unreasonable; (2) the question relates to matters of public policy in reference to commerce among the States and with foreign nations, and Congress alone can deal with the subject; (3) this court would encroach upon the authority of Congress if, under the guise of construction, it should assume to determine a matter of public policy; (4) the parties must go to Congress and obtain an amendment of the Antitrust Act if they think this court was wrong in its former decisions; and (5) this court can not and will not judicially legislate, since its function is to declare the law, while it belongs to the legislative department to make the law." Such a course, I am sure, would not have offended the "rule of reason."

But my brethren, in their wisdom, have deemed it best to pursue a different course. They have now said to those who condemn our former decisions and who object to all legislative prohibitions of contracts, combinations and trusts in restraint of interstate commerce, "You may now restrain such commerce, provided you are reasonable about it; only take care that the restraint is not undue.' The disposition of the case under consideration, according to the views of the defendants, will, it is claimed, quiet and give rest to "the business of the country." On the contrary, I have a strong conviction that it will throw the business of the country into confusion and invite widely-extended and harassing litigation, the injurious effects of which will be felt for many years to come. When Congress prohibited every contract, combination or monopoly, in restraint of commerce, it prescribed a simple, definite rule that all could understand, and which could be easily applied by everyone wishing to obey the law, and not to conduct their business in violation of law. But now, it is to be feared, we are to have, in cases without number, the constantly recurring inquiry— difficult to solve by proof-whether the particular contract, combination, or trust involved in each case is or is not an "unreasonable" or "undue" restraint of trade. Congress, in effect, said that there should be no restraint of trade, in any form, and this court solemnly adjudged many years ago that Congress meant what it thus said in clear and explicit words, and that it could not add to the words of the act. But those who condemn the action of Congress are now, in effect, informed that the courts will allow such restraints of interstate commerce as are shown not to be unreasonable or undue.

UNITED STATES v. AMERICAN TOBACCO CO. (221 U. S., 106), SuPREME COURT, 1911.-The American Tobacco Co. was a combination of numerous concerns engaged in the manufacture of tobacco products and their sale in interstate commerce. In all the most important branches of the business (except cigars) it had acquired control of much the greater part of the total business in the United States. Apart from an initial combination of competitors, this was accomplished largely by buying out competitors individually, with the condition that they would not reengage in the business, and merging them into several larger companies. The combination also resorted to the use of bogus independent companies, excessive price cutting, and various other methods of unfair competition.

This combination the court declared to be contrary to both sections 1 and 2 of the Sherman Act, and in this connection defined the meaning of the term "restraint of trade" in the first section, as follows (pp. 179-180):

Applying the rule of reason to the construction of the statute, it was held in the Standard Oil Case that as the words "restraint of trade" at common law and in the law of this country at the time of the adoption of the Antitrust Act only embraced acts or

contracts or agreements or combinations which operated to the prejudice of the public interests by unduly restricting competition or unduly obstructing the due course of trade or which, either because of their inherent nature or effect or because of the evident purpose of the acts, etc., injuriously restrained trade, that the words as used in the statute were designed to have and did have but a like significance. It was therefore pointed out that the statute did not forbid or restrain the power to make normal and usual contracts to further trade by resorting to all normal methods, whether by agreement or otherwise, to accomplish such purpose. In other words, it was held, not that acts which the statute prohibited could be removed from the control of its prohibitions by a finding that they were reasonable, but that the duty to interpret which inevitably arose from the general character of the term restraint of trade required that the words restraint of trade should be given a meaning which would not destroy the individual right to contract and render difficult if not impossible any movement of trade in the channels of interstate commerce-the free movement of which it was the purpose of the statute to protect. The soundness of the rule that the statute should receive a reasonable construction, after further mature deliberation, we see no reason to doubt.

In this excerpt attention is called especially to the statement that "it was held, not that acts which the statute prohibited could be removed from the control of its prohibitions by finding that they were reasonable," but that the duty to interpret these general terms required that a reasonable construction should be given them.

Justice Harlan concurred with the court in the judgment rendered, but dissented with respect to certain matters connected with the decree, and particularly with respect to the interpretation of the term "restraint of trade" in the Sherman Act. He said in part (p. 192):

By every conceivable form of expression, the majority, in the Trans-Missouri and Joint Traffic cases, adjudged that the act of Congress did not allow restraint of interstate trade to any extent or in any form, and three times it expressly rejected the theory, which had been persistently advanced that the act should be construed as if it had in it the word "unreasonable" or "undue." But now the court, in accordance with what it denominates the "rule of reason," in effect inserts in the act the word "undue," which means the same as "unreasonable," and thereby makes Congress say what it did not say, what, as I think, it plainly did not intend to say and what, since the passage of the act, it has explicitly refused to say. It has steadily refused . to amend the act so as to tolerate a restraint of interstate commerce even where such restraint could be said to be "reasonable" or "due." In short, the court now, by judicial legislation, in effect amends an act of Congress relating to a subject over which that department of the Government has exclusive cognizance.

Section 8. Monopolize and attempt to monopolize.

*

*

*

The decisions under the Sherman Act which have depended on the application of section 2 of the law have been comparatively infrequent, at least in the Supreme Court, and in those decisions the instances where a clear statement appears of the meaning of the words "monopolize" and "attempt to monopolize" are rare. This is partly because in such cases the court has often been confronted with a complicated state of facts embracing a series of devel

opments in business organization, a great variety of methods of conducting business, and a complex economic result.

The most important example of monopoly brought before the court was probably the Standard Oil Co., while one of the most subtle schemes to establish monopoly is found in the Wall Paper combination. Both of these are discussed below.

In the statement of facts in the Standard Oil case, a part of that given in the court below which is expressly referred to as being considered in the opinion, has been also summarized.

STANDARD OIL Co. v. UNITED STATES (221 U. S., 1), SUPREME COURT, 1911.-The facts in this case have been stated generally in another connection. (See p. 86.) Especially pertinent here are the following facts: The Standard Oil Co. had acquired almost complete domination of pipe-line transportation and was in a position to dictate crude-oil prices. Partly in consequence of this fact and partly in consequence of the combination of competing concerns under the control of a single corporation, it refined and sold much the greater part of the oil refined or sold in the United States.

The court held that the Standard Oil combination was in violation of section 2 of the Sherman Law. To "monopolize" or "attempt to monopolize," the court said, was forbidden with a view to make more complete the prohibitions of section 1, namely, by forbidding these methods of restraining trade also.

The court said in part (pp. 61, 62, 74, 75):

Undoubtedly, the words "to monopolize" and "monopolize" as used in the section reach every act bringing about the prohibited results. The ambiguity, if any, is involved in determining what is intended by monopolize. But this ambiguity is readily dispelled in the light of the previous history of the law of restraint of trade to which we have referred1 and the indication which it gives of the practical evolution by which monopoly, and the acts which produce the same result as monopoly, that is, an undue restraint of the course of trade, all came to be spoken of as, and to be indeed synonymous with, restraint of trade. In other words, having by the first section forbidden all means of monopolizing trade, that is, unduly restraining it by means of every contract, combination, etc., the second section seeks, if possible, to make the prohibitions of the act all the more complete and perfect by embracing all attempts to reach the end prohibited by the first section, that is, restraints of trade, by any attempt to monopolize, or monopolization thereof, even although the acts by which such results are attempted to be brought about or are brought about be not embraced within the general enumeration of the first section. And, of course, when the second section is thus harmonized with and made as it was intended to be the complement of the first, it becomes obvious that the criteria to be resorted to in any given case for the purpose of ascertaining whether violations of the section have been committed, is the rule of reason guided by the established law and by the plain duty to enforce the prohibitions of the act and thus the public policy which its restrictions were obviously enacted to subserve. And it is worthy of observation, as we have previously remarked concerning the common law, that although the statute by the comprehensiveness of the enumerations embodied in both the first and second sections makes it certain that

1 See pp. 4-5, 6.

its purpose was to prevent undue restraints of every kind or nature, nevertheless by the omission of any direct prohibition against monopoly in the concrete it indicates a consciousness that the freedom of the individual right to contract when not unduly or improperly exercised was the most efficient means for the prevention of monopoly, since the operation of the centrifugal and centripetal forces resulting from the right to freely contract was the means by which monopoly would be inevitably prevented if no extraneous or sovereign power imposed it and no right to make unlawful contracts having a monopolistic tendency were permitted. In other words that freedom to contract was the essence of freedom from undue restraint on the right to contract.

We see no cause to doubt the correctness of these conclusions, considering the subject from every aspect, that is, both in view of the facts established by the record and the necessary operation and effect of the law as we have construed it upon the inferences deducible from the facts, for the following reasons:

(a) Because the unification of power and control over petroleum and its products which was the inevitable result of the combining in the New Jersey corporation by the increase of its stock and the transfer to it of the stocks of so many other corporations, aggregating so vast a capital, gives rise, in and of itself, in the absence of countervailing circumstances, to say the least, to the prima facie presumption of intent and purpose to maintain the dominancy over the oil industry, not as a result of normal methods of industrial development, but by new means of combination which were resorted to in order that greater power might be added than would otherwise have arisen had normal methods been followed, the whole with the purpose of excluding others from the trade and thus centralizing in the combination a perpetual control of the movements of petroleum and its products in the channels of interstate commerce.

(b) Because the prima facie presumption of intent to restrain trade, to monopolize and to bring about monopolization resulting from the act of expanding the stock of the New Jersey corporation and vesting it with such vast control of the oil industry, is made conclusive by considering (1) the conduct of the persons or corporations who were mainly instrumental in bringing about the extension of power in the New Jersey corporation before the consummation of that result and prior to the formation of the trust agreements of 1879 and 1882; (2) by considering the proof as to what was done under those agreements and the acts which immediately preceded the vesting of power in the New Jersey corporation as well as by weighing the modes in which the power vested in that corporation has been exerted and the results which have arisen from it.

CONTINENTAL WALL PAPER Co. v. LOUIS VOIGHT & SONS Co. (212) U. S., 227), SUPREME COURT, 1909.-More than 30 companies and firms manufacturing wall paper in various States and selling the same in interstate commerce formed a combination which comprised 98 per cent of the production and sales thereof in the United States. This combination organized the Continental Wall Paper Co., whose stock was owned and whose directors were chosen by the parties to the combination, and which was constituted a selling company for the said parties.

The Continental Wall Paper Co. in the further carrying out of the plan of combination made agreements with the jobbers of wall paper intended to compel them to patronize exclusively the members of the combination and to sell the goods purchased at prices fixed by the combination. Jobbers refusing such agreement were not to be supplied with wall paper. Immediately after forming this combination

the prices of wall paper were greatly enhanced, both to the jobbers and to consumers. One of the jobbers who owed the Continental Wall Paper Co. for wall paper purchased under such a contract was sued for payment thereon, and set up in defense that the obligation was not enforceable, for the reason that the contract was a part of a combination which was contrary to the Sherman Act. The plaintiff demurred thereto, thus confessing for legal purposes the truth of the facts alleged, and when the demurrer was overruled refused to plead further. The validity of the defense depended on whether this contract was a part of a combination in violation of the Antitrust Act. It was held that it was in violation of both sections 1 and 2 of the said act.

The court said in part (p. 255):

That the combination represented by the plaintiff company is within the prohibitions of the above act of Congress is clear from the facts admitted by the demurrer. We assume, therefore, without discussion-for discussion is unnecessary--that there is a combination, of which the Continental Wall Paper Company is the representative, and that, in violation of that act, such combination was formed with the intent, and will have the effect, directly, to restrain as well as monopolize trade and commerce among the several States and with foreign nations.

The court approved also of the following part of the opinion of the court below (148 Fed., 947-948):

The conspiring mills were situated in many states. The consumers [of wall paper] embraced the whole citizenship of the United States. The jobbers and wholesalers, who were to be coerced into contracts to buy their entire demands from the Continental Wall Paper Company or be driven out of business, were in every state.

Before the combination, each of the combining companies was engaged in both state and interstate commerce. The freedom of each, with respect to prices and terms, was restrained by the agreement and interstate commerce directly affected thereby, as well as by the enhancement of prices which resulted. A more complete monopoly in an article of universal use has probably never been brought about. It may be that the wit of man may yet devise a more complete scheme to accomplish the stifling of competition; but none of the shifts resorted to for suppressing freedom of commerce and securing undue prices, shown by the reported cases, is half so complete in its details. None of the schemes with which this may be compared is more certain in results, more widespread in its operation, and more evil in its purposes. It must fall within the definition of a "restraint of trade," whether we confine ourselves to the common-law interpretation of that term, or apply that given to the term as used in the federal act.

Section 9. Trading and manufacturing combinations.

The Sherman Act is expressly directed against combinations in restraint of interstate trade; hence it is unnecessary to cite cases to show that trading combinations may be in the purview of the act. In fact, it must be shown that a combination directly affects interstate commerce or trade in order to bring it within the law. For this reason also an exhaustive statement of what is meant by interstate commerce would incidentally show what branches of business