ment under consideration operates as a restraint upon interstate trade and commerce. The prohibition of the Anti-Trust Act, as construed by this court, applies to all contracts in restraint of trade or commerce, and is not confined to those in unreasonable restraint.

But as a contract in restraint of commerce, the Trans-Missouri agreement is crude and ineffective when compared with the Joint Traffic agreement. The TransMissouri provides a penalty for competition. The Joint Traffic goes further, and contains provisions designed to deprive companies of the means of competing, while removing the inducement to compete. Control of the soliciting and contracting freight and passenger agencies is placed in the managers, who are authorized to organize joint agencies. This done, the supervision of the sources of securing business being thereby given to the managers, they are charged with the duty of apportioning the competitive traffic equitably among the members of the association.

Of course the purpose is to remove the inducement to compete. An agreement to apportion traffic operates the same as one to divide earnings. Railroads which pool their earnings have no inducement to compete. All the individual company earns goes into the pool, and it only gets its share after all. So where the traffic business is pooled, if a company by competing gets more than its share, it must yield the excess by permitting a diversion of the traffic from its line to lines which are short. A strict account is kept of the traffic carried by each trunk line. If the traffic of a particular line exceeds its percentage, the line is deemed "over," and must account for the excess to the lines which are "short."

In prohibiting pooling, Congress did not make it a condition that the rates established and maintained under a pooling agreement should be unreasonable. It sufficed they would be arbitrary, uninfluenced by competition. The public would be placed at the mercy of the traffic managers.

So, too, in the case of a contract in restraint of trade prohibited by the anti-trust law; it is enough if the agreement interferes with those natural laws which ordinarily determine rates; it is enough if it restricts competition; it is enough if it puts it in the power of the combined railroads arbitrarily to fix rates. We do not have to inquire whether the rates fixed are reasonable or unreasonable. It is the power through combination to fix rates arbitrarily, which is prohibited.

The Trans-Missouri case was elaborately argued and carefully considered. A petition for a rehearing was presented and denied. The decision has been accepted and acted upon by the departments of the government, and by the courts, both state and Federal, as definitively settling the meaning and scope of the Anti-Trust Act when applied to traffic associations among competing interstate railway systems. The decision was not only a just, but an eminently salutary one. I shall not concede that the principles it laid down remain questionable. I shall not

admit that it is necessary for me by argument to fortify the positions taken by this court in that case. The anti-trust law as there construed is the law of the land.

The wisdom of Congress in prohibiting all agreements in restraint of trade among interstate railway systems is even more manifest now than when the Trans-Missouri case was decided. At the time of the argument of the Trans-Missouri case it was still to some extent a mooted question whether the Interstate Commerce Commission was empowered to determine what are fair and reasonable rates, and to enforce such rates. This question is no longer open.

Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co. 167 U. S. 479, 42 L. ed. 243; Interstate Commerce Commission v. Alabama Midland R. Co. 168 U. S. 144, 42 L. ed. 414.

It will probably be urged that any illegality in the agreement is cured by § 3 of article 7,

which reads;

"Sec. 3. The powers conferred upon the managers shall be so construed and exercised as not to permit violation of the Interstate Commerce Act, or any other law applicable to the premises, or any provision of the charters or the laws applicable to any of the companies parties hereto; and the managers shall co-operate with the Interstate Commerce Commission to secure stability and uniformity in the rates, fares, charges, and the rules established hereunder."

An injunction to construe and exercise powers conferred so as to permit no violation of law is an admission that the powers may beso construed and exercised as to violate law. If the anti-trust law prohibited only those contracts in unreasonable restraint of trade or commerce there might be saving force in this section. But the anti-trust law prohibits all contracts in restraint of trade or commerce. Whether the rates be reasonable or unreasonable, an agreement providing for their establishment and maintenance by an association of interstate railways is prohibited. The managers can exercise none of the essential powers conferred by the agreement without violating the law. In the matter of the essential powers it is not a question of method or degree; the powers cannot be exercised because they are in themselves illegal. The association is itself illegal. It is formed for the purpose of controlling certain competitive traffic. The central authority, the managers, is given the power to establish and maintain rates on that traffic. Take away from the association the power to establish and maintain rates, and it immediately falls to pieces. It ceases to have a raison d'etre.

It will be observed that the managers are not instructed to co-operate in securing reasonable rates. The latter part of this section is inserted to support, not the real, but ostensible purpose of the association, namely of aiding the Interstate Commerce Commission to enforce the law. Assuming the Commission powerless to enforce the law, the railroads ignored both the Commission and the law, and proceeded to form an association outside of the law and in violation of railroads shatter the law, and then combine to support the fragments.

It was contended below that the bill was multifarious. There is but one cause of action in the bill,-namely, the agreement. Upon that the bill is based. It seeks to enjoin the execution of an illegal contract. The averments of intent in the bill are unnecessary and immaterial. At the most they are conclusions of law. The court will examine the agreement and determine the question of law with respect to its meaning and effect; will determine whether the agreement restrains trade or commerce in any way so as to violate the law. If the agreement is prohibited by the anti-trust law the court will enjoin its execution; and the court will do this irrespective of whether the agreement does or does not also violate the Interstate Commerce Act, or those general principles of law which prevent any interference with interstate commerce.

It is not necessary for the government to insist that the agreement violates more than one law. It is clearly illegal as a contract in restraint of trade or commerce under the anti-trust law. The fact that it also violates some other law, if it does, assuredly will not cure its illegality under this law, or prevent the court from er enjoining its execution. A thing which is doubly bad does not, there fore, become good. The rule of double negatives does not apply. Nor is the government deprived of the power to restrain the execution of a contract in restraint of trade or commerce under the anti-trust law because the contract contains a provision under which individuals have committed, or may commit, offenses punishable under the Interstate Commerce Act. If a man threatens my life I am not to be deprived of the right to put him under bond to keep the peace be cause he has also stolen my property.

The authority of the government to maintain this suit is sustained in United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 343, 41 L. ed. 1007, 1028; citing Re Debs, 158 U. S. 564, 39 L. ed. 1092; Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U. S. 184, 40 L. ed. 935, 5 Inters. Com. Rep. 391; Texas & P. R. Co. v. Interstate Commerce Commission, 162 U. S. 197, 40 L. ed. 940, 5 Inters. Com. Rep. 405.

Messrs. James C. Carter and Lewis Cass Ledyard, for the Joint Traffic Association, appellee:

The object of the bill is to procure an ad. judication that a certain agreement entered into between a large number of railroad companies forming most, but not all, of the lines or systems engaged in the business of raild transportation between Chicago and the Atlantic coast, for the purpose of forming an association for the better regulation of a certain part of the traffic of those lines and systems, is illegal and void, and enjoining its execution.

road

Congress in 1887 enacted the Interstate Commerce Law, the main design of which was to abolish discrimination in rates and secure a greater degree of uniformity, and to

interstate transportation to file with the Commission and publish schedules of their respective rates, and forbade the carriage of goods for any greater or less compensation than that specified in the published rates.

Even before the passage of the law the rival lines engaged in an effort to agree upon the schedules which each should file, and had reached such agreement in time to file and publish them in compliance with the provi sions of the law.

The agreement in question was believed to promise great benefits and to make it in the interest of all to comply with the Interstate Commerce Act, and to detect, expose, and punish any who, from a mistaken view of interest, should violate it.

It made no effort to prevent competition: but sought to devise a scheme which would compel any competition to be fair, lawful, and open, and enable any rival to meet it without violating any law.

Unfortunately, large corporations are viewed with a jealousy which does not confine itself at all times within the bounds of reason, and this sentiment creates hostilities to which it is but natural, at least, that public officials should yield. Transactions which, in the absence of political prejudice and passion, would pass unnoticed by those not immediately affected by them, em, are subject to hostile scrutiny; and it was not unnatural that such an agreement should raise a clamor that it was designed to raise rates. There never was a pretense, however, that under the agreement there was the slightest exaction of unreasonable charges. On the contrary the schedules of rates agreed upon and filed with the Interstate Commerce Commission had never been objected to by that body, and were notoriously lower than those imposed for similar services in any other part of the world.

The answer denies every allegation of unlawful act or of unlawful intent, unless the making of the agreement itself was an unlawful act.

It may seem at first that we are aiming to persuade the court to reconsider its reasoning and determinations in the recent case of United States v. Trans-Missouri Freight Association.

It may be that one of the questions now sought to be presented might have been made in that case and a decision of it obtained; but it is quite certain that the question was not raised.

The precise question which was considered and determined in the case above referred to was this: Assuming that the agreement was one in restraint of trade, would the circumstance that the restraint actually imposed by it was reasonable relieve it from the condemnation of the statute? Or, in other words, does the statute by a true construction condemn all agreements in restraint of interstate trade and commerce, or such only as were at common law unlawful?

Prior to, and at the time of, the passage of this law there were, as there still are, certain tendencies in the industrial world which drew widespread attention and excited in were seen or supposed to be under the control of great aggregations of capital, either in the hands of individuals united under some form of agreement, partnership or other, or contributed as the capital of corporate bodies. Some of the most conspicuous were called by the vague name of "trusts," and this term came to be employed in a general way to designate all of them. For obvious reasons, and quite aside from the question whether their objects and effects are mischievous or beneficial, such combinations of capital are not popular, and the designation "trust" came to be rather a re proachful one.

Undoubtedly it may be possible for a large aggregated capital to wield greater power in many ways than would be possible for the same amount distributed among many separate owners or managers, and the suspicion was entertained that such power was employed in controlling markets, and perhaps in controlling legislation, cion, and it was also thought to be an instrumentality by which the unequal distribution of wealth was fos tered and increased. The disfavor thus excited was, as was natural, turned to political account. Those opposed to a protective tariff charged upon its advocates that they were favoring and stimulating trusts, and the latter felt the need of repelling the charge by doing something to show that they were the declared enemies of trusts.

Under such circumstances it was quite natural that schemes of legislation aimed against these supposed public enemies should be started, and any opposition to them would naturally draw upon the authors of it the reproach that they were the friends, and perhaps the paid defenders, of these powerful interests.

While, therefore, all, or nearly all, professed themselves in favor of repressive legislation, the question what legislation could be contrived was a difficult one and suggested some difficult questions. How was a trust to be legally defined so that a prohibition of it should not include a prohibition of the exercise of the clearest constitutional rights? Congress surely could not prevent the creation of corporations under state laws, or limit the capacity of forming partnerships, or in any manner interfere with the internal business of states. And was it certain that these so-called trusts were in every instance necessarily mischievous? Indeed, sensible legislators for the most part understood very clearly that the things complained of were but the necessary incidents and consequences of the progress of industry and civilization, and could not be arrested without checking the advance of the nation and crippling it in the fierce competitions with other nations,

charge was that these combinations were in some form monopolies and in restraint of trade; but Congress did not in the remotest degree attempt to define what a monopoly or restraint of trade was. It was, however, perfectly safe to declare that if these combinations did in any case create monopolies or restraints upon trade, they should be prohibited from doing so in the future; and this is what Congress did, and all it did, by passing the act in question. It prohibited contracts and combinations to create monopolies or restrain trade, and left it to the courts, without a word of direction or instruction, to determine what contracts did create monopolies or restrain trade, and what did not.

It cannot be said that Congress has done an unwise or imprudent thing, and that if calamity occurs the fault lies at its door. It has prohibited nothing but contracts and combinations to create restraints of trade and monopolies. These, when properly de fined are, beyond question, public mischiefs and ought to be prohibited. If any useful thing becomes stricken down by the law, it must be the result of some erroneous interpretation.

The first question we design to consider is whether the agreement violates any of the provisions of the act referred to. To this end it is of much importance to have in mind the particular nature of the subject with which this act deals, and how that subject has been heretofore treated in law and legislation. It is obvious that Congress conceived itself to be dealing with acts supposed to be productive of injury to the public, and of injury to such an extent as to justify repressive legislation.

It is not contracts only of a certain character which are condemned, but they are coupled together with certain other acts, presumably of a similar nature or tendency,namely, combinations or conspiracies in restraint of trade, and monopolies, or combinations or conspiracies to monopolize. Contracts therefore are dealt with, not so much as contracts, but as one form of acts relating to trade and commerce, assumed to be injurious in their tendency and effect.

That contracts of a certain class may be opposed to sound public policy has been recognized in the law from a very early period. The grounds or reasons of policy on which they are held void or illegal are very numerous and varied, but a class embracing numerous instances is formed of such as are supposed to have an injurious effect upon trade or commerce; between these, however, there is quite a marked distinction observable in the way they are treated in the law. One description embraces simply ordinary busi

of the power of aggregated capital, and not at the aggregations themselves. Under these circumstances Congress proceeded very cautiously, and enacted the only measure which seemed possible without passing the plainest constitutional limits. It did not attempt to define "trusts" or limit aggrega

tual profit and advantage, a breach of which would result in pecuniary loss or damage to the one or the other, and a demand for redress. In such cases the parties expect and intend to enforce the contract, and look to the ordinary legal remedies as the means of enforcing it. Contracts whereby a business is sold and the seller covenants that he will not thereafter carry it on, or where a man takes an apprentice with an agreement that he will not set himself up in opposition to his master in trade, supply familiar examples of this character.

Inasmuch as such contracts would not be entered into unless it was believed that the law would afford redress in case of a breach of them, the repressive purposes of the law, where they are supposed to be opposed to public policy, are, in general, fully satisfied by declaring them void and denying redress, and this is usually the extent of the notice which the law takes of them. There is no occasion for criminal legislation, both for the reason that there is not present, ordinarily, any criminal purpose, and, if there were, repression is sufficiently accomplished with out a resort to it. The doctrine respecting contracts of this character belongs, therefore, to the law of contracts.

But there is another and much smaller description of contracts supposed to be injurious to trade, of quite a different character. They are not, properly speaking, business transactions. They do not involve the sale, leasing, or exchange of property, or the hire of services; nor does a breach of them usually result in distinct and ascertainable pecuniary loss. They are not, indeed, entered into by parties in different interests, as in the case of buyer and seller, one of which expects to gain something from the other, but by parties in the same interest having in view an object for the common good of all; nor do the parties to them generally look to, or rely upon, any legal remedies to secure obedience to them. They spring out of circumstances which impress the parties to them with the belief that they have a common interest, or that it is expedient to create a common interest among them, and seek to control or regulate the conduct of each other in relation to business. Instances of this description of agreement are found where laborers or employers unite, in the form of agreement, to regulate hours of labor or prices, or where merchants or tradesmen combine to transact their business in certain prescribed ways, or to establish uniform prices for their goods, or to suppress or regulate competition among themselves; or where a class of producers or dealers combine together to control a product or a business, with a view of imposing upon others their own terms as to prices, or other incidents of the business.

The marked distinction between these cases and the ordinary business transactions first spoken of is that in the latter there is a difference of interest, sometimes regarded as arded a hostility of interest, between the parties, each seeking to gain the utmost from the other; whereas in the former the parties are in the same interest, each seeking the same end. The term "contract" does not well express this sort of agreement. It is a uniting together for a common purpose, -a combination, or, when thought to be of an objectionable character, a conspiracy. Such unions always suppose agreement, but it need not be in writing; where it is in writing it is

often called an agreement, or contract; but in giving it this name we should not lose sight of its real character. In reality it is simply an act, and innocent or guilty according as the law may be inclined to regard it.

It is manifest that where the law does regard it as mischievous, and to such a degree as to call for repression, it is not enough to simply declare it illegal. The practice may nevertheless be persisted in, and as it does not rely for its efficacy upon legal remedies, the mere withholding of such remedies may be ineffectual. The action, therefore, which the law usually takes in respect to such socalled contracts, is in the form of prohibition and penalty; and the subject belongs, not to the law of contracts, but to the criminal law, where it is usually dealt with under the head of conspiracy.

We do not mean by the above observations that there may not be instances which partake to a greater or less degree of the qualities of both the classes above mentioned; but the distinction between them is so constant and pervading that it will be at once recognized.

As a conclusion to what is said we desireto point out that the legal doctrine and policy to which this Anti-Trust Act belongs is manifestly the one last described. The circumstance that contracts are grouped together with combinations and conspiracies, and made the subject of criminal treatment, shows this very plainly.

The inaptitude of some of the language of this legislation is quite apparent. Undoubtedly the object of Congress was to reach that class of supposed mischiefs which flow from combinations. But the great bulk of the cases in which the courts have felt called upon to say anything about contracts in restraint of trade has been the business transactions first alluded to, in which an agreement has been entered into not to exercise a particular calling, as, where the keeper of a well-patronized tavern sells out his establishment and goodwill, and covenants not to further carry on the business. Such agreements at the common law have been held valid or void according to the supposed reasonableness of the covenant; but surely even when void, there was nothing about them calling for the intervention of the criminal law. And yet this statute bunches the valid and void all together, and makes them all criminal, when probably there was not the remotest intention to make any of them criminal.

These observations, of course, fully admit that the particular agreement or combination against which this action is aimed would be, assuming that the act covers the contracts between railroad companies, obnoxious to the penalty imposed by the act, provided it were in fact in restraint of trade or commerce between the states. That it is in fact in restraint of trade or commerce must be shown before this action can be maintained, and this is the proper subject for discussion in this action. This question is broadly open and unaffected by any decision of this court, and we expect to show that the agreement is, not only not in restraint of