State, taking [145] with them paraphernalia and stage properties. constitutes interstate commerce.

It is not necessary to cite the many authorities found in the books sustaining this conclusion, as they will be found collated in the opinions herein before cited. It is sufficient to say that as new methods of transacting business are devised, if they are found to be in effect methods of carrying on commerce in any business, and the means for commercial transactions between the owner of the article on the one hand, and the person who wants to deal in it or use it in carrying on his business on the other hand, whether it be manufacturing, selling, trading, leasing, transportation, communication, or information, and it is sent or transported from one State to another, it is interstate commerce, and therefore subject to be regulated by Congress under the commerce clause of the Constitution.

The bill charges that the machinery manufactured by the defendants is leased for the purpose of enabling the lessees to manufacture shoes; that they deal with over 1,500 shoe manufacturers in all parts of the United States, and, when the leases are made the machinery is shipped by the defendants from the State of Massachusetts, the place of manufacture, to other States of the Union and to foreign countries. Upon these facts there can be no other conclusion than that the defendants are engaged in interstate commerce, and subject to be regulated by Congress. Whether it applies to leases made and sold in the same State, and not transported to another State, it is unnecessary to determine on this motion, as the bill charges shipments to other States. By reference to the act under consideration it will be noted that, while section 1 defines the word "commerce" as used in the act, section 3 prohibits any person engaged in such commerce from doing the acts prescribed and enumerates them. The act is not limited to leases, and sales in interstate commerce, as is the Employers' Liability Act of April 22, 1908 (ch. 149, 35 Stat. 65 [Comp. St. 1913, secs. 8657-8665]); but the language employed is like that used in the amendment of March 2, 1903 (ch. 976, 32 Stat. 943 [Comp. St. 1913, secs. 8613-8615]), to the Safety Appliances Act (act March 2, 1893, ch. 196, 27 Stat. 531 [Comp. Št. 1913, secs. 8605-8612]). This amendment had, prior to the enactment of the Clayton Act, been held to embrace all locomotives, cars, and vehicles used on a railway that is engaged in interstate commerce, and is not confined exclusively to vehicles engaged in interstate commerce. (Southern Railway Co. v. United States, 222 U. S. 20, 32 Sup. Ct. 2, 56 L. Ed. 72, reaffirmed at the present term of the Supreme Court in Texas & Pacific R. Co. v. Rigsby, 241 U. S. 33, 36 Sup. Ct. 482, 60 L. Ed. 874.) But whether this act should be so construed, and held to apply to the intrastate business as well as the interstate business of the defendants, in view of the fact that the defendants are charged to be engaged in interstate commerce, need not be determined now as the question may never arise. Reference is made to it only for the reason that during the oral argument counsel for defendants stated that a very large part of the defendants' business is intrastate.

[146] [11] Do the allegations in the complaint show a violation of section 3 of the Clayton Act?

The act declares unlawful any lease, etc., where the price is fixed, or a discount or rebate upon such price is granted, under the condition, agreement, or understanding that the lessee or purchaser thereof is not to use or deal in the goods, etc., of a competitor of the lessor, or seller, where the effect of such lease, sale, or contract for sale, or such condition, agreement, or understanding, may be to substantially lessen competition, or tend to create a monopoly in any line of commerce. For the purpose of aiding in the construction of the act, counsel in their argument have read copious extracts from the reports and debates in Congress while the act was under consideration. They have also furnished the court with copies of these reports and debates, and they have been carefully read; but so far as the construction of the act is concerned the court does not feel justified to consider them. It is only when the language of a statute is ambiguous that these sources can be referred to. If the language is clear and free from ambiguity, there is nothing for the courts to construe. (United States v. Union Pacific Railroad, 91 U. S. 72, 23 L. Ed. 224; United States v. Trans-Missouri Freight Asso., 166 U. S. 290, 17 Sup. Ct. 540, 41 L. Ed. 1007; Dunlap v. United States, 173 U. S. 65, 19 Sup. Ct. 319, 43 L. Ed. 616; Maxwell v. Dow, 176 U. S. 581, 20 Sup. Ct. 448, 494, 44 L. Ed. 597; Dewey v. United States, 178 U. S. 510, 20 Sup. Ct. 981, 44 L. Ed. 1170; MacKenzie v. Hare, 239 U. S. 299, 307, 36 Sup. Ct. 106, 60 L. Ed. 297.)

Aside from this the record of the proceedings of the two Houses of Congress shows that section 3 of the Clayton Act, as finally enacted, differs materially from the section as passed by each House. The words "where the effect of such lease, sale, contract for sale, or such condition, agreement, or understanding may be to substantially lessen competition, or tend to create a monopoly in any line of commerce," are not found in either of the acts as passed by the House of Representatives or the Senate. Nor does the act as finally passed make the violation of that section a penal offense, although each of the Houses had made such a provision. The act as finally passed was the result of the conference committees appointed by the two Houses. What induced the conferees to make the changes, and Congress to adopt them in the final enactment of the statute, is unknown. Whether the speeches made, while the bill was pending, influenced the conference committees, and, if so, to what extent, is merely speculative, and for the courts to consider them in construing the act, as finally passed, might be misleading.

[12] A careful reading of this section of the act leaves no room for doubt as to what Congress intended. The language is plain, and the court is unable to find any ambiguity in it which would make it necessary to resort for aid in its construction to any source outside the act itself. In plain and concise language it declares that it shall be unlawful for any person engaged in interstate commerce to lease, sell, or contract for sale of any commodity, whether patented or not. for use, consumption, or resale, and fix a price for, a discount from, or rebate up[147]on such price, on the condition, agreement, or understanding, that the lessees shall not purchase such articles from the competitors of the lessor or the seller, and then is added:

If the effect of such an agreement, or understanding, may be to lessen competition, or tend to create a monopoly.

That the leases made by the defendants, as shown by the extracts attached to the complaint as exhibits, provide for rebates on condition that the lessee shall only use the machines and materials manufactured and dealt in by the defendants, and forbids the use of machines purchased from other manufacturers, under penalty of having the leases canceled and machines taken from them by defendants, is beyond question. But it is claimed that there is nothing in the leases whereby the lessees covenant or bind themselves not to use any machines manufactured by other parties, or purchase materials which are dealt in by the defendants, from others. This is true, but as the lessors retained the right, in case any other machines are used in the manufacture of shoes than those manufactured by the defendants, of canceling the leases and removing the leased machines, and further provide for a rebate to those who comply with these terms, which those using other machines or material do not receive, there is an implied promise on the part of the lessees not to violate these conditions of the leases, or suffer the penalties set out in the leases. It is charged in the bill:

In nearly all cases, however, they [lessees] are deterred from doing so by the said "tying clauses," and by fear of the serious financial consequences that would follow their violation. Some indispensable machines can be obtained only from the defendants; for example, the stitch indenter and burnisher.

Exhibit 5 shows that the machine therein mentioned is protected by letters patent of the United States and provides that:

The lessee is hereby licensed under letters patent of the United States No. 849,245, dated April 2, 1907, to manufacture by the use of the principal machinery hereby leased, during the continuance in force of this lease and license, the patented insoles covered by said letters patent, and to use such patented insoles so made by the lessee in the manufacture of welted or turned boots, shoes, or other footwear, which have been or are being manufactured as provided in article 5 hereof.

The acceptance of a deed poll containing a provision that the grantee assumes payment of a certain mortgage or lien on the premises conveyed binds the grantee to the performance of the terms, and an action, in some States at law, while in others in equity, will lie on the implied promise. (Keller v. Ashford, 133 U. S. 610, 10 Sup. Ct. 494, 33 L. Ed. 667; Willard v. Wood, 164 U. S. 502, 17 Sup. Ct. 176, 41 L. Ed. 531; Fiske v. Tolman, 124 Mass. 254, 26 Am. Rep. 659; Locke v. Homer, 131 Mass. 93, 41 Am. Rep. 199; Johnson v. Muzzy, 45 Vt. 419, 12 Am. Rep. 214; Patton v. Adkins, 42 Ark. 197; Dismukes v. Halpern, 47 Ark. 317, 1 S. W. 554; Hand v. Kennedy, 83 N. Y. 149; Bowen v. Beck, 94 N. Y. 86, 46 Am. Rep. 124; Finley v. Simpson, 22 N. J. Law, 311, 53 Am. Dec. 252; Crowell v. St. Barnabas Hospital, 27 N. J. Eq. 650; Maule v. Weaver, 7 Pa. 329.) The right to impose a [148] heavy penalty for doing certain things is just as effective to prevent them as a covenant not to do them.

It is therefore unnecessary that the lessees should bind themselves to these conditions or agreements by covenants. It is sufficient if the natural and inevitable effect of the leases, accepted by them, leads to the same result as if they had in express terms bound themselves not to use any other machines or materials than those manufactured or dealt in by the defendants. But, to remove any doubt upon the subject, Congress, out of abundant caution, added the words "or under

standing" after the words "contracts or agreements." The word understanding," as defined by lexicographers, includes mental discernment, comprehension, clear knowledge. Professor March, in his valuable Thesaurus Dictionary, defines it as equivalent to "comprehension."

Counsel contend that "understanding" is equivalent to "agreement," except that it imports that it is oral. The court can not adopt this definition. In its opinion it means something more. It means an implied agreement, resulting from the expressed terms of the agreement, whether written or oral, or where the law from certain acts of the parties implies an agreement to do a certain act. A right to recover on a quantum meruit is based upon an understanding or implied agreement to pay for services rendered for one's benefit, although there is no express agreement to pay therefor.

Can there be any doubt that these clauses in the leases are understood by the lessees to mean that by using no other machines than those of the defendants they are relieved of certain royalties, otherwise exacted for the use of the defendants' machines? (See Exhibits 9, 10, 11, and 12.) And can there be any doubt but that, if the lessees use the defendants' lasting machines for shoes welted on machines made by other manufacturers, or fail to use exclusively defendants' machines for lasting shoes, or fail to purchase from the defendants exclusively all duplicate parts, extras, and devices of every kind, needed or used in operating, repairing, or renewing the lasting machinery, or fail to use exclusively the auxiliary machinery of the lessor in the manufacture or preparation of insoles licensed under letters patent No. 849,245, or fail to buy any additional machines needed in their shoe factory which can be leased from the lessor, that under the terms of the leases set out in the Exhibits 1, 3. 4, 5, and 6 all of the leases can be canceled and the lessees be deprived of the use of them and be compelled to pay certain royalties, which otherwise they would not have to pay? Exhibit 9 expressly authorizes the lessor to terminate all leases for these breaches, although the lessee is bound by them for 17 years from the date of the lease, whether the patents, if there be any, have expired or are still in force.

Can it be doubted that these provisions are not only within the spirit but the letter of the statute? What is the natural, direct, and necessary effect of these conditions? There can be but one answer to this: To compel the lessees to use defendants' machinery and material, regardless of whether the terms granted by the defendants are as favor[149]able as can be obtained from other manufacturers of some of the machines or dealers in some of the materials.

In addition, it is charged that by reason of these leases there is no market for any one inclined to manufacture these or some of these machines, and therefore all are deterred from engaging in their manufacture, as, there being no market for them, financial failure is bound to result from the attempt. Such a condition of affairs clearly tends to substantially lessen competition, and create, in favor of the defendants, a monopoly in that line of commerce.

In addition, it is charged in the bill that the New Jersey company acquired and still owns the capital stock of 56 other concerns, at one time engaged in the manufacture and selling and leasing of some form of shoe machinery or supplies. The bill alleges:

Thus the control of a complete line of "principal " and "auxiliary" machinery used in the bottoming of shoes became vested in one establishment. Before this no one company could supply such a line, nor can any company do so now outside the defendants.

The reason other manufacturers do not engage in making all the machines as the defendants do are not stated as specifically as they might be. Whether it is due to the fact that many of these machines, or some of them, are protected by letters patent, or what other reason there may be, might well be stated more explicitly, in order that the court may determine whether they are sufficient to sustain the conclusions of the pleader, who during the argument stated that some of these machines leased by the defendants are protected by letters patent and for that reason can not be made by others. The only_reference to patented machines is in Exhibit 5, and refers to the Goodyear insole machines. But under the present liberal practice, this is not sufficient to sustain a motion to dismiss, although it would be better pleading to set out more fully the reasons why other parties can not manufacture all these machines. The effect is shown by Exhibit 13.

[13] Is the complaint defective because it does not charge that the acts of the defendants were unduly and improperly exercised?

It is claimed that in view of the construction of the Sherman Act in the Standard Oil and Tobacco Cases (221 U. S. 1, 31 Sup. Ct. 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734, and 221 U. S. 106, 31 Sup. Ct. 632, 55 L. Ed. 663), it is not sufficient to charge acts which may result in creating a monopoly, unless further shown that the actions of the parties were "unduly and improperly exercised." There can be no doubt that upon well-established principles of law the courts presume that Congress, when legislating upon a subject included in previous statutes, uses the same language found in the previous statute and if it had prior to the enactment of the later act been construed by the courts, especially the Supreme Court, it intended to adopt that construction as a part of the new act. But is the language used in the Clayton Act, even if not identical, so similar to that used in the Sherman Act, construed in those cases, as to make that rule applicable? By referring to sections 1 and 2 of the Sherman Act (Comp. Stat. 1913, secs. 8820, 8821), it will be seen that Congress used merely generic words, without defining what spe[150]cific acts shall constitute restraint of trade or commerce, or a monopoly. The Chief Justice, in delivering the opinion of the court, said:

The merely generic enumeration which the statute makes of the acts to which it refers and the absence of any definition of "restraint of trade" as used in the statute leaves room for but one conclusion, which is that it was expressly designed not to unduly limit the application of the act by precise definitions, but while clearly fixing a standard; that is, by defining ulterior boundaries which could not be transgressed with impunity, to leave it to be determined by the light of reason, guided by the principles of law and the duty to apply and enforce the public policy embodied in the statute, in every given case, whether any particular act or contract was within the contemplation of the statute.

On the other hand, the act now under consideration, instead of using the generic words of the Sherman Act, in plain and unequivocable language states what acts shall be unlawful, if they "substantially lessen competition or tend to create a monopoly." This being the case,