Arrow-Hart & Hegeman Elec. Co. v. Federal Trade Comm'n
In Arrow-Hart & Hegeman Elec. Co. v. Federal Trade Comm'n, 291 U.S. 587 (1934), the Supreme Court, by a divided vote, ruled on the scope of the Federal Trade Commission's remedial powers under the original Clayton Act.
After the Commission had issued a 7 complaint against a holding company which had been formed by the stockholders of two manufacturing corporations, steps were taken to avoid the Commission's jurisdiction. Two new holding companies were formed, each acquired all the common stock of one of the manufacturing companies, and each issued its stock directly to the stockholders of the original holding company. This company then dissolved and the two new holding companies and their respective manufacturing subsidiaries merged into one corporation.
The Supreme Court held that the Commission had no authority, after the merger, to order the resulting corporation to divest itself of assets.
An essential part of this holding was that the merger in question, which was technically a consolidation similar to that here planned by PNB and Girard, was not a stock acquisition within the prohibitions of 7: "If the merger of the two manufacturing corporations and the combination of their assets was in any respect a violation of any antitrust law, as to which we express no opinion, it was necessarily a violation of statutory prohibitions other than those found in the Clayton Act." 291 U.S., at 599; see id., at 595.