engaged in interstate or foreign commerce, other than banks or common carriers, any one of which has more than $1,000,000 capital, surplus, and undivided profits, if they are or shall have been theretofore, by virtue of their business and location of operation, competitors, so that the elimination of competition by agreement between them would constitute a violation of any of the provisions of any of the antitrust laws. Enforcement of the prohibitions of the Clayton Act.-The authority to enforce the foregoing provisions of the Clayton Act is vested in the Federal Trade Commission as to all corporations which come within its jurisdiction by section 11 of the said act. PROCEDURE IN THE ENFORCEMENT OF THE LAW. Briefly stated, the procedure in the enforcement of these substantive rules of law declared in both the Federal Trade Commission Act and the Clayton Act, as recited above, is the following: On hear Whenever the commission, upon application for a complaint by a competitor, or on its own initiative, has reason to believe that any person, etc., has been or is using any unfair methods of competition and that a proceeding by the commission would be to the public interest, or is violating or has violated any of the aforesaid provisions of the Clayton Act, it shall serve a complaint, with notice of a hearing, upon such person, etc., who shall have the right to appear and show cause why an order should not be made requiring the cessation of the violation of law charged. Other parties, for good cause shown, are allowed to intervene in the proceeding. ing had, if the commission shall be of opinion that a violation of law is shown, it shall serve an order on the person complained of to cease and desist. If such person fails to obey the order of the commission, the latter may apply to the circuit court of appeals to enforce the same and file a transcript of the record in the case. The court shall then take jurisdiction of the proceedings and have power to affirm, modify, or set aside the order of the commission, but the findings of the commission as to facts, if suppported by evidence, shall be conclusive. If the court permits additional evidence to be adduced it must be taken before the commission. The only review of the judgment and decree of the court is by writ of certiorari to the Supreme Court, as provided by law. Any party required to cease and desist from a violation of law may obtain a court review in a similar manner. TRADING WITH THE ENEMY. The powers conferred upon the President by section 10 of the trading with the enemy act were delegated by him to the Federal Trade Commission on October 12, 1917. In administering this section of the act the commission considers and takes final action upon applications of citizens of the United States for license under letters patent of the United States owned or controlled by enemies. If the action is favorable the commission prescribes the term of the license, amount of royalty, and conditions of account and payment thereof. It may fix the prices on products made by the licensee when such products have to do with the health of the military and naval forces of the United States or the successful prosecution of the war. mission, in cooperation with the Army and Navy patent board and the Commissioner of Patents, issues orders of secrecy which enjoin the publication of an invention where a disclosure thereof might be detrimental to the public safety or defense, endanger the successful prosecution of the war, or be of assistance to the enemy. EXPORT TRADE. The com Pursuant to the provisions of an act of Congress approved April 10, 1918, certain associations engaged in foreign trade are required to file with the commission their articles of association or contracts of association and other information. The commission is authorized by said act to conduct investigations into alleged violations of law on the part of such associations and to make recommendations for the readjustment of the business of associations violating the law, and to refer its findings to the Attorney General if such recommendations are not complied with. COMPULSORY POWERS, PENALTIES, AND MISCELLANEOUS PROVISIONS. In order to enable the commission to perform the duties imposed upon it, power to examine and copy records and to require by subpoena the attendance and testimony of witnesses and the production of documentary evidence is conferred in section 9, and in section 10 the refusal to obey the subpoena or lawful requirements of the commission is made an offense punishable by fine and imprisonment. Any member of the commission may sign subpoenas, and members of the commission or the examiners of the commission may administer oaths and receive evidence. In case of refusal to obey a subpoena the commission may invoke the aid of the courts of the United States, which may order compliance therewith, and on failure punish the delinquents for contempt. Moreover, upon application of the Attorney General, at the request of the commission, the courts have jurisdiction to issue writs of mandamus requiring any person or corporation to comply with the law or any order of the commission in pursuance thereof. The commission is also authorized to take testimony by deposition. No person is excused from testifying or producing evidence before the commission on the ground that it might tend to incriminate him or to subject him to penalty or forfeiture, but it is provided that no natural person shall be criminally prosecuted on account of any transaction concerning which he may testify or produce evidence, if furnished in obedience to a subpoena, except in case of perjury. Penalties of fine and imprisonment are provided for those who neglect or refuse to answer any lawful inquiry in obedience to a subpoena or lawful requirement of the commission. Further, penalty of fine and imprisonment is provided for those who falsify records, fail to keep proper records, or refuse the commission lawful access to the same, and penalty of fine for corporations which delay to file such reports as the commission may lawfully require, such fines to be recoverable by the United States in a civil suit. Relations of the commission to legislative, judicial, and other executive departments.The Federal Trade Commission is organized in a manner similar to that of the Interstate Commerce Commission, and its relations to the legislative, judicial, and other executive departments of the Government are defined in the law. Like the Interstate Commerce Commission, it is made independent of any of the other executive departments. In addition to the general executive direction reposed by the Constitution and laws in the President, this law provides specifically that the commission shall, at his direction, investigate alleged violations of the antitrust acts by any corporation. In this connection it may be noted that the President is authorized to direct the several departments and bureaus of the Government to furnish the commission, upon request, all records and information in their possession relating to any corporation subject to this act. The commission may also be called upon to perform certain of its functions at the request of the Attorney General, namely, in investigating the execution of decrees against trusts and in making investigations and recommendations for bringing corporations alleged to be violating the antitrust acts in harmony with the law. The law provides that either House of Congress may direct the commission to investigate and report the facts relating to any alleged violation of the antitrust acts by any corporation. It is also provided that the commission shall have power to make annual and special reports to Congress and recommendations for additional legislation, as well as reports regarding its investigations into conditions in foreign countries affecting the trade of the United States. UNITED STATES SHIPPING BOARD. The United States Shipping Board was created by an act of Congress approved September 7, 1916, entitled "An act to establish a United States Shipping Board for the purpose of encouraging, developing, and creating a naval auxiliary and naval reserve and a merchant marine to meet the requirements of the commerce of the United States with its territories and possessions and with foreign countries; to regulate carriers by water engaged in the foreign and interstate commerce of the United States, and for other purposes," generally known as the shipping act, 1916. It is an independent establishment of the executive branch of the Government, similar to the Interstate Commerce Commission and Federal Trade Commission, and under the shipping act, 1916, was composed of five members, who chose their own chairman and vice chairman and secretary. The shipping act, 1916, provides for the regulation of the operations of common carriers by water in both interstate and foreign commerce, defines certain terms used in connection therewith, and provides penalties for the violation of its provisions. Carriers are required to file with the board copies of such agreements, or memorandums of oral understandings as each may have with other carriers or persons subject to the act relating to the regulation of rates, pooling of earnings, number and character of sailings between various ports, the volume or character of traffic, etc. Certain conduct by carriers or other persons subject to the act is declared to be unlawful and punishable by penalties set forth in the act. Sworn complaints setting forth violations of the act may be filed with the board by a common carrier by water or other person subject to the act, and a method is provided for the adjudication of such complaints. The board is further empowered to investigate the action of foreign Governments with respect to privileges afforded and burdens imposed on vessels of the United States, and to make a report of the result of such investigations to the President, who is authorized to secure by diplomatic action equal privileges for United States vessels. Methods of enforcing the orders of the board, whether for the performance of certain acts or for the payment of money awarded as damages by the board, are also provided. The act expressly provides that the board does not have concurrent jurisdiction with the Interstate Commerce Commission over acts within the latter's power or jurisdiction, and that its provisions do not apply to intrastate commerce. The board is further empowered by the shipping act, during war or any national emergency, the existence of which may be declared by proclamation of the President, to regulate the transfer to aliens of vessels registered or enrolled and licensed under the laws of the United States. The board may also organize one or more corporations under the laws of the District of Columbia, for the purchase, operation, lease, charter, or sale of the merchant vessels acquired under the act, and there was placed at the disposal of the board for this purpose a fund of $50,000,000, to be raised through the sale of Panama Canal bonds. Under this authority the board on April 16, 1917, organized the United States Shipping Board Emergency Fleet Corporation, all the stock of which has been fully paid up and is now owned by the United States of America through the United States Shipping Board. The board is directed to investigate the relative cost of constructing vessels at home and abroad; to examine the rules under which vessels are constructed at home and abroad; to investigate matters relating to marine insurance, the classification and rating of vessels, and the navigation laws of the United States, and to make such recommendations to Congress as it may deem best for the improvement and revision of such laws. The shipping act, 1916, was amended by an act approved July 15, 1918, which more particularly defined the various terms used and provisions contained in the shipping act, and added eight sections at the end of the act whereby the board was granted more complete control over the use or sale, particularly to aliens, of marine property during the existence of a state of war or any national emergency declared to exist by proclamation of the President, and providing punishment for violations of certain provisions of the act as amended. The shipping act, 1916, as amended by the act approved July 15, 1918, was further amended by the act of June 5, 1920, known as the merchant marine act, 1920, which transferred to the Shipping Board certain specified authority granted during the war by Congress to the President and by him delegated by various Executive orders to the Shipping Board and the United States Shipping Board Emergency Fleet Corporation. This act in section 1 sets forth in the following language the general merchant marine policy to be followed by the board in its administration of the merchant marine acquired by the United States as a result of its European war activities: "That it is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have à merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is hereby declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, in so far as may not be inconsistent with the express provisions of this act, the United States Shipping Board shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be obtained. By this act the membership of the board is increased from five to seven, the sections of the country from which they are to be appointed are designated and the President is directed to designate the member to act as chairman of the board, the board electing its vice chairman. General conditions to govern the board in its disposition of vessel property of the United States both to citizens of the United States and to aliens are set forth, and the board is authorized to sell to aliens only when, after diligent effort, it has been unable to sell to American citizens, and then only upon the affirmative vote of not less than five members, with the reasons for such action spread on the minutes of the board. Other duties of the board under the merchant marine act, 1920, are as follows: To investigate and determine what steamship lines should be established and operated between the United States and foreign ports for the development and main tenance of the foreign and coastwise trade of the United States and an adequate postal service; to sell vessels under its control to responsible citizens of the United States who will agree to maintain such lines under such terms as the board may deem advisable. To cooperate with the Secretary of War in encouraging the development of ports and transportation facilities in connection with the water commerce over which the board has jurisdiction, to investigate the cause of congestion of commerce at ports and any other matters tending to promote and encourage the use by vessels of ports adequate to care for the freight which would naturally pass through such ports, the result of such investigations to be submitted to the Interstate Commerce Commission for such action as that commission may consider appropriate under existing law in case the board decides that rates, charges, rules, or regulations of common carriers by rail subject to the jurisdiction of the Interstate Commerce Commission are detrimental to the promotion and development of such ports. To set aside annually for five years from the approval of the act, from revenues from sales and operations, a construction loan fund of not exceeding $25,000,000, for use in aiding the construction of vessels of the best and most efficient type for operation on the steamship lines deemed necessary and desirable by the board, no aid from such fund, however, being for a greater sum than two-thirds of the cost of the vessel or vessels to be constructed. To recondition and keep in suitable repair and operate until sold all vessels under its control either directly or through the United States Shipping Board Emergency Fleet Corporation, which is authorized to continue in existence until all vessels are sold regardless of the provision of the shipping act, 1916, limiting the life of said corporation to not to exceed five years after the declaration of peace between the United States and Germany as evidenced by proclamation of the President. To create out of net revenue from operations and sales and to administer an insurance fund to insure any interest of the United States in vessels constructed or under construction and in any plants or materials acquired by the board. To continue the operation of housing projects acquired by the United States Shipping Board Emergency Fleet Corporation until the interest of the United States in such properties is disposed of consistent with good business and the best interest of the United States. To take over on January 1, 1921, the possession, control, operation, and development of the terminal facilities acquired by the President by or under the act entitled "An act making appropriations to supply urgent deficiencies in appropriations for the fiscal year ending June 30, 1918, and prior fiscal years, on account of war expenses, and for other purposes," approved March 28, 1918. To make all necessary rules and regulations to carry out the provisions of the act, with authority to request the head of any department, board, bureau, or agency of the Government to suspend, modify, or annul rules or regulations affecting shipping in the foreign trade, except such rules or regulations relating to the Public Health Service, the Consular Service, and the Steamboat-Inspection Service, which have been established by such department, board, bureau, or agency, or to make new rules or regulations affecting such shipping. To approve before issuance rules or regulations thereafter established by any other branch of the Government affecting foreign trade, except rules or regulations affecting the Public Health Service, the Consular Service, and the Steamboat-Inspection Service. To approve the type and kind of new vessels to be constructed by citizens of the United States out of trust funds set aside for investment therein in order that the owner of such vessel may be allowed as a deduction for the purpose of ascertaining his net income subject to the war profits and excess profits taxes imposed by Title III of the revenue act of 1918, an amount equivalent to the net earnings of a vessel owned by such person operated in the foreign trade during such taxable year, but two-thirds of the cost of any such new vessel shall be paid for out of ordinary funds or capital of the person having such vessel constructed." The act further provides that after February 1, 1922, the coastwise laws of the United States shall extend to its island territories and possessions not now covered thereby, and directs the board to establish adequate steamship service at reasonable rates to accommodate the commerce and passenger travel of such islands, but if such adequate shipping service is not established by February, 1922, the President is directed to extend the period within which such service may be established for such time as may be necessary therefor. The act further provides that all mails of the United States shipped or carried on vessels shall, if practicable, be shipped or carried on American-built vessels documented under the laws of the United States, and directs the board and the Post 35405°-67-1-1ST ED- -25 Jud a D master General in aid of the development of an adequate merchant marine to determine from time to time the just and reasonable rate of compensation to be paid for carrying the mails on such vessels. The American Bureau of Shipping is directed to be recognized by all departments, boards, bureaus, or commissions of the Government for the classification of vessels owned by the United States so long as the American Bureau of Shipping is maintained as an organization with no capital stock and paying no dividends. The Secretary of Commerce and the chairman of the board are each directed to appoint one representative to represent the Government on the executive committee of the American Bureau of Shipping. The act further provides that not to exceed 16 persons in addition to the crew may be carried on cargo vessels documented under the laws of the United States without thereby subjecting such vessel to the provisions of laws governing passenger vessels. The act further exempts from the provisions of the antitrust laws associations entered into by marine insurance companies for the purpose of transacting marine insurance and reinsurance business in the United States and foreign countries. Section 30 of the merchant marine act, 1920, contains what is known as the shipmortgage act, 1920, and materially alters the provisions of prior laws and judicial decisions relating to the status of mortgage liens on vessel property. This section creates what is known as a "preferred mortgage" by providing that mortgages on vessel property, recorded and indorsed in accordance with the provisions of the shipmortgage act, shall be known as preferred mortgages and that upon the sale of a vessel subject to a preferred mortgage lien by order of a district court in suit brought by one having a maritime lien all preexisting claims in the vessel are terminated and attached in like amounts and priorities to the proceeds of the sale except that the lien arising under the preferred mortgage is given precedence over all such claims except expenses and fees allowed and costs taxed by the court, and liens for damages arising out of tort, for wages of a stevedore when employed by the owner, operator, master, ship's husband, or agent of the vessel, for wages of the crew of the vessel, for general average, and for salvage, including contract salvage. The act further provides that such preferred mortgage may be foreclosed by a suit in rem in admiralty, the original jurisdiction of such suits being granted exclusively to the district courts of the United States. The act also regulates transfers of mortgaged vessels and the assignment of vessel mortgages and rights thereunder, and repeals the maritime lien act, 1910, which, however, is reenacted with amendments to make its provisions consistent with the provisions of the ship-mortgage act, 1920. Section 4530 of the Revised Statutes is amended so as to provide that a seaman on a vessel of the United States may not make the demand for wages provided for therein more often than once in the same harbor on the same entry. Section 20 of the act of March 4, 1915, relating to suits for damages for personal injuries suffered on board a vessel or in its service is amended so as to extend to seamen who are given a right of trial by jury in such cases and further provides that where death ensues the personal representative of a deceased seaman is authorized to maintain an action for damages at law with the right of trial by jury, in both of which cases statutes of the United States modifying or extending the common-law right or remedy in actions for personal injury or death of railway employees are declared to be applicable. The act further provides that in the judgment of Congress treaties or conventions to which the United States is a party which contain provisions restricting the right of the United States to impose discriminating customs duties on imports entering the United States in foreign vessels and restricting the right of the United States to impose discriminatory tonnage dues on foreign vessels should be terminated and directs the President to give notice to the several Governments parties to such treaties so in force terminating such restrictions at the expiration of the period provided for in such treaties for the giving of such notice. The act, by section 38, amends section 2 of the shipping act, 1916, so as to more clearly define within the meaning of the shipping act, 1916, the citizenship of a corporation, partnership, or association. UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION. The United States Shipping Board Emergency Fleet Corporation was incorporated April 16, 1917, by the United States Shipping Board under the authority of section 11 of the act of Congress approved September 7, 1916, generally known as the shipping act, 1916. |