Message to the Senate Returning Without Approval S. 4526 a Further Extension of Time for Section 10 of Clayton Anti-Trust Act

The White House, December 30, 1920.

To the Senate:

I return herewith without my signature Senate Bill 4526, amending Section 501 of the Transportation Act, by extending the effective date of Section 10 of the Clayton Act.

The Clayton Anti-Trust Act was responsive to recommendations which I made to the Congress on December 2, 1913, and January 20, 1914, on the subject of legislation regarding the very difficult and intricate matter of trusts and monopolies. In speaking of the changes which opinion deliberately sanctions and for which business waits I observed:

It waits with acquiescence, in the first place, for laws which will effectively prohibit and prevent such interlocking of the personnel of the directorates of great corporations—banks and railroads, industrial, commercial and public service bodies—as in effect result in making those who borrow and those who lend practically one and the same, those who sell and those who buy but the same persons trading with one another under different names and in different combinations, and those who affect to compete in fact partners and masters of some whole field of business. Sufficient time should be allowed, of course, in which to effect these changes of organization without inconvenience or confusion.

This particular recommendation is reflected in Section 10 of the Clayton Anti-Trust Act. That Act became a law on October 15, 1914, and it was provided that Section 10 should not become effective until two years after that date, in order that the carriers and others affected might be able to adjust their affairs so that no inconvenience or confusion might result from the enforcement of its provisions. Further extensions of time, amounting in all to more than four years and two months, have since been made. These were in part due to the intervention of Federal control, but ten months have now elapsed since the resumption of private operation. In all, over six years have elapsed since this enactment was put upon the statute books, so that all interests concerned have had long and ample notice of the obligations it imposes.

The Interstate Commerce Commission has adopted rules responsive to the requirements of Section 10. In deferring the effective date of Section 10, the Congress has excepted corporations organized after January 12, 1918, and as to such corporations the Commission's rules are now in effect. Therefore, it appears that the necessary preliminary steps have long since been taken to put Section 10 into effect, and the practical question now to be decided is whether the partial application of these rules shall be continued until January 1, 1922, or whether their application shall now become general, thus bringing under them all common carriers engaged in commerce and at last giving full effect to this important feature of the Act of October 15, 1914.

The grounds upon which further extension of time is asked, in addition to the six years and more that have already elapsed, have been stated as follows:

That the carrying into effect of the existing provisions of Section 10 will result in needless expenditures on the part of the carriers in many instances; that some of its provisions are unworkable, and that the changed status of the carriers and the enactment of the Transportation Act require a revision of Section 10, in order to make it consistent with the provisions of the Transportation Act

When it is considered that the Congress is now in session and can readily adopt suitable amendments if they shall be found to be necessary, such reasons for further delay appear to me to be inadequate. The soundness of the principle embodied in Section io seems generally to be admitted. The wholesome effects which its application was intended to produce should not longer be withheld from the public and from the common carriers immediately concerned, for whose protection it was particularly designed.

WOODROW WILSON.