Vanderbilt Law Review


Homer Clark

First Page



The rules of the American game of competition are numerous, diverse and often inexplicable, but none of them is as dubious in purpose or as devious in operation as those found in the statutes prohibiting sales below cost. Such statutes have been enacted in the overwhelming majority of states,' the earliest ones dating back to the Great Depression. Indeed their philosophy has infected the federal antitrust laws. That the impetus back of these statutes was not just a product of depression fears and frustrations is shown by their passage after the depression was over in some states, and during the height of post war prosperity in others. They remain a factor to be reckoned with by businessmen and their legal advisers who wish to avoid the risks of harassment caused by a lawsuit over their pricing policies. It is the purpose of this paper to report critically on the present condition of restrictions on sales below cost, with emphasis on the more recent developments. The discussion will have as a by-product some reflections about the legislative and judicial processes exemplified in the enactment and administration of these statutes.