thousands of people assisted in the building of the road and in the development of the country, and thousands shared in the profits. As it was with the railroad, so it was with many other undertakings: about the middle of the nineteenth century the corporation began to be brought into general use in the organization of industry and commerce.

The charters under which corporations conduct business are nearly always granted by State authority. The Constitution of the United States has no specific provisions in reference to corporations, yet Congress can and does grant charters to corporations organized for carrying on enterprises which come within the range of federal authority. For example, Congress under its power to regulate the currency has granted charters to national banks; under its power to regulate interstate commerce it has granted charters to transcontinental railway companies. As a rule, however, the creation and regulation of corporations are State functions. How important these functions. are may be seen in the State constitutions, where the article on corporations sometimes requires as much space as is given to one of the three great departments. "Formerly," says Justice Brewer, "there were two factors, the individual and the State; now there are three, the individual, the State and the corporation."

About 1880 the great corporations began to devise methods of protecting themselves against the ravages of competition. While competition gives life to trade it at the same time plays havoc with profits. Especially is this true in these times, when a salesman with

the aid of the telephone and telegraph can do as much higgling and bargaining in an hour as could be done a hundred years ago in a month, and when new inventions and processes are constantly reducing the cost of production. So in order to stifle competition, the corporations began to pool their interests and enter into agreements as to prices and as to the amount of goods to be produced. In a few years corporate combination had been carried so far that it seemed that the principle of competition in business would have to die and that the principle of monopoly would be established. Now monopoly is not only contrary to the constitutions of most of the States, but it is also contrary to the commercial instincts of the American people. So in order to check the growth of monopoly, Congress, in 1890, passed the Sherman Anti-Trust Act. This famous statute declares that every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade, or commerce among the several States, is illegal, and it provides that persons entering into such contracts or engaged in such combinations shall be liable to a heavy fine or to imprisonment, or to both fine and imprisonment.

The Anti-Trust law did not prevent the growth of corporate combinations. The corporations continued to merge and blend their interests and by the opening of the twentieth century, one-third of the total products of all industries, excluding that of agriculture, had been brought under the control of corporate combinations, or trusts so-called.

Congress in 1913 undertook to strengthen the

Sherman Law by passing a supplementary act known as the Clayton Trust Bill. The Clayton law makes it unlawful for any concern to discriminate in price between different purchasers where the effect of such discrimination is substantially to lessen competition or create a monopoly in any line of trade; it forbids any corporation from acquiring the whole or any part of the stock of another corporation where the effect of such acquisition may substantially lessen competition between the corporation whose stock is so acquired and the corporation making the acquisition; it forbids directors in certain classes of corporations to serve as directors in corporations conducting the same line of business. In 1914 Congress took another step forward in the warfare against monopoly. It declared unfair methods of competition to be unlawful and it established the Federal Trade Commission and gave it power to prevent persons, partnerships, and corporations (excepting banks and railroads) from using unfair methods in trade. This commission is composed of five members appointed by the President at a salary of $10,000 a year. When the commission finds that a person or corporation is using unfair methods of competition it may order the offender to desist and if the order is not obeyed the offender is liable to be brought before the Circuit Court of Appeals where the order of the Commission may be affirmed or set aside as the court shall determine. If the order is affirmed the offender is liable to be punished if he does not desist from his unfair practices.

APPENDIX A

[THE CONSTITUTION

OF THE

UNITED STATES OF AMERICA]

WE THE PEOPLE of the United States, in Or- 1 der to form a more perfect Union, establish Justice, insure domestic Tranquillity, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this CONSTITUTION for the United States of America.

ARTICLE I

SECTION 1. All legislative Powers herein granted shall be vested in a Congress of the 2 United States, which shall consist of a Senate and House of Representatives.

SECTION 2. The House of Representatives shall be composed of Members chosen every 3