Page:The Green Bag (1889–1914), Volume 20.pdf/781

 6oo

THE GREEN BAG

parties to such contract and agreement thus held by lapse of time to be reasonable, to show that it was an unreasonable restraint of trade. The right of the government to attack such contracts or agreements as unreason able was merely technical and unsub stantial, since the memorandum filed with the committee by the Commissioner of Corporations discloses the fact that the determination of the Commissioner or his failure to determine was intended by that bureau to be final and conclusive. On this point this memorandum which he was instructed by the President to prepare says, among other things: ' ' Within thirty days he will thus find out either that his contract is believed to be contrary to public policy and may be attacked by the Government, in which case he would thereafter enter upon it at his own very proper risk, or he would learn, on the other hand, that the Government saw no prima facie reason to disapprove it and he would then know that he could go ahead and base his operations upon it, and that so long as it was not against public policy it could not be attacked under the Sherman anti trust law; and this would be all the average business man would care to know." Now, bear in mind the fact that whether or not it was against public policy was reached in one of two ways: first, by a specific determination of the Commissioner that the contract was in unreasonable restraint of trade, and, second, by the failure of the Commissioner to determine at all when after the lapse of thirty days, by the simple lapse of time, the contract and agreement would be held to be reason able. So that the action or inaction of the Commissioner resulted in the determination of whether or not the contract was against public policy, and if it was inaction upon the part of the Commissioner, it gave to the corporation the knowledge that they could go ahead and base "their operations upon it." That this was the distinct

understanding of the Commissioner of Cor porations as to the manner in which this legislation, if it became a law, was to be enforced, more clearly appears from his further statement in the same memorandum in which he says: 'It should be so that the Government can by legal and regular methods make its election as to the kind of contract which it will prosecute or will not prosecute, and to be able so to advise the parties to that con tract that they may act upon definite knowledge. "In essence this section provides merely a regular procedure, available for all par ties for exercising that discretion as to enforcement of law which is an inseparable part of administrative functions." This suggestion, in his memorandum made by the authority of the President, I take to be an authoritative declaration that a decision by his Bureau, either by action or inaction, would be accepted and acted upon by the Department of Justice: When ever then, by the operation of thirty days' time, a contract thus filed became reason able, the corporations interested therein could feel satisfied that although technically still open to attack in the courts, they need have no apprehension, because the Depart ment of Justice would take this negative determination by the lapse of time as the rule by which they were to be governed in the enforcement of the provisions of the Sherman anti trust law, and no action would be brought thereunder for the pur pose of assailing any contract thus deter mined by indirection not to be in unreason able restraint of trade. Although the substitute provided more or less complicated machinery for appeal it is very clear that, so far as the Government is concerned, if the Commissioner of Cor porations correctly apprehends the intent of the legislation, this determination sim ply by the lapse of time would be for all practical purposes conclusive upon the Government, because the Department of