Vanderbilt Law Review

First Page



Corporations intent upon expanding via the acquisition route have had three statutory hurdles placed in their way by the Congress of the United States. As hurdles, the first two, the Sherman Act of 1890 and the Clayton Act of 1914, were failures. A judiciary which refused to give effect either to the language or intent of the acts nullified completely their usefulness as anti-merger weapons.

The third hurdle, the Celler-Kefauver Amendment to the Clayton Act, was enacted in 1950. Relatively few judicial opinions have interpreted this act, "new section 7," as it is called. It is clear, however, that it has little to fear in the way of a hostile judiciary or Federal Trade Commission. So far at least, delays which can be characterized only as incredible have been the sole serious problem for "new section 7.

"Shortly before the turn of the century, a great merger movement began in the United States. Although the Sherman Act was the law of the land, effective action under it could be taken only after a monopoly had been achieved, if then. By 1914, it was clear to a majority of the Congress that, if the growing merger movement was to be checked, new legislation was needed.

As enacted into law in 1914, section 7 of the Clayton Act contained a civil prohibition against the acquisition of stock of one corporation by another where the effect of the acquisition "may be to substantially lessen competition between the corporation whose stock is so acquired and the corporation making the acquisition, or to restrain such commerce in any section or community, or tend to create a monopoly of any line of commerce."