Clayton Antitrust Act

Clayton Antitrust Act, legislation passed by the United States Congress in 1914 to prohibit certain monopolistic practices that were then common in finance, industry, and trade (see Monopoly). Sponsored by the Alabama congressman Henry De Lamar Clayton, the Clayton Antitrust Act was adopted as an amendment to the Sherman Antitrust Act. Designed to deal with new monopolistic practices, the act contained three distinct types of provisions, covering corporate activities, remedies for reform, and labor disputes.

The provisions relating to corporate activities declared illegal such practices as local price-cutting to freeze out competitors, exclusive selling or leasing, and other forms of price discrimination. The law also forbade intercorporate stock holdings that allow one firm to gain control over another, thereby lessening competition, and certain interlocking directorates, in which a few persons control an industry by serving simultaneously as directors of related corporations.

The act permitted individual suits for damages from discrimination or exclusive selling or leasing, and made directors or officers of corporations responsible for infractions of the antitrust laws. Appeals were directed to the Federal Trade Commission, which was, in part, created to enforce the antitrust provisions of the act and which was empowered to issue cease-and-desist orders when illegal activities had been proved.

The act also affirmed the right of unions to strike, boycott, and picket. Its provisions dealing specifically with labor matters limited use of the federal injunction in labor disputes; at the same time, unions were explicitly excluded from the restrictions of antitrust laws. Unfavorable court interpretations weakened the act, however, and additional legislation was required finally to carry out its aims.