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COMMENTS.

CONDITIONS LEADING UP TO THE ENACTMENT OF THE FEDERAL TRADE COMMISSION

LAW AND THE CLAYTON LAW.

Notwithstanding the comprehensive character of the Sherman Anti-trust law and indeed because of its general terms there has been continual agitation for additional legislation with two main considerations in view: first, that the interpretation of the Sherman law should be made fairly certain and that business men should be afforded means of knowing with reasonable certainty in advance whether or not the law applied to a given state of facts; second, that the law should be made to deal more effectively with monopoly in its incipiency, or in other words with practices tending to create monopoly. Objection was also made that with regard to certain methods or practices the Sherman law was not sufficiently specific, and finally that court decrees when entered were not always effective in securing the relief that was sought. It may be assumed that it was the concurrence of Congress in these conclusions as to the operation of the Sherman law which lead to the passage of the Federal Trade Commission and Clayton laws.

Even in its most recent decisions the Supreme Court has announced no definite standard from which

1.-In Standard Oil Co. vs. United States, 221 U. S. 1, the Supreme Court says (p. 63): “The merely generic enumeration which the statute makes of the acts to which it refers and the absence of any definition of restraint of trade as used in the statute leaves room for but one

the legality or illegality of any particular action can be determined. That this doubt is well founded is shown by the reasoning of two trial Courts in recent cases, both of which had before them for interpretation the rule laid down by the Supreme Court in the Standard Oil and Tobacco cases. In United States v. Hamburg-American Steamship Company, 216 Fed. 971, and in United States v. International Harvester Company, 214 Fed. 987, each trial Court interprets these decisions to mean that only such restraints of trade as are unreasonable are forbidden by the Sherman law. But the two Courts diverge widely in applying the rule. In the Harvester case a majority of the Court says (p. 993):

"While the evidence shows some instances of attempted oppression of the American trade by the International and the America Companies, such cases are sporadic, and in general their treatment of their smaller competitors has been fair and just, and if the International and America Companies were not in themselves unlawful there is nothing in the history of the expanding of the lines of manufacture, so as to make an all the year round business, that could be condemned.

“The real question is whether the combination of the companies was illegal in the beginning, or became so with the addition subsequently made.”

conclusion, which is, that it was expressly designed not to unduly limit the application of the act by precise definition, but while clearly fixing a standard, that is, by defining the ulterior boundaries which could not be transgressed with impunity, to leave it to be determined by the light of reason, guided by the principles of law and the duty to apply and enforce the public policy embodied in the statute, in every given case whether any particular act or contract was within the contemplation of the statute.”

And in the case of the United States vs. American Tobacco Co., 221 U. S. 106, the Supreme Court says (p. 180): “Coming then, to apply to the case before us the act as interpreted in the Standard Oil and previous cases, all the difficulties suggested by the mere form in which the assailed transactions are clothed become of no moment. This follows because, although it was held in the Standard Oil case that, giving to

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