nerships, or corporations, except banks and common carriers. The commission is authorized, after due hearing, to issue orders requiring the cessation of unfair practices, the enforcement of such orders, if necessary, being referred to the courts.

The prohibition of unfair practices is further extended by various sections of the Clayton Act, whereby it is declared unlawful for any person engaged in commerce to discriminate in price between different purchasers of commodities sold for use, consumption, or resale within the jurisdiction of the United States, where the effect of such discrimination may substantially lessen competition or tend to create a monopoly. It is also declared unlawful for any person engaged in commerce to lease or sell commodities, patented or unpatented, or to fix a price therefor or a discount for such goods on the condition that the lessee or purchaser shall not deal in the commodities of a competitor, where the effect of the lease or sale may be substantially to lessen competition or tend to create a monopoly. Labor, agricultural, or horticultural organizations are by a separate section excepted from these provisions. Instead of defining specifically unfair competition, Congress by general decree condemned unfair practices and left it to the Federal Trade Commission to determine what practices are unfair.

The Sherman and the Clayton Acts are in a measure declaratory of a principle of the common law, according to which "agreements tending to fix prices or to control the market may be null and void as in restraint of trade." Under this principle the courts have developed the doctrine of unfair competition and have built it largely on the theory that business rules and agreements must not be unreasonable or against public policy.

Numerous state laws have been passed to condemn unfair practices, and the decisions of the courts, Federal and state, have been arriving at the conclusion that in the competitive process the individual has rights which,

whether regarded as property or not, are entitled to protection, and that business practices unfair to both the injured party and the public must be declared inequitable and prevented by judicial process.

The most recent method of attacking the evils of unfair competition is to establish an administrative board whose duty it is to pass upon unfair practices and to correct, so far as possible, the evils resulting therefrom. The former method of procedure was to declare illegal unfair methods and to provide a private right of action against the offender. The nature of the remedy was an injunction to prevent the wrongful act or damages to cover losses resulting from such action. The common-law decisions with regard to unfair competition have been confined very largely to passing off of the goods of one for those of another and misrepresentation, with the result that the scope of the common law was a decidedly restricted one in the effort to prevent unfair methods. While the Sherman Anti-trust Act and state legislation relating to trusts gave a more extensive application of the general principles for the courts and rendered it possible to prevent certain unfair practices which would not have been held void under the common law, nevertheless the ineffectiveness of the private right of action has become notorious. Owing to the conservatism and the slowness of action in the determination of such questions before the courts, many cases have dragged on for a period of ten years or more and often cases were either dropped or inadequate relief was accorded. Moreover, those who suffer from unfair practices are often the small but efficient business establishments which find it impossible to carry their cases to the courts.

The enforcement of the provisions of such laws may be rendered somewhat more effective by giving special authority to the Attorney-General to prosecute on behalf of the state, on complaint of private parties or corporations. But despite these attempts to secure a better enforcement of trust legislation, cases on unfair competition often involve

economic and statistical facts, as well as legal principles, and to secure an effective enforcement of restrictive business laws it has been found necessary to provide additional agencies. For the purpose of enforcing Federal legislation the Federal Trade Commission was established, whose duties were briefly summarized previously. The work of the Federal Trade Commission has demonstrated the peculiar advantages in having unfair methods passed upon by an administrative body rather than leaving the condemnation of such methods solely to the courts, whether under common-law rules or the Sherman Anti-trust Act. Among the unfair methods which have been condemned by the commission are: Exclusive contracts, maintenance of resale prices, commercial bribery, passing off, misrepresentation, false advertising, accumulative rebates, tying contracts, intimidation of competitors, and inducing cancellation of orders from competitors.

The spread of regulation of business by administrative commissions [says Mr. Dunn] is one of the most marked and important politicoeconomic developments in the United States in this generation. The policy was first applied by a few states to railways. It has now been adopted as to railways by the nation and most of the states, and has been extended by several states to public utilities of many kinds. Recently men prominent in business and politics have advocated regulation of large industrial concerns by commissions.

The policy of regulating business, public and private, by commissions has been due to the belief that lawmaking bodies, courts and ordinary executive officials are unable to deal effectively with the difficulties involved in the control of business interests. According to Mr. Dunn:

The legislatures cannot deal with these problems intelligently and effectively, because to do so requires a body possessing expert knowledge and in practically continuous session. In both of these respects lawmaking bodies are deficient. The courts cannot satisfactorily deal with these problems because they lack expert knowledge and have many other kinds of business to transact, and because their slow,

1 Samuel O. Dunn (Editor of the Railway Age Gazette), "Regulation by Commission," North American Review, vol, cxcix, February, 1914, p. 205.

cumbrous, and formal process excludes classes of evidence which, while logically irrelevant to a lawsuit, are precisely the considerations that would influence a business man in deciding a business proposition. The ordinary executive or law-enforcing officials are incompetent to deal with the problems of regulation because they lack expert knowledge, because they have other and entirely differing duties to perform, and because a regulating body should approach its work in a judicial spirit which is incompatible with the executive spirit by which the ordinary law-enforcing officials should be animated.1

It was to meet such difficulties that numerous regulatory commissions have been created. Experience with such commissions has been too brief to form a judgment as to their effectiveness and as to the permanence of their contribution to the cause of public regulation. It is clear that they have filled a gap in the effort of government to control business. It remains to be determined, however, whether the character of men selected for the commissions, and the quality of work accomplished, will warrant their continuance, or whether changes in the policies and attitudes of courts and legislatures toward the regulation of business and commercial dealing may gradually delimit the functions of such commissions as to undermine seriously their powers.

REGULATION OF LABOR AND LABOR CONDITIONS

When the theory of individualism prevailed the state was not expected to interfere in labor contracts. Under the conditions which existed prior to the industrial revolution there was comparatively little need for public regulation of wages or the conditions of labor. Though there were serious injustices and inequalities under the domestic system of manufacture of the eighteenth and early nineteenth centuries, the paternal attitude and interest of the home were seldom absent in the small workshop and tended to foster a humane interest in the laborer and his conditions for work. It was not until a scarcity of land 1 Samuel O. Dunn, op. cit., p. 205.

rendered it impossible to acquire ownership merely by labor, and large-scale production brought a class permanently dependent on wages, that it became necessary for public regulation to enter extensively the field of industrial enterprise. Even then the progress of labor legislation has been slow and has met with many obstacles in the enactment of laws and their enforcement. The story of the reversal of the individualist theories and the consideration of the wage earners and their conditions of work as a matter of public interest which requires governmental regulation is beyond the scope of this treatise.1 A rehearsal of a few of the steps in the progress of labor legislation will aid in the understanding of the changes involved in the trend away from extreme individualism and in the direction of public regulation of industrial affairs. The trend of legislation will be briefly considered with respect to regulations for health and safety, efforts to regulate payment of wages and methods of settling differences leading to strikes, regulation of hours of labor, and social insurance.

Health and Safety.-Though under the laissez-faire regime the conservation of life, health, and energy of wage earners was considered an individual affair, it was found, with the growth of trade and manufactures, that action on the part of the state was imperative if the life and vigor of its citizens were not to be undermined or destroyed.2 Consequently provisions were made by law to safeguard the worker from accidents, to protect him from the dangers of occupational diseases, and to place special safeguards around women and children. Much of this legislation was defective because of incompleteness and the absence of any well-defined standards, and because of defective methods of enforcement. Most of these difficulties have

1 For a valuable account of the growth and the analysis of labor legislation, consult John R. Commons and John B. Andrews, Principles of Labor Legislation (Harper & Brothers, 1920).

2 Cf. Commons and Andrews, Principles of Labor Legislation (Harper & Brothers, 1920), chap. vii.