other parties should
be brought before the court, the court may cause them to be summoned
whether they reside in the district in which the court is held or not, and
subpcenas to that end may be served in any district by the marshal thereof.

Sec. 16. That any person, firm, corporation, or association shall be
entitled to sue for and have injunctive relief, in any court of the United
States having jurisdiction over the parties, against threatened loss or

41
damage by a violation of the anti-trust laws, including sections two, three,
seven and eight of this Act, when and under the same conditions and
principles as injunctive relief against threatened conduct that will cause
loss or damage is granted by courts of equity, under the rules govern-
ing such proceedings, and upon the execution of proper bond against
damages for an injunction improvidently granted and a showing that the
danger of irreparable loss or damage is immediate, a preliminary injunc-
tion may issue: Provided, That nothing herein contained shall be con-
strued to entitle any person, firm, corporation, or association, except the
United States, to bring suit in equity for injunctive relief against any
common carrier subject to the provisions of the Act to regulate com-
merce, approved February fourth, eighteen hundred and eighty-seven,
in respect of any matter subject to the regulation, supervision, or other
jurisdiction of the Interstate Commerce Commission.

Sec. 17. That no preliminary injunction shall be issued without
notice to the opposite party.

No temporary restraining order shall be granted without notice to
the opposite party unless it shall clearly appear from specific facts shown
by affidavit or by the verified bill that immediate and irreparable injury,
loss or damage will result to the applicant before notice can be served
and a hearing had thereon, Every such temporary restraining order
shall be indorsed with the date and hour of issuance, shall be forthwith
filed in the clerk's office and entered of record, shall define the injury
and state why it is irreparable and why the order was granted without
notice, and shall by its terms expire within such time after entry, not
to exceed ten days, as the court or judge may fix, unless within the time.
so fixed the order is extended for a like period for good cause shown,
and the reasons for such extension shall be entered of record. In case a
temporary restraining order shall be granted without notice in the con-
tingency specified, the matter of the issuance of a preliminary injunction
shall be set down for a hearing at the earliest possible time and shall take
precedence of all matters except older matters of the same character;
and when the same comes up for hearing the party obtaining the tempo-
rary restraining order shall proceed with the application for a prelimi-
nary injunction, and if he does not do so the court shall dissolve the
temporary restraining order. Upon two days’ notice to the party obtain-
ing such temporary restraining order the opposite party may appear and
move the dissolution or modification of the order, and in that event the
court or judge shall proceed to hear and determine the motion as expe-
ditiously as the ends of justice may require.

Section two hundred and sixty-three of an Act entitled “An Act to
codify, revise, and amend the laws relating to the judiciary,” approved
March third, nineteen hundred and eleven, is hereby repealed.

Nothing in this section contained shall be deemed to alter, repeal,
or amend section two hundred and sixty-six of an Act entitled “An Act
to codify, revise, and amend the laws relating to the judiciary,” approved
March third, nineteen hundred and eleven.

Sec. 18. That except as otherwise provided in section 16 of this Act,
no restraining order or interlocutory order of injunction shall issue,
except upon the giving of security by the applicant in such sum as the
court or judge may deem proper, conditioned upon the payment of such

42
costs and damages as may be incurred or suffered by any party who may
be found to have been wrongfully enjoined or restrained thereby.

Sec. 19. That every order of injunction or restraining order shall
set forth the reasons for the issuance of the same, shall be specific in
terms, and shall describe in reasonable detail, and not by reference to
the bill of complaint or other document, the act or acts sought to be
restrained, and shall be binding only upon the parties to the suit, their
officers, agents, servants, employes, and attorneys, or those in active
concert or participating with them, and who shall, by personal service or
otherwise, have received actual notice of the same.

Sec. 20. That no restraining order or injunction shall be granted by
any court of the United States, or a judge or the judges thereof, in any
case between an employer and employes, or between employers and em-
ployes, or between employes, or between persons employed and persons
seeking employment, involving, or growing out of a dispute concerning
terms or conditions of employment, unless necessary to prevent irrepara-
ble injury to property, or to a property right, of the party making the
application, for which injury there is no adequate remedy at law, and
such property or property right must be described with particularity in the
application, which must be in writing and sworn to by the applicant or
by his agent or attorney.

And no such restraining order or injunction shall prohibit any per-
son or persons, whether singly or in concert, from terminating any rela-
tion of employment, or from ceasing to perform any work or labor, or
from recommending, advising, or persuading others by peaceful means
so to do; or from attending at any place where any such person or
persons may lawfully be, for the purpose of peacefully obtaining or
communicating information, or from peacefully persuading any person
to work or to abstain from working; or from ceasing to patronize or to
employ any party to such dispute, or from recommending, advising, or
persuading others by peaceful and lawful means so to do; or from pay-
ing or giving to, or withholding from, any person engaged in such dis-
pute, any strike benefits or other moneys or things of value; or from
peaceably assembling in a lawful manner, and for lawful purposes; or
from doing any act or thing which might lawfully be done in the absence
of such dispute by any party thereto; nor shall any of the acts specified
in this paragraph be considered or held to be violations of any law of
the United States.

Sec. 21. That any person who shall wilfully disobey any lawful
writ, process, order, rule, decree, or command of any district court of
the United States or any court of the District of Columbia by doing any
act or thing therein, or thereby forbidden to be done by him, if the act
or thing so done by him be of such character as to constitute also a
criminal offense under any statute of the United States, or under the laws
of any State in which the act was committed, shall be proceeded against
for his said contempt as hereinafter provided.

Sec. 22. That whenever it shall be made to appear to any district
court or judge thereof, or to any judge therein sitting, by the return
of a proper officer on lawful process, or upon the affidavit of some credi-

43
ble person, or by information filed by any district attorney, that there is
reasonable ground to believe that any person has been guilty of such
contempt, the court or judge thereof, or any judge therein sitting, may
issue a rule requiring the said person so charged to show cause upon a
day certain why he should not be punished therefor, which rule, together
with a copy of the affidavit or information, shall be served upon the
person charged, with sufficient promptness to enable him to prepare for
and make return to the order at the time fixed therein. If upon or by
such return, in the judgment of the court, the alleged contempt be not
suMciently purged, a trial shall be directed at a time and place fixed by
the court: Provided, however, That if the accused, being a natural per-
son, fail or refuse to make return to the rule to show cause, an attach-
ment may issue against his person to compel an answer, and in case of
his continued failure or refusal, or if for any reason it be impracticable
to dispose of the matter on the return day, he may be required to give
reasonable bail for his attendance at the trial and his submission to the
final judgment of the court. Where the accused is a body corporate, an
attachment for the sequestration of its property may be issued upon like
refusal or failure to answer.

In all cases within the purview of this Act such trial may be by the
court, or, upon demand of the accused, by a jury; in which latter event
the court may impanel a jury from the jurors then in attendance, or the
court or the judge thereof in chambers may cause a sufficient number of
jurors to be selected and summoned, as provided by law, to attend at
the time and place of trial, at which time a jury shall be selected and
impaneled as upon a trial for misdemeanor; and such trial shall conform,
as near as may be, to the practice in criminal cases prosecuted by indict-
ment or upon information.

lf the accused be found guilty, judgment shall be entered accordingly,
prescribing the punishment, either by fine or imprisonment, or both, in
the discretion of the court. Such fine shall be paid to the United States
or to the complainant or other party injured by the act constituting the
contempt, or may, where more than one is so damaged, be divided or
apportioned among them as the court may direct, but in no case shall
the fine to be paid to the United States exceed, in case the accused is a
natural person, the sum of $1,000, nor shall such imprisonment exceed
the term of six months: Provided, That in any case the court or a
judge thereof may, for good cause shown, by affidavit or proof taken in
open court or before such judge and filed with the papers in the case, dis-
pense with the rule to show cause, and may issue an attachment for the
arrest of the person charged with contempt; in which event such person,
when arrested, shall be brought before such court or a judge thereof
without unnecessary delay and shall be admitted to bail in a reasonable
penalty for his appearance to answer to the charge or for trial for the
contempt; and thereafter the proceedings shall be the same as provided
herein in case the rule had issued in the first instance,

Sec. 23. That the evidence taken upon the trial of any person so
accused may be preserved by bill of exceptions, and any judgment of
conviction may be reviewed upon writ of error in all respects as now
provided by law in criminal cases, and may be affirmed, reversed, or modi-
fied as justice may require. Upon the granting of such writ of error,

44
execution of judgment shall be stayed, and the accused, if thereby sen-
tenced to imprisonment, shall be admitted to bail in such reasonable sum
as may be required by the court, or by any justice, or any judge of any

district court of the United States or any court of the District of
Columbia.

SEc. 24. That nothing herein contained shall be construed to relate
to contempts committed in the presence of the court, or so near thereto
as to obstruct the administration of justice, nor to contempts committed
in disobedience of any lawful writ, process, order, rule, decree, or com-
mand entered in any suit or action brought or prosecuted in the name of,
or on behalf of, the United States, but the same, and all other cases of
contempt not specifically embraced within section twenty-one of this Act,
may be punished in conformity to the usages at law and in equity now
prevailing.

SEc. 25. That no proceeding for contempt shall be instituted against
any person unless begun within one year from the date of the act com-
plained of; nor shall any such proceeding be a bar to any criminal prosecu-
tion for the same act or acts; but nothing herein contained shall affect any
proceedings in contempt pending at the time of the passage of this Act.

Sec. 26. If any clause, sentence, paragraph, or part of this Act shall
for any reason, be adjudged by any court of competent jurisdiction to be
invalid, such judgment shall not affect, impair, or invalidate the remain-
der thereof, but shall be confined in its operation to the clause, sentence,
paragraph, or part thereof directly involved in the controversy in which
such judgment shall have been rendered.

Approved, October 15, 1914.
Index to Clayton Act

SEc.
ATAGAVIES: Hg eeken Geel welds heared aaa a HG taaaca eee angered 1%, 22
Agricultural Organizations: existence and operation of............. 6
“Anti-Lrist Laws’: definition Of a0. ei. sasa scans ses esasnweena ders 1

nothing contained in shall be construed to forbid exist-
ence and operation of labor, agricultural or horticul-

tural OfganiZations) CtC.-ccccs.gerwsssenetedas pasawevae s 6

penal provisions: 2x0 saienunites ioe y daeae ede ae Hae 14

proceeding brought unders 2. css ccvewews ies eca ss sees 5, 12,13

PROVISIONS 1OL- 1 256 caps cciasunastii noes seco Deena oA 8

Va OLA IONS: hin Seaver sy exqu edad bed BO ests e ea eaves dca. eoelece teenage 11, 15, 16

Attorney-General, suusssyyceiuies Gataesngec ace awe mamma denn oad Adomales § 15

Bail: qcneu sone ar dinekwach bo ye chew SOQMAAMNL eoee Dp Paley EN ewG Ringe 23

Banks directors, ofhcers; eniployés ..4c0¢-e5see005 seamed Seeses wives 8

Pedetral RGSErve.. coduciasasumasean saeels Saar SEARS Y SOS 8

PLIVALE DAnKE ca ccsas vacaaaew da naw pew ad smemaies nh Murla die wesliens 8

Bill Of exceptions: «<sasnageuccaies sare Canaan wae avatidasn ceded nies 23
Board:

See Federal Reserve Board.

Business? ANjUry tO: ania see caaw statewide beens SO 4SOR eae BEEK Eea Oe ES 4

Circuit, Court Of Appeals epee Gace endear pdisee eran ancnree es 11

CAME GAS O: sara at achectece die teva arias Dee B bec pet ate elena ese na Seat cath a tll igs Pedeaiannata 13

Combinations: slWegal ' 1 s:ccetcrnte ¥ yen oe weg es eee Mea eG ge eee 6

“Commerce” * definition: Of ssu.ana aaeuaia ee soa yas eelatatn va erga eae lasunne A

no corporation engaged in shall acquire................ 7

PeTSONs: ENga Ved Ie. sical eee A A Miconw phesess 2,3,9, 10

Commission :
See Interstate Commerce Commission.
See Federal Trade Commission.

Commoditves? purchases Of -.2..t4 saeoue sss oo4 suey eeeeee sain 2
Common: Catriets. .ccsnesesseesees sé poreum ene ceca tnemur steed 7, 8, 9, 10, 16
(COMP EEN OM <5 ca ceest. se vaneyusmatsanaevaieed cocalaua Sebagts BMS ee oe ave apleeeaanee RS Seon 3, 7,10
Competitive: Biddine + arcons se neacnea apenas © oo OSS oI due RINE 10
Complaint. cog cectcte Ge enanaieorn de atandons bi alow ees a ahe Bae eared e Seabee 11
Bill of (Complaints s ccncacunie somvnge's ¢ bahemata-t dadlem'aleedinkpia ea alatiwicg atone 19
Corispitacies. in. restraint ‘of trades <2 1.45 assesdsa teiess yoeee ve ye asawes 6
Gontemipt:- cing sseck acta a sada ge oon e Hk GONed SET w aa ease Doe 21, 22, 24, 25
CORPO DAROIS: io 5 aries cb. iaves evechiavn b.adcohcosdsBeacaiauaues fuel Beh Deets atOe 7,8, 10, 11, 12, 14, 16
Costs: and: Damages: 3 cacanawaddadace esd males 4 mouse Gene wea aner tes 18, 20
OU ES) Ae csiges tac. 'a wrancie Cocohea detest at We Beane ea bi Gloucs aYs oon dase ela ioe 16, 20, 22

See District Court.

See Circuit Court of Appeals.

See Supreme Court.

See Court of Equity.

See Court of District of Columbia.
Court of District -of ‘Columbia. sca cater e's 2 eennewe died canes eed 21, 23
(ourtior Equity: ccescvaesig hie oe EE 44 Peas St Soe tegeectcne- Sa Se aeaes 16
Criminal © fens €: as.c.ca-aem eaten Oe tenn pwercna ties de aoe) oan: 8 AA wie! at Stunted 21
Damages: FECOVERC: 5 teense iardaemseraeaealragads paca niadwan owas 4
FECT OSS MEY Sc 5.05 2th og cs ecereecanne vice rn ee Sev ee sedate grote woes seed neces EG eas 15
Defendant, violation AntizLtust LawsSicssccs vs eccundwely oes beuea woes 5
District Attorney” a wsy chaawia eaaes ded Edens ossaGaouer ee ee chee 15, 22
Dastrict: ‘Court of United) States ccc cscuciies vc:se peaks amvnieion a eves 9, 15, 21, 23
Employers aiid employes. xa naais i ciovidae dics mubiacecave- ahead tyslsiea WA Soaptewa a alba 20
Federal ReservevAct sc ocnascns ay cawine Pavoad ad Genesee Mamas edaleien 8
iederal, Reserve, Board. /.44150'aadewaueta aie + eae ead peed Fone 11
Federal “Trade Commission, sewvo-cesocksaienond occeked Maas ee ciwas 11
Felony, guilty Of <:....nacvainaiaancn veda ta aacdiacag to ciied. 48 BERNA S Cem dats 9
Pine aces coe tanta Gar Ga Mian eannee ta ook on 9, 10, 14, 22
PMG ES = gyavacctel shed tre 4c tae Gareesttteeyeeiave miele ater eaters eotne Gants kel sap valeeks ways 11
POATIN S ) carrssucenctird laline geo Glaldeiane ne ati lguiglaialecsegnoe ee Sie ese Oma grata 11,15
(Mprisoninent vox jevss wade vons ne isc xeeMebod cewwemes tains 9, 10, 14, 22, 23
Ingunctions interlocitory order Of, o occn sacebieoaerniees sandy ye cdau 18
Tnjunctirorns Onder Of -s.ccoskcea yee nasa hk dea saniewa eaGN oeeewaa keaes 19
PLEMMINALY a's grey Gacheguacwd eden oOo bg bara talecta ah be Me be 17

Injunctive reliefs... cc cceusa aoveaa noone date eaaea wee a sae eaten 16
Invalidity: clause, sentence, paragraph or party of this Act.......... 26
Interstate Commerce Commission ........... 0.00 ce cee eee ee eens 10, 11, 16
Tnvestigation «che cidiusuada-ca Gad ckge eho eens Seema ee ws Bae eats 10
Judiciary: laws relating to repealed ........ ee ec e eee ee eee eee ees a
Labor of a human being not a commodity........ 0.0... ccc cece eee eee 6
Ofganizations, Operations -Of5 wav. iasdicwa reyes can ova agesenvn 6
Lease: tying contract basis unlawful .............. Dn cane Brae eodere 3
INIISUEMERTION. 2 vicdac-etaue ee Ge taawarns eases Gamba ne wdetsiadee wn tahtthactaders ote 10, 14
Moneys, funds, credits and securities, etc., misapplied............... 9
Penal Provisions: gsc:ncnaa acs catete ons ue eae ena ne Ge onar sneer SAcoaNe 14
“Person. Or. PErsSONS sud. csiv anda Maes La Gaavesiouulamana ewe patna keen 1
POLIO. (vc daniteduneaey Serene hei pee eas DO eae ew a SS a has Whe ata tebe 15
Pricé Discrimination: 22.02 snasnen co Beebe seed SPs oecee ke weep eee ee 2
PrOSECULIONS5..s5c4:3 5 Sodan dees Cae dh ea eee SC EOES Otome Abe Mare ae ee 9
REDOTtS viers oy doy Ei et aes ddn nae tenmaramr ns oe swe em aoe ee 11
Restraiine-Order .ccsccausacy iota coca dulemieeln arene lees y 17, 18, 19, 20
Statute. of Limitations: running Of :.i.5 ccsesvees cess sncessaneeires 5
Subpcenas: 2.1 pnsaceas yoy demebnie ssid weeuie ase ae eaeaess Yareees 13
Supreme: Court: asiivaaycawaies ose doi Wildes gordo da ontinwaa sees G5 1a
‘Transctipt: Of Record  cics.cawigneeeran quik sase-oee Se peed aan we ae eas 11
WHtESSES) es vices anak caer HE eee a RNA aAE DD EHS baHe Sus derO MLE ere USO Ratore 13
Writ OF BERGE acco d is.dtcnacie $5004 Sadie AEE Oe aes eee etn pe elewtty 23

47
THE SHERMAN ACT
(Act of July 2, 1890; 26 Stat., 209.)

An Act to protect trade and commerce against unlawful restraints and
monopolies.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress Assembled.

Section 1. Every contract, combination in the form of trust or
otherwise, or conspiracy, in restraint of trade or commerce among the
several States, or with foreign nations, is hereby declared to be illegal.
Every person who shall make any such contract or engage in any such
combination or conspiracy, shall be deemed guilty of a misdemeanor,
and, on conviction thereof, shall be punished by fine not exceeding five
thousand dollars, or by imprisonment not exceeding one year, or by both
said punishments, in the discretion of the court.

Sec. 2. Every person who shall monopolize, or attempt to monopo-
lize, or combine or conspire with any other person or persons, to monopo-
lize any part of the trade or commerce among the several States, or
with foreign nations, shall be deemed guilty of a misdemeanor, and, on
conviction thereof, shall be punished by fine not exceeding five thousand
dollars, or by imprisonment not exceeding one year, or by both said pun-
ishments, in the discretion of the court.

Sec. 3. Every contract, combination in form of trust or otherwise,
or conspiracy, in restraint of trade or commerce in any Territory of the
United States or of the District of Columbia, or in restraint of trade or
commerce between any such Territory and another, or between any such
Territory or Territories and any State or States or the District of Colum-
bia, or with foreign nations, or between the District of Columbia and
any State or States or foreign nations, is hereby declared illegal. Every
person who shall make any such contract or engage in any such combina-
tion or conspiracy, shall be deemed guilty of a misdemeanor, and, on con-
viction thereof, shall be punished by fine not exceeding five thousand
dollars, or by imprisonment not exceeding one year, or by both said
punishments, in the discretion of the court.

Sec. 4. That several circuit courts of the United States are hereby
invested with jurisdiction to prevent and restrain violations of this act;
and it shall be the duty of the several district attorneys of the United
States, in their respective districts, under the direction of the Attorney-
General, to institute proceedings in equity to prevent and restrain such
violations. Such proceedings may be by way of petition setting forth the
case and praying that such violation shall be enjoined or otherwise pro-
hibited. When the parties complained of shall have been duly notified
of such petition the court shall proceed, as soon as may be, to the hearing
and determination of the case; and pending such petition and before
final decree, the court may at any time make such temporary restraining
order or prohibition as shall be deemed just in the premises.

48
Src. 5. Whenever it shall appear to the court before which any pro-
ceeding under section four of this act may be pending, that the ends of
justice require that other parties should be brought before the court, the
court may cause them to be summoned, whether they reside in the dis-
trict in which the court is held or not; and subpcenas to that end may be
seryed in any district by the marshal thereof.

SEc. 6. Any property owned under any contract or by any combina-
tion, or pursuant to any conspiracy (and being the subject thereof) men-
tioned in section one of this act, and being in the course of transporta-
tion from one State to another, or to a foreign country, shall be forfeited
to the United States, and may be seized and condemned by like proceed-
ings as those provided by law for the forfeiture, seizure, and condemna-
tion of property imported into the United States contrary to law.

Sec. 7. Any petson who shall be injured in his business or property
by any other person or corporation by reason of anything forbidden or
declared to be unlawful by this act, may sue therefor in any circuit court
of the United States in the district in which the defendant resides or is
found, without respect to the amount in controversy, and shall recover
threefold the damages by: him sustained, and the costs of suit, including
a reasonable attorney’s fee.

Sec. 8. That the word “person,” or “persons,” wherever used in this
act shall be deemed to include corporations and associations 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.
ANTI-TRUST AMENDMENTS TO THE WILSON TARIFF
ACT OF AUGUST 27, 1894

Sections 73-77.
(28 Stat. 570.)

Sec. 73. That every combination, conspiracy, trust, agreement, or
contract is hereby declared to be contrary to public policy, illegal, and
void, when the same is made by or between two or more persons or
corporations either of whom is engaged in importing any article from
any foreign country into the United States, and when such combination,
conspiracy, trust, agreement, or contract is intended to operate in restraint
of lawful trade, or free competition in lawful trade or commerce, or to
increase the market price in any part of the United States of any article
or articles imported or intended to be imported into the United States,
or of any manufacture into which such imported article enters or is
intended to enter. Every person who is or shall hereafter be engaged
in the importation of goods or any commodity from any foreign country
in violation of this section of this act, or who shall combine or conspire
with another to violate the same, is guilty of a misdemeanor, and on
conviction thereof in any court of the United States such person shall
be fined in a sum not less than one hundred dollars and not exceeding
five thousand dollars, and shall be further punished by imprisonment, in
the discretion of the court, for a term not less than three months nor
exceeding twelve months.

Sec. 74. That the several circuit courts of the United States are here-
by invested with jurisdiction to prevent and restrain violations of sec-
tion seventy-three of this Act; and it shall be the duty of the several
district attorneys of the United States, in their respective districts, under
the direction of the Attorney-General, to institute proceedings in equity
to prevent and restrain such violations. Such proceedings may be by
way of petitions setting forth the case and praying that such violations
shall be enjoined or otherwise prohibited. When the parties complained
of shall have been duly notified of such petition the court shall proceed,
as soon as may be, to the hearing and determination of the case; and
pending such petition and before final decree, the court may at any time
make such temporary restraining order or prohibition as shall be deemed
just in the premises.

Sec. 75. That whenever it shall appear to the court before which
any proceeding under the seventy-fourth section of this act may be pend-
ing that the ends of justice require that other parties should be brought
before the court, the court may cause them to be summoned, whether they
reside in the district in which the court is held or not; and subpcenas to
that end may be served in any district by the marshal thereof.

Sec. 76. That any property owned under any contract or by any
combination, or pursuant to any conspiracy (and being the subject there-
of) mentioned in section seventy-three of this Act, and being in the

50
course of transportation from one State to another, or to or from a
Territory or the District of Columbia, shall be forfeited to the United
States and may be seized and condemned by like proceedings as those
provided by law for the forfeiture, seizure, and condemnation of prop-
erty imported into the United States contrary to law.

Sec. 77. That any person who shall be injured in his business
or property by any other person or corporation by reason of anything
forbidden or declared to be unlawful by this Act, may sue therefor in
any circuit court of the United States in the district in which the defend-
ant resides or is found, without respect to the amount in controversy,
and shall recover threefold. the damages by him sustained, and the cost
of suit, including a reasonable attorney’s fee.

AMENDMENTS TO SECTIONS 73-77 OF WILSON TARIFF
ACT BY ACT OF FEBRUARY 12, 1913; STAT., 667

An Act to amend section seventy-three and seventy-six of the Act of
August twenty-seventh, eighteen hundred and ninety-four, entitled, “An
Act to reduce taxation, to provide revenue for the Government, and for
other purposes.”

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That section seventy-
three and section seventy-six of the Act of August twenty-seventh,
eighteen hundred and ninety-four, entitled “An Act to reduce taxation,
to provide revenue for the Government, and for other purposes,” be,
and the same are hereby, amended to read as follows:

Sec. 73. That every combination, conspiracy, trust, agreement, or
contract, is hereby declared to be contrary to public policy, illegal, and
void when the same is made by or between two or more persons or
corporations either of whom, as agent or principal, is engaged in import-
ing any article from any foreign country into the United States, and
when such combination, conspiracy, trust, agreement, or contract is
intended to operate in restraint of lawful trade, or free competition in
lawful trade or commerce, or to increase the market price in any part
of the United States of any article or articles imported or intended to be
imported into the United States, or of any manufacture into which such
imported article enters or is intended to enter. Every person who is or
shall hereafter be engaged in the importation of goods or any commodity
from any foreign country in violation of this section of this act, or who
shall combine or conspire with another to violate the same, is guilty of
a misdemeanor, and on conviction thereof in any court of the United
States such person shall be fined in a sum not less than one hundred
dollars and not exceeding five thousand dollars, and shall be further pun-
ished by imprisonment, in the discretion of the court, for a term not less
than three months nor exceeding twelve months.

Src. 76. That any property owned under any contract or by any
combination, or pursuant to any conspiracy, and being the subject thereof,

51
mentioned in section seventy-three of this act, imported into and being
within the United States or being in the course of transportation from
one State to another, or to or from a Territory or the District of Colum-
bia, shall be forfeited to the United States, and may be seized and con-
demned by like proceedings as those provided by law for the forfeiture,
seizure, and condemnation of property imported into the United States
contrary to law.
General Index

Par.

Agreement: submission to Commission proposed by Lippitt. 18

eliminating competition would violate Anti-Trust

TE AWISE oe 2 2 Scesaas secvasiss Schism at cg he eee hve wah gate tal 42
exacted from buyer or lessee.................. 42
Amendments: amended bill passed Senate .................. 19
to H. R. 15613 adopted by Senate. .......... 2

to H. R. 15613 House disagrees to Senate
AMEN AIIENES:. res viclaeen gd Skea ven 4 seeaue eo eoceeo ims 3

Lippitt proposed practical advisory power.... 18
offering definition of “unfair competition”.... 17
Proposal opposed by those in charge, House

Bills enti caseisn Gaginak 2 waka x ehouen ors 12
by Reeds Parle iciee chest lata fence tee a tog's shat 17
by Stevens declared out of order............ 1, 12
Stevens offers rejected proposal.............. 11
to correct verbal error...............0.000005 1,8
“Anti-Trust Acts”: what comstitute .............00.c.ee ee es 31
equity suit brought by Attorney-General
under Anti-Trust Acts................ 36
liability under not relieved by Commis-
SIONS: *OLGeis Savuiiterniemndsn nade suryaameceins 65
Testrain: Violation: Of: sccccaneeaceig ds ane 35
Trade Commission Act does not alter or
TEPGdl: “susieve cones wgkuns sel Fadee bec 70
violation of investigated by Commission. 36
Appeal: questions of law raised on.....................58, 59
by defendant to court to have Commission’s order
set aside without time limit.................... 53
findings of Commission conclusive as to facts...... 53
to courts by Commission............ 00002 c cece eee 52
by private individuals to courts to prevent violations
Sections 2-3-7-8 Clayton Act...............0045 61
Banks: Commission is not to exercise its power over........ 29
punctuation error .............. fioe iaalmamek & sey ener 32
Bills: Clayton Bill: complimentary to Trade Commission
Ball oho5 sank Steak natn aioe ton on iene 15
four sections committed to Trade Com-
mission for enforcement....: Baas ste 15
penal clauses struck out, four sections. 15
reported to Senate ................5. 15
section 2, 3, 7, 8 of...... 34, 38, 42, 50, 61
specific practices forbidden by........ 42
H.R. 12120: introduced by Clayton ............... 1
A. R. 14631: introduced by Covington.............. 1
H. R. 15613: consideration and six hours’ debate... 1
introduced by Covington ............ 1
referred to Committee Interstate and
Foreign Commerce, Senate......... 2
adopted, amended, passed by Senate... 2
House disagrees to Senate amendments J
CO! eiticteniie cd oe care A oh Rg Eee
SCHON 123) bb suze gigas su eked ewes OE 20
SeCHONn) Bo inh ks saa oaea en eee 1

38, 39, 50, 60, 61, 65
Section 6—sub-idivision g.........+-- 22

53

Sus.
Div.

c,

We

©

Bama
Par.
Bills: Clayton Bill: section 9 ......... cece ee cec cence es 60, 64
SECHON WO: Sitev- nk cea mee iesaig 66, 67, 68
substitute notable for new proposal in
SCCHON Bic ac ostasee cece ra sk anew aes 1
“unfair competition” ....43, 44, 45, 46, 47
S. 4160: introduced by Newlands................... 1
reported favorably by Interstate Commerce
COMIN. -scvesas came Pee ckk pies eRe ee 2
substitute for bill H. R. 15613............. 2
Bookss -Eésseltnrs. Digest ws as45 s4.achaevacege ange qusannlvandion 46
Hopkins on the law of trade marks................ 46
Nims on the Law “Unfair Competition”............. 46
Paul on the Law of Trade Marks................. 46
Singer on Trade Mark Laws................0.0000 46
Bureau of Corporations: superseded by Trade Commission.. 22
employes, funds, records, property,
Quarters, PASS 10. css. vewwnsavse
Business: of corporation, correct entries and records...... 67
instructions for, by Commission, Cummins...... 48
Buyer or lessee: unlawful agreement exacted from........ 42
Canal Zone: “Commerce” does not embrace trade with...... 30
Certificate: Commission might issue stating whether proposed
agreement operated in undue restraint of
trade, Lippitt Amendment .................. 18
Circuit Court of Appeals: Administrative orders of Trade
Commission enforcible through 34
Commission may apply to for en-
forcement of order by injunc-
tion in any circuit............ 52
jurisdiction to enfotce set aside
or modify orders of Commis-
SION dieaecarwaame Bie oullenes 60
jurisdiction to hear and enforce
Commission’s orders trans-
ferred to by Conference Report 19
proceedings of Commission take
precedence over other pending
CASES: savas cadena ¥ thes oe aaeE 56
record of hearing filed in....... 52
Civil service: employes of Commission subject to.......... 21
Clerical errors: punctuation wrong in Trade Commission
MO acssekauea te weer ae ew ee gad wean de aeealek 32
Code: business code, Commission not authorized to draft.... 47
Commerce: between states and territories defined.......... 30
“commerce” of the corporation subject to regu-
lation and not the corporation merely...... 41
rule of conduct for unfair competition in ‘Cum-
MINS® cutiwonskiennances causa a ae Rue etapa 44
Committees: Interstate Commerce, House ................ 1
Interstate Commerce, House, Covington meas-
WGES: HELEFEd: tOsc608 cacao siuniwen Fate Sale 1,8
Interstate Commerce, House, does not favor
sections 9 and 10 to bill proposed by Stevens,
New Hampshire «yo cccve eigsannitgsvn.edsniescen 11
Interstate Commerce, House, H. R. 15613 re-
POEM AKON” 2.26 ir8aecne ue Aecaiean & eiea eacneee 1,8
Interstate and Foreign Commerce, House and
Senate, Clayton and Newlands measures re-
HEEGE HO 2 wioaisaentaha shaeer ees. « womund ose SNES. bea e
Interstate Commerce, Senate, attachment of
proposal to Newlands Bill.................. 13

54

Sus.
Div.

ow

c, d
Par.
Committees: Interstate Commerce, Senate, discussion Stevens
Bill DrOVaSiOn  yescpecisaics-a.ahdeenccoss 5 elecealtaig oare 13
Interstate Commerce, Senate reports amended
Newlands Bill as substitute for H. R. 15613. .2, 10
Rules: rule reported in House fixing debate.. 1
Common Carriers: Commission is not to exercise its powers
ONE R e.caen g:(aezs ar ar aie eho nantes yenetann tues) eim Tact Ala abed 29
fa punctuation error in sentence mentioning 32
Competition: elimination of competition.................... 42
lessen competition .............00.... eee ee 42
“untair methods Of: . 5. siwsuacas or seeaedamaanss 34
: See also unfair methods of competition.
Competitor: By nature of business and location of opera-
HONS: co anduaundnes apace, oo pada d ehamlacs 42
COMMOMItIES: OF -,2.5 92,08 a valetaamem amin 2 ya Sores 42
inter-corporate share-holdings in corporations,
iy COMPELITORS! vert le ccacrarcds od sean chante ue x Gennlatteces 42
Complaining Parties: entitled to relief............. ...... 3
Complaints: charging “unfair methods of competition,”
how brought to attention of Commission.... 51
may originate with agents Commission........ 51
procedure and method of serving............. 62
Conference: conferees, House forced substitution of the
term “unfair methods of competition”...... 19
House and Senate conferees named........... 3
Nature: Of TEPOTt v6 sec gian cease eeyes oe 19
provision placed in Senate Bill eliminated in.... 65
report adopted by House..................--- 19
report received by House and Senate.......... 19
report submitted to House and Senate...... 3, 19
Senate agrees tO 2.2... cece cece cece e eee e eee 3, 19
Congress: direct Commission to investigate alleged viola-
tions of Anti-Trust Laws..................00. 35
power to regulate corporation engaged in com-
PERCE. sys ociad ora Sie onde paar oa Re Rare aUa cad 41
recommendations to Congress made by Trade
GOMMISSION voce tension hice ka Oeeeass nae 4
report of foreign trade submitted to with recom-
Mend ations} —sacsexeansemense ees ered eeedee ws eed 35
reports annual or special made to, by Commis-
sion with recommendations for legislation.... 36
Constitution: guarantees fourth amendment provide for cor-
porations the same protection against unrea-
sonable searches and seizures that it does to
an ANGiVUAal a. sescaeliacesacda, sie tear ome ees 41
guarantees of fifth amendment do not apply
with equal force to corporations.........-.. 41
Contempt: disobedience of subpoenas ............ sida Botan 60
for refusing obedience to order of district court.. 66
Contracts: exclusive tying contracts..............+-- 15, 34, 42
Contumacy: Cases Of co... cece eee e eee eee e eet eee e eens 60
contumaceous WitneSS ........ cece eee eee 66
Corporations: defined ........ eee eee cece cee eee teens 30
agents of Commission to have access to docu-
mentary evidence .........-.-..000- eels 85
alleged violation of Anti-Trust Acts investi-
ated | saasax e034 seo sah sade See EMRE Yes 35
Classify acisiag alate epiee 22 Syaee elimawnn eS 12. BB
compile information of operations and require
reports Of ..... i cece cece eee eee tnee 35
neglect to file reports ..........e eee ee ee eee 68
records, false entries in...........eee eee eee 67

55

Sup.
Div.

wwe

we
Par.
Corporations: what “persons” includes in Clayton Act...... 30
Courts: may adopt or reject an advisory suggestion of the
Commission | x22 cin esnass Gerrans gate had em Zs 36
appeal to courts, manner and character fixed....52, 53
appeal to, to enforce Commission's orders against
Al HOCAIGHBAUE: oiceiacs sajuecs dulera draatenagana ‘a ate tiie gasnanepewtaes 57
appeal to, to have order Commission set aside...... 53
appropriate court obtains jurisdiction.............. 52
final: ‘decrees: issued bys scxece sy apes sea ece ee sane 37
grant leave to adduce evidence .................... 54
pudgment and order final... ccc6 ced rane dedi b.o8 Gone 55
JUFISHICHON ccyaaameninescaak tay sae eRe aes oa aes 60, 61
judgment may be reviewed in discretion Supreme
GONE way es oars Aaaeaeniadeeydmeee dia werees pe 35
order not admissible as evidence. ................00% 65
order does not relieve from liability under Anti-
TEPGSt AGES? coca watecnomav sy conaemd oA Rae EAS HOR OS 65
refer an inquiry to Commission .................-- 36
review application of term “unfair competition”.... 46
Court Review: character of .......... 00 cc cece eee e eee eee 58, 59
findings of Commission binding upon court.. 58
form made more definite ................... 19
question of law distinguished from question
of facts open to examination ............ 58
question raised upon review of Commission's
OR GGT ef ABA (apart teva, 9 Celeste, sence ere i ok 59
Customers: Commission not to publish names of............ 37
Debates: on H. R. 15613, May 19, 20, B41, 22. 0... .2ccc0ceea 1,8
on new proposal section 5, S. 4160.............. 11
on term “unfair competition” ................... 44
Decree: final, investigate and report manner carried out.... 35
Defendant Party: appeal to court from Commission's orders 52, 53
service Of ‘process OM sasius:eyee40a deauees 62
rights of, court review deals with........ 58
statute fixes no time limit for appeal from
Commission’s order ............e ee eee 53
Definitions :
Trade Commission Act:
“Anti-Trust Acts)” srskesa cesgad so omens oyeGn Fo ueanes 31
P*COMMIMENCE? «ss nee gop .4 apeohene ace neoebudlnnai deus adeno n Aen dchle 30
“CORPORATION gov avait clea wide txeclelah bac Guat aimentadies 30
“Doeumentary, Evidence? acciwrg cage iaa we yeed seated 31
“Tam umitye” ne cx wana aaesewes Aaron Seen s Te eee ae aaa 64
“Unfair Methods of Competition”:
Reed Amendment defining, rejected............... 43
Guimmiis” SUPFESHON. co: sncscccsaseaeeeseus ened 43
Cummins declares meaning identical with “unfair
Competition” jsxewiens bvaceons eeu oe cee ee kaa 42
Five amendments defining failed in Senate ........ lee
Waews: Of Senate Cities: cise ace ananesy aac s seasons 17
Specific forms of defined in Clayton Act........ 42
Meaning must be gathered from Commission and
COUTTS” OPMNION) s5hcc seis Gow ad Panne eceers deans 46
Clayton Act:
SIREFSONS: — xivdt oath ia5ceeawa-vat pacmkeceuia huhae tone 30
“Unfair methods of Competition”:
four specific forms prohibited .............0.000 05. 42
“Unfair Competition”:
Coninion law meaning ccas pace saw igbas nado cas eg 17
Means same as “unfair methods of competition”’ says
Senator Gurniiins oy geves cys aaa ge vapiamianaete wae ale 45

Sus.
Div.

1-3

f,g,h,i
14

1-2-3-4.
Sus.

Definitions : Par. Dy.
“Unfair methods of competition” substituted for, in
CONLELENCE:  wacterda wick nme ee ey sees cneden eas ee 19
: _List of authorities on........... 0.00. cee eee ee Footnote, page 17
Depositions: Commission may compel and take............ 34 4

Distriet Attorneys of U. S.: prevent or restrain violations of
Sections 2-3-7-8 of Clayton

PCE Srila einen ued eye ae 61
District Courts of U. S.: contumacious witness becomes sub-
ject to order of................ 66
jurisdiction to enforce subpcenas
of Commission ................ 60
jurisdiction to issue writ of man-
ate nisiw nota ueae mine agen 6 60
violations Clayton Act prevented
and restrained through......... 61
Docuniletitary "Evid ene: casos cow cnbhawias saa unacewthineadeke 3
Forfeit: $100.00 per day for failure to file “corporation”
PEDGHS. occas ceysaehed du ia cioen4s wee new ub weet 68
Hearings: further hearings by Commission permitted...... 54
notice of by Commission .............0.0 0. eee ee 34 1
place and time of hearing fixed thirty days after
service Of Complaint sis. sacias dlaueieeverans 52
record of, filed in Circuit Court of Appeals...... 52
Injunctions: Commission’s orders enforcible by..........52-57

private individuals may have under Clayton Act 61
Inter-corporate Shareholding: Senator Cummins’ proposal.. 16

made unlawful .............. 42 3
Interlocking Directorates: made unlawful ................ 42 4
Investigations: Power of Commission to make............. 35 (2,8, 4.5
6,7
publicity with regard to.................... Die- «SILO RS:
Jurisdiction: of Trade Commission: over “persons, partner-
ships and corpora-
tionS” a naeees 29, 40, 61
over “corporations” 30,
40, 60
of District Courts: to enforce Commission’s
subpeenas .............. 60
to issue injunctions under
Clayton Act ........ gene OM
of Circuit Court of Appeals: to enforce and re-
view Commis-
sion’s orders.52, 60
not exclusive to
enforce Commis-
sion’s orders... 60
of Supreme Court of United States: to review
judgment
of Circuit
Court of
Appeals 55
Men referred to:
Adamson: House conferee ........--- Le Hiss se pois OB ai
Attorney-General The, of the U. S.: application, district
court, for writ of mandate ........-----. sees eeees 60
direct Commission to investigate ........-.+-++++e> 35 5
direct prevention of violations of Clayton Act through
district COUTTS 12... cece eee eee e eer tette ene 61

request Commission to investigate and recommend a
readjustment of operations of any corporation
alleged to be violating Anti-trust Acts..........-- 36

w

57
Sus.

Men referred to: Par. Dy.
Bartlett: Point of order Stevens amendment House
Trade Commission Bill ......... 0.2... c cece eee eeeee 12
Bathrick: motion of, for ayes and nays on Trade Com-
mission, bill: Vesanewes wees iecker aka Weak Ee aae aes 3 d
Brandegee: gives history of “unfair competition”
amendment to Newlands bill ...................-00. 13
Glapps Senate conleree: waw0rcccisawdseaacse iv se cavers 3 a
Glaytow: He R. 12120 introduced bys. ssxaccersseeesy oe 1,7 b
Colt: inquiry as to amendment of 5th Section, New-
Wands: Bill .2.0..4.2 4 wadcsdancanadiese tad detain dna sea dane Sa aegis 13
Covingtoi: House confereé 2... 066.6. besseasacac eas ee 3 a
H, R. 14631 introduced by... sccc se carccees cane geen ge 1 c
H, Rs 15613 introduced bys asccecns: aoe. scan goueer es 1,8 d

Cummings: attempt to incorporate in Trade Commission
Bill a prohibition against competing corporations

“holding” as well as acquiring stock.............. 16
author of amended section 5, Senate Trade Com-

mission, Billo: siac¢.22 s.due@e rye cae ene eee eee Reed 43
described the manner in which Board would apply

term “unfair competition” .............-...2000- 45
discussion conference TEPOLE wisiee hats @ Grand eae a 4a.8 43
expresses view of opponents of fixed definition of

term “unfair competition” ...........-.-..0000 eee 44
proposed substitute for section 5, Trade Commis-

SIGH Bail eidctas coe eh acres sia BROS eG Aree Oe 16
SEHAtE LCONTEREE “as vchanniaseen bid wassaainnauy meinen 3 a

Davies: elected Chairman Trade Commission......... 23
nominated, confirmed, took oath..................00- 23
Esche House conierée: 2444 nusains yeeadtaa is meeeieeas ees 3 a
Harris: Member of Commission ............00000eeee 26
nominated, confirmed, took oath ................00. 23
Hurley: Member of Commission ...............0-005 25
nominated, confirmed, took oath...............-..4. 23
Lippitt: amendment > 24.10 scnawpis ¥oaacate save peh ese aeas 18
Mann: points out error in Trade Commission Bill.... 32
Newlands: Bill reported favorably in Senate.......... 2,10 a
Senate: COnleree cc uu via puatewsedsdanphdinwweeseacans 3 a
Senate 4160 introduced by..........cc ccc cece ee eee Vet b
Parry: Member of Commission..............0--00005 27
nominated, confirmed, took oath.................... 23
Pomerene: Senate conferee ........ cc. cece cece ees 3 a
President, The, of the United States: approved bill 3,19 e
members of the Commission appointed by.......... 20
may direct Commission to investigate alleged viola-

tion of Anti-Trust Acts 2. cscscsseussasasegiessas 35 4
may direct employes Government departments to

ASSIST GOMMISSION, 4 csiene cs ce deuce waecdaaee La Ad a bso 35 w
recommends creation of “Interstate Trade Com-

MUSSION™ (etude pa doewye accsewan Maeisleatacn see's Meum 1,6. a
recommendations made to, by Trade Commission.... 4
nominates Trade Commissioners ...............20-5 23

Reed: amendment by, defining ‘unfair competition”
failed ‘ity Senate saccseses aiieiw Sasea lenygte Manin we NN 17
definition of “unfair competition” ................. 43
Rublee: Member of Commission .............0..+000 28
Nominated, -tOGl: Oath: aiciececese occ. 2504 Virtraniereianae ets erasers 23
Salisbury: Senate conferee ......... cece eee cence eee 3 a
Sinise Ouse conteree! cajveso cadens Addadairseonaeegue 3 a
Stevens, Minnesota: House conferee..............0005 3 a

58
Sus.

Men referred to: Par. Div
Stevens, New Hampshire: proposal by, germ of 5th sec-
tion, Trade Commission bill..................0.... 12, 13
proposed substitute for section 11, of House bill. .4, 11 i

Stevens bill provision, engrafted upon Newlands bill 13
Walsh: opinion of administrative power given to

; Trade Commission ...........0..00c0eccee eee eeees 49
Misdemeanor: false entries in corporation records........ 67
false statements in reports to Commission.... 67

for officer or employe of Commission to make
public information obtained .............. 69
refusal to testify in response to subpcena.... 66
refusal to submit evidence.................. 67

remove documentary evidence from jurisdic-

: tion of United States................0.04. 67
Perjury, punishment £00 6. sccsstee coe s ayecgacsnre dee hea ect 64
“Persons and Partnerships” when subject to Commission.... 40
Philippines: “commerce” does not embrace trade with...... 30
Porto Rico: “commerce” does not embrace trade with...... 30

Price Discrimination, by “persons” forbidden where effect of
such discrimination may be to lessen

competition or create monopoly.... 42 1
penal clauses relating to, struck out of
Clayton Bill esc tnad veceeeawaes 15
prevented by Trade Commission...... 34 2
Procedure: for enforcement of Sec. 5 of Trade Commission
CEs ConA a AUN aN oA ae rca tered Na, 2 51, 52, 53, 62
for enforcement of Secs, 2, 3, 7, 8 Clayton Act
by Commission ................ 34, 50, 51, 52, 61 2
Production of Evidence: Commission’s power to compel. ..34, 35 3
Proof of Service: how made ............e ccc cece eee eee 63
Publicity: Commission is authorized to make public reports
and proceedings ............cccecee cece eeeeue 37) «1, 2,3
Searches and Seizures: unreasonable, fourth amendment of
Constitution ...............e eee 41
Self-incrimination: compelling, guarantees of fifth amendment
of Constitution, respecting ........... 41
Seller: exclusive tying contracts by, unlawful............... 42 2
Subpcenas: district court given concurrent jurisdiction to
enforce those of Commission ................ 60

refusal to testify in response to, a misdemeanor.. 66
Summary of Legislative History of Trade Commission Act. .1, 2,3

of Powers of Trade Commission...... 34, 35, 36, 37, 38
Supreme Court: review of judgment and order of Circuit
Cotitt of Appeal «ci siucdnecedve daease de 55
Testimony: power of Commission to compel..............- 34 3,4
no person excused from testifying ............. 64

testimony at hearing of accused taken in writing 52
Trade Commission: act does not authorize Commission to
advise applicants what does or does not
constitute “unfair methods of competi-
OR” Gusshwnekwexte ws eud ae kararwiad 47
act does not authorize Commission to
draft a business code of forbidden con-
UGE sane Mas doac-c4 a PeNeeSEe REO Ne ae Oe 47
to take additional evidence on appeals.. 54
administrative body ....... Sitionenntie. 30: 4
may adopt rules and regulations to carry
Out PproviSioOnS ........2.. ee eee ee eee QL
advises Attorney-General as to readjust-
ment of operation of corporations on
TEQUESt Loe cece eee eee eee eee teens 4
advisory powers ..... [reese neers tenes 18

59
Trade Commission:

Par.
aids enforcement, Anti-Trust Acts...... 4
appropriation $300,000 for 1915...... 22
“clearing house for facts” ............ 6
compel filing annual or special reports
by “corporations” ................00- 68
complaint, fix form and serve........ 52
conference House and Senate on bill
CREATINE aanenawcngan £04 ommigan eect st 3
conference report submitted House and
Senate: nice (oueaae mes dG wae elasnaw 3
consideration of agreements intended to
affect commerce ...........-0..0006- 18
constituted of five members .......... 20
creation recommended by President of
United States. cies seed ax statin sce a 1,6
Cummins’ opinion of advisory powers.. 48
difference in Commission created from
Commission originally proposed ...... 5
directed to prevent “corporations” from
using “unfair methods of competition” 11
duty of Board to consult decisions of
the courts, etc., to all of which make
up understanding words “unfair com-
POHUIOM acu dcdoeeticce see anes mms 45
duty of Commission to apply words “un-
fair competition” .................00. 45
employes of (exception) subject to civil
SCRVICE NM) 5s cis aden ia coaek ddepemaunes 21
enforcement of other statutes unaffected
by Trade Commission Act............ 70
enforces section five of Trade Commis-
S101 ACE yen eng a Sy trae HER Paved raensuncalees 61
members may engage in no other busi-
MESS... acter ton ae aalgn G mahguiue We Deecduaun Neue hoes 21
exercise powers at any place............ 22
exercise powers over persons, partner-
ships or corporations engaged in com-
merce except banks and common car-
PUES! ei chs eine Se scnun ele Aes donned lenses et 29
may make findings and recommenda-
tions for modifications of original
order after hearing on appeal........ 54
free to fix own forms and_ procedure
(exception) ........cc cece cece cease 50
gathers, compiles and publishes informa-
tion, on operation of corporations.... 4
House Bill differed from the measure
which passed Senate ................ 9
a misdemeanor to refuse to submit evi-
GOMES 16) succuinds aba jin eves anemia oe 66
instrument of. information (President’s
MESSAGE)! y vixd Kaaciticed suawacr mance on 6
investigate and report manner final de-
crees are carried out................. 35
investigate operation corporation as re-
quested by Attorney-General......... 47
investigate trade conditions in foreign
countries including practices affecting
HOREIRT CAME ciriiioek sos ceeusaunas as 35
investigations alleged violation Anti-
Etust:aws + vavevigpwiied ceasbe nant 4+ 4, 14

Sus.
Div.
Trade Commission :

investigatory and inquisitorial powers
confined to “corporations” engaged in
commerce
jurisdiction
jurisdiction to hear and enforce orders
of transferred to the Circuit Court

Sus.
Par. Div.

BS vrelal cel clogs 29, 30, 40, 61

of Appeals :.4 vse tayces anes ote « 19
measure H. R. 12120 providing for

creation of, introduced by Clayton... 1 b
measures H. R. 14631 and H. R. 15613

providing for creation of, introduced

by Covington. cie.ieeevesereeceenees 1 c,d
measure H. R. 15613 reported favorably

to the House ............ 00.0. e eee 1
measure H. R. 15613 debated.......... 1 f,g,h,i
measure H. R. 15613 passed House.... 1 j
measure H. R. 15613 referred to Com-

mittee, (Senate: 2 ..acceigssaaeeeawete 2, 10 a
measure S. 4160 providing for creation

of, introduced by Newlands.......... 9 1 b
measure S. 4160 reference to,.......... 2a,b,¢d

3 a
10, 11, 13, 14, 16, 18, 19, 20, 22, 32
members removable by President...... 21
“narrow” court review of orders of.... 16
obtain information in possession of other

Government departments and have as-

sistance of employes of such depart-

WETS. cna s coma. deeegukesmes eee. 35 a
office in Washington ................--. 22
opinion, court cannot substitute its opin-

ion for that of Commission ......... 58
opinions of the Commission interpret

broader meanings “unfair competition” 46
order, enforced against a recalcitrant by

appeal to courts ...........6. eee e ee 57
order, issues and serves order directing

party to desist from unfair methods.. 52
order, may modify or set aside........ 52
order, not “admissible as evidence”.... 65
order, does not absolve from liability

under Anti-Trust Acts............... 65
order, policy or expediency of, court can-

NOt: CONMSIder 244 vases venisean sae saan 58
order, review of, question raised upon.. 59 1,3
petition filing of ........-.- see eee ee 52
power of Commission, court review deals

With. sys eine fs Mae Ragen eee as 58
powers and duties grouped under five

heads:. cccanaapenmevee aeedve mee nse 33
advisory powers Of ....-..-.- sees eee 36 1,3
powers and duties, investigatory....... 35 Tee
powers and duties, power of publicity... 3 13
powers and duties, powers to establish

procedure ...... eee eee ee ee eee eens 38
powers and duties, semi-judicial ...... 34 1,4
to prevent acts constituting “unfair

methods of competition” ....... Pew 4,16
prevent corporations engaged in com-

merce from using “unfair and oppres- .

sive’ methods, Stevens’ amendment. 1 i

61
Sus.

Par. Div.
Trade Commission: proceedings to prevent “unfair methods
of competition,” two requisites neces-
SALTY? dase Rtabsaanirar gs Mac nenes arenes falas 51
procedure in preventing “unfair methods
of ‘COMpPCHiHON” wcis ceeded ewes Ox 50, 57
may prosecute its inquiries through any
Of its nrembers sans: gesncsaxsded reas 22
qualified to have referred to it by the
court an inquiry for the purpose of
ascertaining and reporting an appro-
priate form of decree ............... 36 3
report foreign trade conditions to Con-
gress with recommendations......... 35 6
report required, false statements in, a
MUSAEMCANOL ceasea ed oxides damier 67
salary of Commissioners .........-.... 21
S€rvICe Of PFOCESS asc ciccvisivengres cs 62, 63
to prevent specific practices forbidden
by the Clayton: Act 4 2.2065 deena 6 40
study trade conditions with foreign
countries -and make recommendations
to Congress and the Executive...... 4
succeeds to employes, etc., of Bureau
of Corporations .......... eee 22

suggests form of final decrees in anti-
trust suits upon judicial request and
inquiries into such operation of decrees 4, 14

supersedes Bureau of Corporations..... 22
term of office of members.............. 20
festiniGny BEfOLE. .os52 ce gscteess sq e ees 64
visitorial powers, exercise over business
and records of corporations......... 40
Trade Secrets: not to be published ................2.....4. 37 1
“Unfair Competition”: application of the term “unfair com-
petition” in the common law...... 45
change to “unfair methods of compe-
tition” in conference.............. 43
Commission not authorized to advise
what constitutes .............-.5. 47
declared unlawful ................. Ad i
defined by, opponents of a fixed
GEMDIHOMy bs nk decd aa ni ceeulae uane« 44
definition efforts to insert in Senate
Bill defeated: voncsg tetany xia svag 43

germ of this proposal found in 9th
and 10th sections of bill proposed

by Stevens, New Hampshire...... 11
guilty of “unfair competition” in

commerce, no man shall be...... 44
inhibition against “unfair methods of

COIMPCtIHON’ npc caasea echo eed ae 51

House conferees forced substitution
of term “unfair methods of com-

petition” for “unfair competition”... 19
manner of application by board de-
scribed by Cummins.............. 45
no definite guide to know what was
forbidden. <.scssasanessseescet oe 17
opinions of the Commission interpret
broader meanings in act.......... 46

62
Sus,

A . a, . Par. Div.
Unfair Competition”: prevent unfair methods of compe-
tition by issuing administrative
OLdeTS- sais saa Gubeveia dae hbenon 34 -1
prevention of “unfair methods of
competition,” evidence for........ 40

proposal Stevens, New Hampshire,
slightly changed incorporated in
bill reported to Senate ........... 13
proposal Stevens, New Hampshire,
in House, prophesied to become
part of measure in Senate ........ 12
“Unfair competition” and “unfair
methods of competition” mean the
same thing—Cummins ........... 43
“unfair competition’ competitor
fraudulently passed off goods for
those. of another jee. cca ees 17
“unfair competition” defined to em-
brace acts, devices, concealments,

threats, coercions, etc. Reed...... 43
what are “unfair methods of com-
petition” which Commission is to
PTEVENE, Soscalas wig ead, Memeo ses wares 42
Vote: amended S. 4160 passed Senate..............00005- 19, 2 d
conference report House final passage .............. 3 d
conference report Senate final passage.............. 3 c
Hie: Ree d5618 passed; THOUS Accs estcovccnesadcasewaanadased aL 1
Witnesses: attendance of ........ 0.0... c cee cee eee nee 34 3
Weits: of: Mandate? isstiing! vcs aacujsess esauande eh jeagees es 60

63
1914

 

 

 

| ACT ~ OCTOBER 1S, 1914

 

 

 

 

 

SECM
| SEC.7 | SEC 8 FOR JURISDICTION
OF COMMISSION

|
SUPPLEMENTARY ANTITRUST ACT ~ OCTOBER IS, 1914 |
;

[ on order of court all government
ae erator’ = | sec 2 | | sec 3 ] | SEC 7 = | SEC 8 |
I

 

 

 

 

 

 

 

 

   

bebas retary departments and ss e
Dee Sec
bureaus to supply area Caen
in all records re-

 

 

 

 

 

 

 

 

  
  

    
 

  

- - or era
alsenimnination in lease, sale, fix share capital unlawful for person to be
price unlawful price, discount unlawful for director in two or more

  
 

or rebate unlawful
where effect. on condition, ag-
may lessen com- reement or under -

petition, tend create|

1

monopoly

corporation hold &
ee other corporations

after 2 years

if competitors and

elimination of competiti
would violate Antitrust Laws
director

lawfully elected
may continue one year

   
 
    
  
 

     
 
  

corporations

except investment

where the effect:
substantially lesseng
competition re-
strains commerce
in any section
or place, tends
to create monopoh|
in any line of
commerce

   

 

 

 

     
    
 

      
 

   

purchaser not
to use or
deal in

competitors good

where effect
substantially
lessens competition,
tends to create
monopoly

between purchase

 
 
 

 
 
  

    
 

 

 

except on account

of difference in

grade, quality or
quantity

       
 

 

 

   
 

 
 

 
 

 

 

 
 

 

   

any one of which

  

 

has capital, surplus

and undivided profits
in excess of one million
ollars

 

 

 

 

 

 

\

| Parties aggrieved or threatened may enjoin violations anywhere (Section 16) |

 

OUTLINE OF POWERS AND PROCEDURE
FEDERAL TRADE COMMISSION

Prepared and Copyrighted, 1914, by Nathan B. Williams, Esq., Washington, D, ¢.
and used by his special permission.
 

 

FEDERAL TRADE COMMISSION ACT ~ SEPTEMBER 26,

(DOES NOT ALTER, MODIFY, REPEAL OR PREVENT ENFORCEMENT OF ANTITRUST ACTS)

 

 

 

FEDERAL TRADE COMMISSION

 

 

 

C.5 (See also Sec 9) |

+ 15,1914
Procedure

 

service

 

 

verified return

 

 

 

return PO receipt

 

 

 

L

A

CORPORATIONS~ SEC.6 [See Sec 7698 ~Act Oct 15,1914]

°

On

i

 

Gather and compile
information
and investigate

 

 

 

organization
business
conduct
practices
management

Investigate
manner
final decree
for violating

   

on application of
Attorney General

  

 

   

classify
corporations

  

Antitrust Acts
is

make recamendatia
for readjustment
of business of

  
 

  
  

make rules
carry out act

 

carried out

 

 

 

 

 

 

 

 

 

 

by delivery person
by leaving tnember of firm
by registry corporation

 

 

 

 

*porations. |

vy Apparent conflict of jurisdiction.
2, Extent of power Is not defined.

corporations
engaged in
commerce

except banks and
common carriers

 

and relation
To other

corp.

 

rations

 

|

 

mandatory
when requested
by Atty General

 

 

 

report findings
and
recomendations}

 

 

 

 

corporations

individuals

associations
artnecships

 

 

 

 

 

 

corporations
to file
general and
special reports

 

on request of
President or
either House of
Cong

 

 

 

 

 

 
 

investigate and
report facts

concerning violat -
ions Antifrust Act:

   

 

 

 

where and
as prescribed
by commission

 

annual and special
reports

 

 

 

 

 

 

 

made public in

    
 
   
       
 

 

 

Publicity |

 

 

 

 

 

discretion of Com

 
  

 

 
   

except trade
secrets and
names of customers

 

 

investigate ti
condition:
foreign coun
 

 

 

 
    

      

may request
Atty General

 

 

 

 

[ UNFAIR METHODS OF COMPETITION ~

Com:

 

t
or comply mitnaaf for oor to ree al

 
 

on failure to
Obey

Judgment or order

  

 
     
     

‘findings of facts
are conclusive

‘on notic.

 

 

certify and file of Appeals

 

Commission H Circuit Court

 

transcript all

testimony,

report and
order

 

 

 

decree on notice
to defendant

 

proceedings
given preterence|

 

      
  
 
 
  

im circuit where
defendant uses
method, resides
or carries on
business

 

 

 

 

 

 

be reviewed

a

 

 

affirm, modify
or set aside

Commission

except
Supreme Court
does not
absolve defendant]

order of

 
   

 

 

 

 

 

ae from prosecuti

” ae ‘ under Antitrust A
on

Commission

 

 

Hearing

 

   

See Sec 2 and 3 ~ Act

  

Intervention

Person,
Firm,
Corporation

  

 

 

 

 

 

| oepostions i Testimony

must be in
writing and filed

 

 

      

examiners
May receive

agents
may examine
and copy books

 
        

Commission
has
power

 

 

 

before
designated party

 

compel productio
documentary
widence

authorized to
administer oath

 
  
  
  

  

subpoena

witnesses
paid court fees
who must testify
or punished
invoke aid anywhe:
US Dist. Courts