(see appendices IV and V, for the laws and comments thereon) only the sections immediately in point will be referred to here. They provide:

1. Unfair methods of competition are unlawful.1 Rightly administered this ought to prove the pure food law of commerce.

Up to the present time the phrase, “Unfair Competition," has had a limited and special application in both English and American law, but the new law is intended to reach a much wider range of unfair methods.

2. It shall be unlawful for any person to either directly or indirectly discriminate in price between different purchasers, where the effect of such discrimination may be to substantially lessen competition, or tend to create a monopoly; provided, however, that discrimination in price may be made on account of differences in grade, quality, or quantity, and also to allow for difference in the cost of selling, or transportation, and also where made in good faith to meet competition, and providing further that nothing in the Act shall prevent persons from selecting their own customers.3

It is needless to say the exceptions after the word "provided" deprive this section of nearly all its force, since they open the door quite freely to about all the discriminatory practices that now exist. In this respect the act is far more favorable to discriminations than the laws of many of the states, for the state laws punish with fine and imprisonment discriminations in prices between parties and localities for the purpose of injuring a competitor.

As drawn, most of the state laws are too drastic to be literally enforced, while, possibly, the Clayton Act is too lenient in its broad exceptions.

The vital point, however, is that it is to the interest of every man engaged in commerce to obey this law in letter and spirit, since it tends toward stable and uniform prices and makes for fair dealing.

If this section of the Clayton Act could be enforced, regardless of its exceptions, it would be a boon to both sellers and buyers.

Instinctively men who are accustomed to "run their business to suit themselves" will denounce the law as meddlesome, mischievous, etc., etc., but it is not, it is a step in advance because it is diametrically opposed to the destructive, "cut-throat" spirit of the Sherman Law.

The spirit of the Sherman Law is unrestricted competition, and that means unrestricted discrimination, the bitterer and more vicious the better; the spirit of the Clayton Act is, treat all men fairly, do nothing to injure your competitor.

Under the Sherman Law it is almost a presumption of guilt if your prices are the same as your competitors; under the Clayton Act it is almost a presumption of guilt if they are not the same.

Under the Sherman Law you run the risk of being found guilty if, before making your own prices in a given town, you ask the local dealer what his prices are, and charge the same.

Under the Clayton Act you run the risk of being found guilty if you go into a town and make prices without first learning what the local dealer asks, for the Clayton Act simply permits you to meet competition.

In short, the Clayton Act makes it essential for a man to act very cautiously lest he injure a competitor by wittingly or unwittingly discriminating in prices.

As for deliberately taking an order below cost to get business away from a competitor, that is quite without the pale of the Act.

Time will demonstrate the significance of this important section. It is no new declaration; Congress lagged many years behind a number of the states.1

3. Unlawful for any person to sell or lease anything, whether patented or unpatented, or give a rebate or discount on condition that purchaser or lessee shall not use or deal in the goods, machinery, etc., of a competitor, where the effect of such lease, sale or contract, etc., may be to substantially lessen competition or create a monopoly.2 Sections 2 and 3 of the Clayton Act provide no criminal penalty. Their enforcement are left to the Federal Trade Commission.3

But it is expressly provided in section 4 of the Act that any person who may be injured in his business or property "by reason of anything forbidden in the antitrust laws may sue in any District Court of the United States in the district where the defendant resides or is found or has an agent, without respect to the amount in controversy," and recover three-fold damage, with costs and reasonable attorney's fee.

XX

The broad provisions of the new law are in line with the spirit and argument of this book.

Following the lead of many of the states, Congress has taken advanced ground in the endeavor to correct unfair and vicious competitive practices. Above all, it has provided a tribunal to bring these practices into the light of publicity and to correct them before they have gone so far as to become criminal.

1Arkansas, Idaho, Kansas, Louisiana, Massachusetts, Mississippi, Missouri, Montana, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah, Wisconsin, Wyoming, have laws against unfair practices.

The Trade Commission Act is preventive in letter and spirit. It is made the duty of the Commission to guide and forbid rather than punish. Punishment is left to the proper authorities if the admonitions of the Commission are unheeded.

This does not mean that the Commission stands between the criminal and punishment. All the criminal provisions of state and federal laws remain intact. But whenever the Commission is appealed to in time and in good faith, practices that might become criminal will be forbidden.

In short, there is a tribunal-composed of lawyers and business men-ready to hear complaints and adjust same before there has been any flagrant violation of law.

CHAPTER VI

TRUE VS. FALSE COMPETITION

I

"Then your argument is that all competition should be suppressed?" someone says.

"No."

"But if competition is war

"Yes."

"And war is

"Yes."

"Should not men stop competing?"

"In a false way, yes; in a true way, no."

"What do you mean?"

"We will see."

II

Two runners engage in a race.

The distance is a mile.

They start, side by side, at the crack of a pistol. They do not start at top speed but reserve their strength. They keep close together and each gages his efforts by what the other is doing. For nearly the entire distance they may run shoulder to shoulder, neither leading, or one may set the pace, the other following close at his heels. At the finish there is a spurt and it often happens the race is won, not by the one who can actually run faster for the entire distance, but by the man who has used the better judgment