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The Federal Trade Commission: The Development of the Law which led to its Establishment
Published online by Cambridge University Press: 02 September 2013
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It was Munn vs. Illinois that first interpreted the constitutional provision empowering Congress to regulate commerce in such a way as to charge private business with a public interest. Since that epochal finding our courts have made comparatively swift progress, reaching ultimately (through the Standard Oil and tobacco decisions) a federal trade commission to regulate competition in trade and to restrain illegal combinations. All of this has been done during the professional life of many lawyers of today, for Munn vs. Illinois was decided in 1876.
Writers upon the trend of legislation and of court decisions had clearly predicted this last development of corporation law. The incident of climax importance however, was the remanding of the oil and tobacco cases to the circuit courts where the decrees of dissolution were to be worked out in conjunction with the department of justice. This was administrative work, and a department of the executive branch of the government should do it. Hence the creation of the trade commission, empowered to investigate the carrying out of the decrees of the supreme court and to prepare the form of decree in certain cases referred to it by the circuit courts.
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- Research Article
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- Copyright
- Copyright © American Political Science Association 1915
References
1 (94 U. S. 113.).
2 Art. viii, sec. 1.
3 Standard Oil vs. U. S. 221 U. S. 1. U. S. vs. American Tobacco Co. 221 U. S., 66.
4 Sec. 5 and sec. 6 of act to create federal trade commission.
5 Wyman, , Control of the Market, Chap. x, 238Google Scholar; Chap. xii, 277; Hise, Van, Concentration and Control, Chap. v, 270.Google Scholar
6 Stimson, F. J., Lectures, Tendencies of American Legislation.
7 The court said: “Rights of property which have been created by the common law cannot be taken away without due process; but the law itself, as a rule of conduct, may be changed at the will, or even at the whim, of the legislature, unless prevented by constitutional limitations. Indeed, the great office of the statutes is to remedy defects in the common law as they are developed and to adapt it to the changes of time and circumstances.”
8 Approved, Feb. 2, 1887.
9 Fin. Chronicle, vol. xlvi, 70, 100, 133.
10 Approved July 2, 1890. First three sections prohibit restraint and monopoly and seventh section gives party injured treble damages.
11 Wyman's Control of the Market.
12 People vs. North River Sugar Rfg. Co. (121 N. Y., 582).
13 In re Debs (158 U. S., 564).
14 U. S. vs. E. C. Knight (156 U. S. 1).
15 The case turned on a close vote of 5 to 4. It has since been thought that the government attorneys were no match for the trust lawyers. At any rate, the view then announced, that manufacture was not commerce, has not since been urged. Instead manufacture is regarded as one step in a scheme the entirety of which may amount to intercourse and trade, and when this trade is between states it comes within the Sherman act. It will prove interesting to read the ground taken by Justice Harlan who wrote the minority opinion.
16 Trans-Missouri Freight Association (166 U. S. 290).
17 U. S. vs. Addystone Pipe and Steel Co. (175 U. S. 211). This, briefly, was an association of pipe manufacturers with elaborate rules which precluded individual members from bidding upon jobs until the association had sold the right to go after the job to the member bidding the most for the privilege. Once a job was “sold” to a member, he was to be left free to get the best price he could without competition from others.
18 Standard Oil had been fined $26,000,000 in the lower courts. American Tobacco had had the treble damage recovery clause of the Sherman act enforced against it.
19 People vs. North River Sugar Rfg. Co. (121 N. Y., 582).
20 Trans-Missouri Freight Association (166 U. S. 290).
White Star Line vs. Star Line (141 Mich. 604).
21 Northern Securities (193 U. S. 197).
22 Atty. Gen. vs. Booth (143 Mich. 84).
23 Trenton Potteries vs. Oliphant (58 N. J., equity, 507).
24 Fin. and Com. Chronicle., vol. xcix, 694, quotes Robt. R. Reed as follows: … “unfair competition … was recognized by the courts and in effect covered only unfair acts tending to the destruction of competition—acts, that is, which could be committed only in the attempt to establish a monopoly. ‘Unfair methods of competition’ is capable of no such construction.”
25 Wyman, Control of the Market, Chap. iii.
26 Evans vs. Harlow (Q. B. 1844).
27 Ayer vs. Rushton (7 Daly 9).
28 White vs. Mellin (House of Lords, 1895).
29 Lumley vs. Gye (Q. B. 1853).
30 Glamorgan Coal Co. vs. So. Wales Miners' Fed. (2 K. B. 545).
31 Chambers and Marshall vs. Baldwin (91 Ky. 121).
32 Waltham Watch vs. U. S. Watch Co. (173 Mass., 85).
33 Wyman, Control of the Market.
34 Sec. 6, paragraph e.
35 Sec. 6, paragraph c.
36 Sec. 7.
37 State vs. Eastern Coal Co. (29 R. I., 254) citing Oakdale Mfg. Co. vs. Garst (18 R. I., 484).
38 U. S. vs. Patterson (205 Fed. 292).
39 U. S. vs. Winslow (227 U. S., 202).
40 Strout vs. U. Shoe Machinery Co. (202 Fed. 602).
41 Reeves vs. Decorah Farmers' Coöperative Society (140 NW, 844).
42 U. S. vs. Union Pacific Rd. (226 U. S., 306).
43 U. S. vs. Int. Harvester Co. (214 Fed. 987).
44 (193 U. S., 197.)
45 New Jersey Court Common Pleas, September 21, 1914.
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