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78th CONGRESS 1st Session W W ^ ^ 1 I D 1 I T i I N T H E H O U S E OF R E P R E S E N T A T I V E S J a n u a r y 26,1943 Mr. Sttmners of Texas introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend an A c t entitled " A n Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes", approved October 15, 1914 (38 Stat. 730) as amended. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, 3 That sections 7 and 11 of an Act entitled " A n A c t to sup- 4 plement existing laws against unlawful restraints and monop5 olies, and for other purposes", approved October 15, 1914 6 (XL S. C. Annotated, title 15, sec. 1 8 ) , are hereby amended 7 to read as follows: 8 "SEC. 7. That no corporation engaged in commerce shall 9 acquire, directly or indirectly, the whole or any part of the 2 1 stock or other share capital, or the whole or any part of the 2 assets, of another corporation engaged also in commerce, 3 where the effect of such acquisition may be (1) to substan- 4 tially lessen competition between the corporation whose stock 5 is, or whose assets are, so acquired and the corporation mak- 6 ing the acquisition, or (2) to restrain such commerce in any 7 section or community, or (3) to tend to create a monopoly 8 of any line of commerce. 9 " N o corporation shall acquire, directly or indirectly, the 10 whole or any part of the stock or other share capital, or shall 11 acquire the whole or any part of the assets of one or more 12 corporations engaged in commerce, where the effect of such 13 acquisition, of such stocks or assets, or of the use of such 14 stock by the voting or granting of proxies or otherwise, may 15 be (1) to substantially lessen competition (a) between such 16 corporation or corporations or any of them, whose stock or 17 other share capital or assets are so acquired, and any other 18 corporation, engaged in commerce, owned or controlled by 19 the acquiring corporation, or (b) between any two or more 20 of the corporations whose stock or assets are so acquired; 21 or (2) to restrain such commerce in any section or com- 22 munity; or (3) to tend to create a monopoly of any line of 23 commerce. 24 "This section shall not apply to corporations purchasing 25 such stock solely for investment and not using the same by 3 1 voting or otherwise to bring about, or in attempting to bring 2 about, the substantial lessening of competition. 3 anything contained in this section prevent a corporation en- 4 gaged in commerce from causing the formation of subsidiary 5 corporations for the actual carrying on of their immediate 6 lawful business, or the natural and legitimate branches or 7 extensions thereof, or from owning and holding all or a part 8 of the stock of such subsidiary corporations, when the effect 9 of such formation is not to substantially lessen competition. 10 " N o r shall anything herein contained be construed to Nor shall 11 prohibit any common carrier subject to the laws to regulate 12 commerce from aiding in the construction of branches or 13 short lines so located as to become feeders to the main line 14 of the company so aiding in such construction or from ac- 15 quiring or owning all or any part of the stock of such 16 branch lines, nor to prevent any such common carrier from 17 acquiring and owning all or any part of the stock of a branch 18 or short line constructed by an independent company where 19 there is no substantial competition between the company 20 owning the branch line so constructed and the company 21 owning the main line acquiring the property or an interest 22 therein, nor to prevent such common carrier from extending 23 any of its lines through the medium of the acquisition of 24 stock or otherwise of any other common carrier where there 25 is no substantial competition between the company extending 4 1 its lines and the company whose stock, property, or an 2 interest therein is so acquired. 3 " N o t h i n g contained in this section shall be held to affect 4 or impair any right heretofore legally acquired: Provided, 5 That nothing i n this section shall be held or construed to 6 authorize or make lawful anything heretofore prohibited or 7 made illegal by the antitrust laws, nor to exempt 8 person from the penal provisions thereof or the civil remedies 9 therein provided. any 10 " N o t h i n g contained in this section shall apply to trans- 11 actions duly consummated pursuant to authority given by 12 the Congress to the Civil Aeronautics Authority, Federal 13 Communications Commission, Federal Power Commission, 14 Federal Reserve Board, Interstate Commerce Commission, 15 or the Securities and Exchange Commission. 16 "Wherever the consummation of any plan, undertaking, 17 or agreement by or on behalf of any corporation engaged 18 in or affecting commerce or engaged in manufacturing or 19 processing for distribution in commerce or by or on behalf 20 of any of its subsidiaries so engaged, to acquire the whole 21 or any part of the stock or other share capital or the whole 22 or any part of the assets other than inventories of any other 23 corporation likewise engaged would involve property to the 24 value of more than $ , no such plan, undertaking, or 5 1 agreement by or on behalf of any corporation subject to the 2 jurisdiction of the Federal Trade Commission under sections 3 7 and 11 of the Clayton Act, as amended, shall be con- 4 sumrnated, effectuated, and completed except upon and after 5 compliance with the following requirements: 6 " (1) That the parties to such acquisition shall have 7 discharged the burden of establishing before the Federal 8 Trade Commission that the acquisition would be consistent 9 with the public interest. 10 "(2) That the parties of such acquisition shall hate 11 obtained the written and publicly announced finding of the 12 Federal Trade Commission that consummation of the acquisi- 13 tion would be consistent with the public interest. 14 the showing made by the parties to such acquisition the 15 Commission shall be of the opinion that it is not consistent 16 with the public interest according to the standards herein- 17 above established, it shall make a finding to that effect and 18 give the reasons therefor. I f upon 19 " (3) That the Federal Trade Commission shall not find 20 the proposed acquisition to be consistent with the public 21 interest unless it also finds— 22 " (a) that the acquisition w i l l not substantially 23 lessen competition, restrain trade, or tend to create a 24 monopoly (either in a single section of the country or in H , R. 1 5 1 7 — 2 6 1 the country as a whole) in the trade, industry, or line 2 of commerce in which such corporations are engaged; 3 " (b) that the size of the acquiring corporation after 4 the acquisition w i l l be compatible with the existence 5 and maintenance of effective competition in the trade, 6 industry, or line of commerce in which it is engaged; 7 "(c) that the acquisition will not so reduce the 8 number of competing companies in the trade, industry, 9 or line of commerce affected as materially to lessen the 10 effectiveness of competition therein; 11 "(d) that the acquiring corporation has not, to in- 12 duce the acquisition, indulged in any unlawful methods 13 of competition and has not otherwise violated the provi- 14 sions of the Federal Trade Commission Act, as amended; "(e) 15 that the acquisition w i l l not be incompatible 16 with greater efficiency and economy of production, dis- 17 tribution, and management. 18 " U p o n consummation of any acquisition pursuant to the 19 required finding of the Federal Trade Commission, no pro- 20 ceedings shall thereafter be brought by the Government on 21 the ground that such acquisition constitutes a violation of 22 section 7 of the Clayton Act, as amended. 23 "SEC. 11. That authority to enforce compliance with 24 sections 2, 3, 7, and 8 of this Act by the persons respectively 25 subject thereto is hereby vested in the Interstate Commerce 7 1 Commission where applicable to common carriers subject to 2 the Interstate Commerce Act, as amended; in the Federal 3 Communications Commission where applicable to common 4 carriers engaged in wire or radio communication or radio 5 transmission of energy; in the Civil Aeronautics Authority 6 where applicable to air carriers and foreign air carriers sub- 7 ject to the Civil Aeronautics Act of 1938; in the Federal 8 Reserve Board where applicable to banks, banking associa- 9 tions, and trust companies; and in the Federal Trade Com- 10 mission where applicable to all other character of commerce, 11 to be exercised as follows: 12 "Whenever the commission, authority, or board vested 13 with jurisdiction thereof shall have reason to believe that any 14 person is violating or has violated any of the provisions of 15 sections 2, 3, 7, and 8 of this Act, it shall issue and serve 16 upon such person a complaint stating its charges in that 17 respect, and containing a notice of a hearing upon a day and 18 at a place therein fixed at least thirty days after service of 19 said complaint. 20 right to appear at the place and time so fixed and show cause The person so complained of shall have the 21 why an order should not be entered by the commission, au22 thority, or board requiring such person to cease and desist 23 from the violation of the law so charged i n said complaint. 24 A n y person may make application, and upon good cause 25 shown may be allowed by the commission, authority, or 8 1 board, to intervene and appear in said proceeding by counsel 2 or in person. 3 be reduced to writing and filed in the office of the commission, 4 authority, or board. 5 authority, or board, as the case may be, shall be of the opinion 6 that any of the provisions of said sections have been or are 7 being violated, it shall make a report in writing in which it 8 shall state its findings as to the facts, and shall issue and cause 9 to be served on such person an order requiring such person 10 to cease and desist from such violations, and divest itself of 11 the stock, or other share capital,, or assets, held, or rid itself 12 of the directors chosen contrary to the provisions of sections 13 7 and 8 of this Act, if any there be, in the manner and within 14 the time fixed by said order. 15 in such hearing shall have been filed in a circuit court of 16 appeals of the United States, as hereinafter provided, the com- 17 mission, authority, or board may at any time, upon such 18 notice, and in such manner as it shall deem proper, modify 19 or set aside, in whole or in part, any report or any order 20 made or issued by it under this section. The testimony in any such proceeding shall I f upon such hearing the commission, U n t i l a transcript of the record 21 " I f such person fails or neglects to obey such order of 22 the commission, authority, or board while the same is in 23 effect, the commission, authority, or board may apply to 24 the circuit court of appeals of the United States, within 25 any circuit where the violation complained of was or is 9 1 being committed or where such person resides or carries on 2 business, for the enforcement of its order, and shall certify 3 and file with its application a transcript of the entire record 4 in the proceeding, including all the testimony taken and the 5 report and order of the commission, authority, or board. 6 Upon such filing of the application and transcript the court 7 shall cause notice thereof to be served upon such person, 8 and thereupon shall have jurisdiction of the proceeding and 9 of the question determined therein, and shall have power to 10 make and enter upon the pleadings, testimony, and proceed- 11 ings set forth in such transcript a decree affirming, modify- 12 ing, or setting aside the order of the commission, authority, 13 or board. 14 board as to the facts, if supported by testimony, shall be 15 conclusive. 16 to adduce additional evidence, and shall show to the satisfac- 17 tion of the court that such additional evidence is material 18 and that there were reasonable grounds for the failure to 19 adduce such evidence in the proceeding before the commis- 20 sion, authority, or board, the court may order such addi- 21 tional evidence to be taken before the commission, authority, 22 or board and to be adduced upon the hearing in such manner 23 and upon such terms and conditions as to the court may 24 seem proper. 25 modify its findings as to the facts, or make new The findings of the commission, authority, or I f either party shall apply to the court for leave The commission, authority, or board may findings, 10 1 by reason of the additional evidence so taken, and it shall 2 file such modified or new findings, which, if supported by 3 testimony, shall be conclusive, and its recommendations, if 4 any, for the modification or setting aside of its original order, 5 with the return of such additional evidence. 6 and decree of the court shall be final, except that the same 7 shall be subject to review by the Supreme Court upon 8 certiorari as provided in section 240 of the Judicial Code. 9 " A n y party required by such order of the commission, 10 authority, or board to cease and desist from a violation 11 charged may obtain a review of such order in said circuit 12 court of appeals by filing in the court a written petition pray- 13 ing that the order of the commission, authority, or board be 14 set aside. 15 upon the commission, authority, or board, and thereupon 16 the commission, authority, or board forthwith shall certify 17 and file in the court a transcript of the record as hereinbefore 18 provided. 19 have the same jurisdiction to affirm, set aside, or modify the 20 order of the commission, authority, or board, as in the case 21 of an application by the commission, authority, or board for 22 the enforcement of. its order, and the findings of the commis- 23 sion, authority, or board as to the facts, if supported by 24 testimony, shall in like manner be conclusive. 25 The judgment A copy of such petition shall be forthwith served Upon the filing of the transcript the court shall "The jurisdiction of the circuit court of appeals of the 11 1 United States to enforce, set aside, or modify orders of the 2 commission, authority, or board shall be exclusive. 3 "Such proceedings in the circuit court of appeals shall 4 be given procedure over other cases pending therein, and 5 shall be in every way expedited. 6 sion, authority, or board or the judgment of the court to 7 enforce the same shall in anywise, relieve or absolve any 8 person from any liability under the antitrust Acts. No order of the commis- 9 "Complaints, orders, and other processes of the com- 10 mission, authority, or board under this section may be served 11 by anyone duly authorized by the commission, authority, 12 or board, either (a) by delivering a copy thereof to the 13 person to be served, or to a member of the partnership to 14 . be served, or to the president, secretary, or other executive 15 officer or a director of the corporation to be served; or (b) 16 by leaving a copy thereof at the principal office or place of 17 business of such person; or (c) by registering and mailing 18 a copy thereof addressed to such person at his principal 19 office or place of business. 20 so serving said complaint, order, or other process setting The verified return by the person 21 forth the manner of said service shall be proof of the same, 22 and the return post-office receipt for said complaint, order, 23 or other process registered and mailed as aforesaid shall be 24 proof of the service of the same."
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