Attacking the patent rights of competitors.

Encouragement of other tactics of an unfair and unlawful nature.

10. By applying ... for letters patent of the United States, in some cases upon the cash registers of said competitors and in other cases upon improvements upon such competitive cash registers, and this merely for the purpose of harassing such competitors by interference proceedings and suits and threats to institute such proceedings and suits; and

II. The using of, or originating and using of, and the instructing and requiring of such agents and sales agents of said the National Cash Register Company to use or to originate and use, such other unfair, oppressive, tortious, illegal, and unlawful means, unlawfully, wrongfully, and irresistibly excluding other concerns beside said the National Cash Register Company from engaging in said interstate trade and commerce, as might at any time become, or appear convenient.

Evils of trust development give

trust legislation.

In 1890 the Sherman Anti-trust Act declared illegal all combinations in restraint of trade.

160. The Sherman Anti-trust Act of 1890 1 Though it did not begin until about 1880, trust development proceeded so rapidly that within a few years the trust device had been adopted in a considerable number of important industries. Very soon the unfair practices of the trusts gave rise to a demand for restrictive legislation. One result of this demand was the enactment by Congress of the Sherman Anti-trust Act of 1890. Practically the full text of this important measure follows:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SEC. 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.

1 From the Statutes of the United States, The Federal Anti-trust Law. July 2,

SEC. 2. Every person who shall monopolize, or attempt to monop- Monopoly

forbidden. olize, or combine or conspire with any other person or persons, to monopolize 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 punishments, in the discretion of the court. SEC. 3. Every contract, combination in form of trust or other- Geographi

cal scope of wise, or conspiracy, in restraint of trade or commerce in any ter

the act. ritory 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 Columbia, 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 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. 4. The several circuit courts of the United States are hereby Relation of

the courts invested with jurisdiction to prevent and restrain violations of this

to the exeact; and it shall be the duty of the several district attorneys of the cution of

the act. United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations.

SEC. 5. Whenever it shall appear to the court before which any proceeding 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 district in which the court is held or not; and subpænas to that end may be served in any district by the marshal thereof. SEC. 6. Any property owned under any contract or by any com- Provision

for the forbination, or pursuant to any conspiracy (and being the subject

feiture of thereof) mentioned in section one of this act, and being in the course property. of transportation from one state to another, or to a foreign country, shall be forfeited to the United States, and may be seized and con

Legal rights of injured parties.

demned by like proceedings as those provided by law for the for-
feiture, seizure, and condemnation of property imported into the
United States contrary to law.

SEC. 7. 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 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.

The words
“person”
and
“persons”
defined.

years, the

in 1911.

161. A great trust ordered dissolved 1 Ineffective The Sherman Act was designed to curb the illegal activities of for twenty

the trusts, yet during the first twenty years of its existence, the act Sherman was largely a failure. Occasionally the law revealed elements of Act proves

strength, but it was not until 1911 that it really proved to be an efits strength

fective weapon against monopoly. In that year the Supreme Court
of the United States ordered dissolved two of the greatest trusts
in the country, the Standard Oil Company and the American Tobacco
Company. In its decision in the case against the latter trust the

Court concluded as follows:
The Ameri- [In the disposal of this case,] we might at once resort to one or
can Tobacco the other of two general remedies
Company
ordered dis- (a) the allowance of a permanent injunction restraining the com-
solved in

bination [and its constituent parts] from continuing to engage in

interstate commerce until the illegal situation could be cured ... or ible reme

(b) to direct the appointment of a receiver to take charge of the dies are rejected by assets and property in this country of the combination in all its the Supreme ramifications for the purpose of preventing a continued violation Court.

of the law, and thus working out by a sale of the property of the

1911.

Two pos

these pro

combination or otherwise a condition of things which would not be repugnant to the prohibitions of the act. But having regard to the principles which we have said must control Reasons for

rejecting our action, we do not think we can now direct the immediate application of either of these remedies. We so consider to the first because posed reme

dies. in view of the extent of the combination, the vast field which it covers, the all-embracing character of its activities concerning tobacco and its products, to at once stay the movement in interstate commerce of the products which the combination or its coöperating forces produce or control might inflict infinite injury upon the public by leading to a stoppage of supply and a great enhancement of prices. The second, because the extensive power which would result from at once resorting to a receivership might not only do grievous injury to the public, but also cause widespread and perhaps irreparable loss to many innocent people. Under these circumstances, taking into mind the complexity of The decision

of the the situation in all of its aspects, and giving weight to the many

Court: sided considerations which must control our judgment, we think, so far as the permanent relief to be awarded is concerned, we should decree as follows: First. That the combination in and of itself, as well as each and The Amer

ican Toall of the elements composing it, whether corporate or individual,

bacco Comwhether considered collectively or separately, be decreed to be in pany violates

the act of restraint of trade and an attempt to monopolize and a monopoliza

1890. tion within the first and second sections of the anti-trust act. Second. That the court below, in order to give effective force to The trust

to be disour decree in this regard, be directed to hear the parties . . . for

solved and the purpose of ascertaining and determining upon some plan or reorganized

in accordance method of dissolving the combination and of re-creating, out of

with law. the elements now composing it, a new condition which shall be honestly in harmony with and not repugnant to the law. Third. That for the accomplishment of these purposes, taking Time period

within which into view the difficulty of the situation, a period of six months is

this is to allowed from the receipt of our mandate, with leave, however, in be accom

plished. the event, in the judgment of the court below, the necessities of the situation require, to extend such period to a further time not to exceed 60 days.

The remedy in case dissolution does not take place within this period.

Conclusion.

Fourth. That in the event, before the expiration of the period thus fixed, a condition of disintegration in harmony with the law is not brought about, ... it shall be the duty of the court, either by way of an injunction restraining the movement of the products of the combination in the channels of interstate or foreign commerce, or by the appointment of a receiver, to give effect to the requirements of the statute.

Pending the bringing about of the result just stated, each and all of the defendants, individuals as well as corporations, should be restrained from doing any act which might further extend or enlarge the power of the combination, by any means or device whatsoever. In view of the considerations we have stated, we leave the matter to the court below to work out a compliance with the law without unnecessary injury to the public or the rights of private property. ..

And it is so ordered.

Additional anti-trust legislation

in 1914.

162. Significance of the Federal Trade Commission 1 Notwithstanding the strength shown by the Sherman Act in effecting the dissolution of the Standard Oil Company and the American Tobacco Company in 1911, there continued to be agitation for additional legislation. It was thought that our anti-trust legislation should be more specific, and that it should deal more effectively with the early stages of monopoly. In the effort to secure these ends, Congress in 1914 passed two additional anti-trust laws, the Clayton law and the Federal Trade Commission law. Of these two acts, the latter is probably the more significant. The following are excerpts from the Federal Trade Commission Act:

SEC. 1. Be it enacted by the Senate and the 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 . . , 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