from the national forests for the construction of Government railways and other Government works in Alaska: Provided, That the Secretary of Agriculture shall submit with his annual estimates a report of the quantity and market value of earth, stone, and timber furnished as herein provided. [38 Stat. L. 1100.]

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[Construction of summer homes, hotels, etc., authorized.] That hereafter the Secretary of Agriculture may, upon such terms as he may deem proper, for periods not exceeding thirty years, permit responsible persons or associations to use and occupy suitable spaces or portions of ground in the national forests for the construction of summer homes, hotels, stores, or other structures needed for recreation or public convenience, not exceeding five acres to any one person or association, but this shall not be construed to interfere with the right to enter homesteads upon agricultural lands in national forests as now provided by law. [38 Stat. L. 1101.]

TRADE COMMISSION ACT.

See INTERSTATE COMMERCE.

TRADE UNIONS AND COMBINATIONS AND TRUSTS.

Act of October 15, 1914, Ch. 323 (Clayton Act), 267.

Sec. 1. Definitions, 267.

2. Discrimination in Price between Purchasers of Commodities, 268.

3. Requiring Purchasers, etc., of Goods, etc., to Refrain from Han

dling Goods, etc., of Competitors, 269.

4. Jurisdiction of Violations-Damages, 271.

5. Judgment or Decree as Evidence-Statute of Limitations, 271.

6. Labor Organizations, etc., Not within Provisions of Act, 272.

7. Acquiring Stock in Another Corporation, 272.

8. Interlocking Directors, etc., of Banks, 273.

9. Embezzlement, etc. - Prosecutions-Jurisdiction of Courts, 274.

10. Purchases, etc., by Common Carriers-Competitive Bidding, 275.

11. Enforcement of Provisions by Interstate Commerce Commission,

etc.-Procedure, 275.

12. Suits, etc., Brought in What District-Service of Process, 277.

13. Subpænas, 277.

14. Individual Liability of Directors, etc., 278.

15. Injunctions-Courts-Duty of District Attorneys-Parties Defend

ant, 278.

16. Injunctive Relief by Private Parties, 278.

Sec. 17. Preliminary Injunctions and Temporary Restraining Orders-No

tice, 279.

18. Restraining Orders, etc. Security as Condition Precedent, 279.

19. Restraining Orders, etc. -Contents, 280.

20. Restraining Orders, etc. When Not to Issue, 280.

21. Contempt-What Constitutes, 280.

22. Contempt-Procedure, 280.

23. Contempt-Review of Conviction-Bail, 281.

24. Contempts-Existing Statutes When Applicable, 282.

25. Contempts-Statute of Limitations-Other Suits-Pending Pro

ceedings, 282.

26. Effect of Partial Unconstitutionality of Act, 282.

CROSS-REFERENCES.

Combination to control coal lands in Alaska, see ALASKA.
Trade Commission Act, see INTERSTATE COMMERCE.

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

[Act of Oct. 15, 1914, Ch. 323.]

[SEC. 1.] [Definitions.] That "antitrust 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 ninetyfour; an Act entitled "An Act to amend sections seventy-three and seventysix 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, nineteen 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 Columbia 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 jurisdiction of the United States: Provided, That nothing in this Act contained 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 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. [38 Stat. L. 730.]

This Act is popularly known as the "Clayton Act."

For the Act of July 2, 1890, see 7 Fed. Stat. Annot. 336.

For secs. 73-77 of the Act of Aug. 27,
1894, see 7 Fed. Stat. Annot. 346, 347.
For the Act of Feb. 12, 1913, see 1914
Supp. Fed. Stat. Annot. 402.

SEC. 2. [Discrimination in price between purchasers of commodities.] That it shall be unlawful for any person engaged in commerce, 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: Provided, 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 allowance for difference in the cost of selling or transportation, or discrimination 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. [38 Stat. L. 730.]

What contitutes price discrimination Control of resale price. - In Great Atlantic & Pacific Tea Co. v. Cream of Wheat Co. (C. C. A. 2d Cir. 1915) 224 Fed. 566, (affirmed C. C. A. 2d Cir. 1915, 227 Fed. 46), the facts were summarized by the court as follows: "In the production of wheat flour from wheat, there is a sort of by-product known as 'purified middlings.' It is produced by every flouring mill in the United States engaged in the manufacture of wheat flour; it is a staple commodity regularly quoted and dealt in in all grain markets. Defendant buys 'purified middlings,' selecting such as it thinks grade high in quality. Without submitting them to any process or treatment, without adding anything to them, it puts up the middlings which it selects in packages and offers its selection to the trade under the name 'Cream of Wheat.' That name identifies packages containing middlings of defendant's selection, and it has protected its trade-name for such selection by a copyright covering the carton in which the cereal is packed. Either because it has used good judgment in its selection, or because it has well advertised its trademark, it finds a ready market for its packages. Its particular selection, however, amounts to less than one per cent of the total purified middlings bought and sold in this country. With an exception which will be referred to later, defendant makes no sales to consumers or to retailers, but confines its sales exclusively to wholesalers, to whom it charges two prices, $3.95 per case in car load lots and $4.10 per case in less than car load lots. To each purchaser from it, it sends a circular requesting such purchaser to sell to the retail trade only at a price of $4.50 per case, adding to this request the statement that it does not intend to waive the right to refuse at any time to supply any dealer who shall fail to comply with any request made by it, the infringement of which defendant may deem

prejudicial to the interests of the consumer, to defendant's own business, or to the trade at large." It was urged that the defendant's professed and published scheme of sales plus its practice thereunder, created an actual monopoly of and lessened competition in Cream of Wheat; that this result was in itself unlawful and produced means which were specifically prohibited by section 2 of the Clayton Act, viz., price discriminations not justified by any of the exceptions of that section. This contention was not upheld. The court said: "It will show my interpretation of section 2, and emphasize any errors of construction, to pick out, sometimes paraphrase, and arrange in order the words of that section deemed applicable to the case in hand, thus: It is unlawful for a person engaged in commerce, and in the course of commerce, to discriminate in price between purchasers of commodities, whenever discrimination may substantially lessen competition, or tend to create a monopoly in any line of commerce; but there may be price discrimination on account of quantity of commodity sold, and persons selling goods may still select their own customers in bona fide transactions, and not in restraint of trade. Plaintiff's syllogisms in support of the demand for relief are simple, thus: (1) Defendant has a monopoly in Cream of Wheat; (2) through such monopoly it fixes the resale price of that article: therefore (3) it prevents competition in Cream of Wheat and violates the body of section 2. Again: (1) Preventing competition is restraint of trade; (2) defendant does prevent competition: therefore (3) it restrains trade and is not within the exception of section 2. If the premises of the above logical formulæ are admitted in the sense and to the extent plaintiff asserts or assumes as proper, the conclusions flow as matter of course. A successful answer must deny or avoid the premises, or ascribe to words a scope and meaning at variance with plaintiff's usage.

"Taking up seriatim the parts of the above proposition: It is true that defendant has a monopoly in Cream of Wheat; but, as heretofore stated, it is a lawful monopoly, ultimately resting on the plain truth that there can be nothing anywhere in the United States lawfully called Cream of Wheat without defendant's consent and approbation. In that substance (if legally it is a distinct substance) defendant has the monopoly of a creator, something which is not and never has been within the prohibition of any law, anti-trust or otherwise. On the contrary, that monopoly is encouraged by patent, trademark, and copyright statutes, and the rules of unfair competition. Therefore the implication of plaintiff's premise, that there is something inherently wrong in defendant's monopoly, is false and misleading.

"The minor premise, that defendant fixes the resale price, is not, in my opinion, true in point of fact. It would like to fix that price, so far as its minimum is concerned; but fixing connotes enforcement. That it cannot accomplish, and since 1913 at a. events the attempt has been abandoned. Let it be assumed that defendant declines business with all who refuse to maintain prices. If such refusal affected a necessity of life, or even a staple article of trade, the matter might be serious, and history might be appealed to for instances of statutory punishment-e. g., the engrossing acts. But mere abstention from dealing cannot per se be price fixing, because the price is not made to depend upon any contract or agreement even thought by the parties to be enforceable. To call defendant's acts price fixing is inaccurate, and evades obvious legal questions, viz., whether defendant has the right to decline business, and whether it is anybody's business why the business is declined.

"Therefore, because I cannot accept the meaning imputed to the words used b plaintifl, it is not found necessary to reacn the conclusion of the first proposition.

"Concerning the second syllogism: It must be admitted that there is abundant authority for the general proposition that preventing competition is restraint of trade; but it does not follow that it is unlawful

either to prevent any and every species of competition or to restrain trade in any and every species of competition or to restrain trade in any and every degree. The only competition prevented or sought to be prevented by defendant's acts is that of Cream of Wheat against itself; the only trade restrained is the commercial warfare of a large buyer against small ones, or that of a merchant who for advertising purposes may sell an article at a loss, in order to get customers at his shop, and then persuade them to buy other things at a compensating profit. That competition, as encouraged by statutes and decisions, does not include such practices, has been sufficiently shown (with ample citations) in Fisher Flouring Mills Co. v. Swanson, 76 Wash. 649, 137 Раc. 144, 51 L.R.A. (N.S.) 522.

"It is further obvious that, when plaintiff premises that preventing competition is restraining trade, it is assumed that the resultant restraint is unreasonable; for there is nothing in the Clayton Act to compel or induce courts to hold that the trade restraint referred to by this statute differs in kind, quality, or degree from that now held to be meant by the Sherman Act.

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"Because, therefore, I am not persuaded that the acts of defendant have produced, or tend to produce, diminution of any competition favored by reason or law, or have restrained trade unreasonably (if at all) I do not find it necessary to accede to the second syllogism. Section 2 plainly identifies the lessening of competition with restraint of trade (compare the body of the section with the last exception). But price discrimination is only forbidden when it 'substantially' lessens competition. Construing the whole section together, the last exception reads in effect that a 'vendor may select his own bona fide customers providing the effect of such selection is not to substantially and unreasonably restrain trade.' How it can be called substantial and unreasonable restraint of trade to refuse to deal with a man who avowedly is to use his dealing to injure the vendor, when said vendor makes and sells only such an advertisement begotten article as Cream of Wheat, whose fancy name needs the nursing of carefully handled sales to maintain an output of trifling moment in the food market, is beyond my comprehension."

SEC. 3. [Requiring purchasers, etc., of goods, etc., to refrain from handling goods, etc., of competitors.] That it shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract 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 jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement or understanding that the lessce 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. [38 Stat. L. 731.]