annual report for 1911 after the adoption of the plan of disintegration of the Tobacco Trust: "Whenever a final decree has been entered against any defendant corporation in any suit brought by the United States to prevent and restrain any violation of the antitrust 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 AttorneyGeneral it shall be its duty to make such investigation. It shall transmit to the Attorney-General a report embodying its findings and recommendations as the result of any such investigation, and the report shall be made public in the discretion of the commission. . . . "Upon the application of the Attorney-General to investigate and make recommendations for the readjustment of the business of any corporation alleged to be violating the antitrust acts in order that the corporation may thereafter maintain its organization, management and conduct of business in accordance with law. ... "That in any suit in equity brought by or under the direction of the Attorney-General as provided in the antitrust acts, the court may upon the conclusion of the testimony therein, if it shall be then of opinion that the complainant is entitled to relief, refer said suit to the commission 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 cases, 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." 1 About fifty-four decrees in equity dissolving combinations, have been entered in the various Circuit and District Courts of the United States, beginning with the decree entered June 17, 1891, in the Circuit Court for the Middle District of Tennessee against the Jellicoe Mountain Coal & Coke Company, down to and including the most recent decrees, namely; that entered January 20, 1916, in the District Court for the Western District of New York against the Eastman Kodak Company and others, and that entered in the District Court of the Eastern 1 Ibid. District of Pennsylvania on January 24, 1916, against the Motion Picture Patents Company and others. The combinations dissolved by these decrees were of infinite variety. They included traffic associations between railroad companies, such as those described in the Joint Traffic1 and Traffic Association Cases 2; combinations between competing manufacturers for the purpose of suppressing competition, such as that before the court in the Addyston Pipe Case; the control by one corporation of the capital stock of two competing transcontinental railway systems (Northern Securities Co. v. U. S.3); the control by one corporation of the capital stock of another competing railroad (U. S. v. Union Pacific 4); a combination controlling all the terminals in the city of St. Louis (U. S. v. Terminal Railway Association 5); combinations of wholesale grocers; of manufacturers of incandescent electric lights; of dealers in plumbing supplies; of manufacturers of kindling wood; of retail lumber dealers, having for their purpose the suppression of competition and the control of prices; combinations of owners of patents extending the monopoly secured by the Patent Laws beyond the scope of those statutes; pooling agreements formed for the control of the price of cotton, and various other contracts and combinations which on the evidence were held to constitute undue restraints upon interstate or foreign commerce, or an attempt to monopolize the same. In all of these cases, the decrees dealt comprehensively with contracts, organizations or practices which had grown up or had been formed between two substantial competitors in a given line, for the purpose of excluding competition or fixing prices, and by various conveyances, transfers, cancellations and dissolutions broke them up, and then, by injunctions forbidding specified acts, made provision against their renewal in the future. It only remains to consider the criminal provisions of the 1 166 U. S. 290; 1897. 4226 U. S. 61; 1912. 2 171 U. S. 505; 1898. 193 U. S. 197; 1904. statute. All of the acts which it declares unlawful are also made misdemeanors, punishable by fine and imprisonment. But while prosecutions have from time to time been brought to enforce these penalties, juries have shown great reluctance to convict individual defendants, and in the few instances where convictions have been had, the penalty of imprisonment has but seldom been imposed, and in every instance, but one, where imprisonment has been imposed by the court upon a defendant the judgment has been reversed on appeal. Such was the case of the prosecution of the members of the so-called Turpentine Trust in Savannah (Nash v. U. S.1) and the conviction of the officers of the National Cash Register Company in Cincinnati, Ohio (Patterson v. U. S.2). In the sole case where the appellate court affirmed the conviction which carried a sentence of imprisonment, namely, that of the so-called Night Riders in Kentucky, the President commuted the sentences and remitted the penalty of imprisonment. It is true that in a large number of instances, fines have been imposed and collected, and the liability to criminal prosecution undoubtedly has served as a deterrent, particularly in recent years, against conscious violation of the law. The decisions thus reviewed have demonstrated the Sherman Anti-trust Law to be an effective instrument for the accomplishment of the purposes which the national legislature had in view upon its enactment. It may seriously be doubted whether the so-called Clayton Law, enacted at the last session of Congress, has not, in its effort to add specific prohibitions to the broad general denunciation of unlawful restraint on interstate and foreign commerce embodied in the Sherman Law, really weakened the provisions of that great enactment. It has become a fashion of speech in some quarters to speak of the Sherman Law as having been a failure. That the policy adopted by Congress of seeking to prevent the arbitrary and far-reaching centralization of power over industry which was making 1 229 U. S. 373; 1913. T 222 Fed. 599; 1915. startling progress at the time of its enactment was demanded by a regard for the national health and welfare, hardly can be questioned; that the Sherman Law, mistaken as was the original conception of its provisions by some of the courts, halting and imperfect as for a long time was its application, in the light of modern interpretation has been made an effective means of enforcing the rule of competition, as against the rule of combination, can admit of no candid doubt. There is, of course, a certain borderland of uncertainty in its application. It may frankly be conceded, too, that in many instances healthy cooperation makes for the public welfare more than destructive competition. I have always thought that a different rule should be applied with respect to foreign trade and commerce than as regards domestic trade. When American business seeks expansion in foreign countries, it meets conditions over which it has no control. In many foreign countries the rule of competition has been abolished and state control of associated industry has been substituted for it. To send American merchants into fields so controlled, prohibited from combining for their own protection, is like sending ordinary State militia regiments to contend with the trained armies of France or Germany. But that the consideration which moved the statesmen of 1890 to frame the Sherman Law was a wholesome fear of the effect upon Republican institutions of the centralization in a few hands of control over American industry, appears to me to be beyond dispute. That the law they enacted has, through the construction finally given to it by the Supreme Court, achieved its main purpose now has been irrefutably demonstrated. THE FEDERAL TRADE COMMISSION AND THE CLAYTON ACT A Lecture Delivered before the Association of the Bar of the City of New York, by Gilbert H. Montague, March 22, 1916 THE Sixty-third Congress convened for its Second Session in December, 1913, with antitrust legislation for its chief appointed work. The Presidential campaign of 1912 had been largely waged upon the issue of trusts; and Mr. Wilson took pains frequently during the campaign to attack the Progressive party for tolerating, under its proposals of regulation, the existence and development of business units and combinations so large as to constitute substantial dominance in their respective industries. A Trade Commission, of some kind, was proposed in the platforms of the Democratic, the Republican and the Progressive parties. But the Democratic party, influenced apparently by the recommendation of the Stanley Committee which had investigated the United States Steel Corporation, proposed also a program of legislation, supplementary to the Sherman Act, which should specify and enumerate, in definite language, certain acts as ipso facto violations of the antitrust laws; and the Republican party, influenced apparently by the report of Senator Cummins from the Senate Committee on Interstate Commerce on antitrust legislation in 1912, and by the proposals for antitrust legislation that had been introduced and agitated by Congressman Lenroot and Senator La Follette, declared even more definitely for "the enactment of legislation supplementary to the existing antitrust act, which will define, as criminal offenses, those specific acts that uniformly mark attempts to restrain and monopolize trade." The refusal of the Progressive party to take such advanced ground in this direction, and the |