erection of buildings or for manufacture of goods, often provide that union labor only shall be employed, though neither party is a member of the union, but merely desires to avoid boycotts and other troubles. The Alabama court properly held on demurrer to a complaint on such a contract that it could not take judicial notice of the nature of a union, and that perhaps union men were desired because they were more efficient, but if evidence were introduced showing that a union was a combination in unreasonable restraint of trade and that the provision regarding union labor in the contract was due to the success of the purposes of the combination, and that enforcement of the provision involved a furtherance of those purposes, it seems that the provision should be held invalid.95 In the absence, however, of evidence of by-laws or practices contemplating tortious means by which a labor union was seeking to attain its ends, it is unlikely that this view would be taken, if the union was organized for the ordinary objects of a labor union. An agreement by an employer with a union to give all his work to members of the union has been held a valid agreement; 96 at least unless the agreement involved a monopolizing of all employment of the kind in the community.97 The inquiry might also sometimes be pertinent whether the employer had entered into the contract under duress.98 On the other hand, an employer may lawfully make it a term of his contract with his employees that they shall not join a union while the employment continues and such a provision will be enforced.99 "Birmingham Paint, etc., Co. v. Crampton (Ala.), 39 So. 1020. 95 In Adams v. Brenan, 177 Ill. 194, 52 N. E. 314, 42 L. R. A. 718, 69 Am. St. Rep. 222, it was held that a school board has no authority to insert such a provision in a building contract, and that for this reason the provision was invalid. In Holden v. Alton, 179 Ill. 318, 53 N. E. 556; Fiske v. People, 188 Ill. 206, 58 N. E. 985, 52 L. R. A. 291, it was held that an ordinance requiring the insertion of such a provision in contracts for public works was invalid and unconstitutional. 96 Smith v. Bowen, 232 Mass. 106, 121 N. E. 814; Shinsky v. O'Neil, 232 Mass. 99, 121 N. E. 790; Jacobs v. Cohen, 183 N. Y. 207, 76 N. E. 5, 2 L. R. A. (N. S.) 292, 111 Am. St. Rep. 730; Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229, 271, 62 L. Ed. 260, 38 S. Ct. Rep. 65, Ann. Cas. 1918 B. 461. 97 See supra, § 1655, n. 86. 98 See Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229, 250, 62 L. Ed. 260, 38 S. Ct. Rep. 65 Ann. Cas. 1918 B. 461. 99 In Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229, 62 L. Ed. 260, § 1657. Anti-Trust Acts; Sherman Act. The prohibitions of the common law against contracts in restraint of trade have in most jurisdictions been reinforced by statutes, which are generally aimed not only at contracts, but at all combinations by which monopoly is sought or obtained. Particular examination of these statutes is impossible; but something must be said of the Sherman Act, both because of its intrinsic importance and because of the effect of the decisions under it on the conception of illegal restraint of trade at common law. This Act makes criminal every contract, combination or conspiracy, in restraint of interstate or foreign commerce, and monopolizing or attempting to monopolize any part of such trade; and gives to any person injured in his business by anything forbidden by the statute a right to recover treble damages and costs.2 38 S. Ct. Rep. 65, Ann. Cas. 1918 B. 461, the court upheld an injunction restraining the leaders of a union from trying to "organize" the plaintiff's employees who had made such an agreement. 1 They are summarized in "Trust Laws and Unfair Competition." U. S. Government Printing Office (1916). 2 Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court. Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court. Section 3 applies the prohibitions of the first section to commerce within the Territories or the District of Columbia or to commerce between such jurisdictions or between them and the States and foreign nations. Sections 4 and 5 give the Federal circuit courts jurisdiction (now transferred to the United States District Courts) to enforce the law and provide that proceedings in equity may be brought by the United States Government to prevent and restrain violations thereof. The courts may make other persons parties to the proceedings. Section 6 authorizes the seizure and condemnation of property in the course of transportation in interstate commerce or to a foreign country belonging to combinations, etc., prohibited in the first section. § 1658. Construction of the Sherman Act. 5 The statute being in terms limited to restraint of interstate or foreign trade or commerce, was at first held not to cover a combination of manufacturers; 3 but this holding was later disregarded, and if a combination of manufacturers is engaged in selling goods in interstate or foreign commerce it is affected by the prohibition of the statute. No liability exists for acts done in foreign territory and there lawful under local law, though done pursuant to a conspiracy formed in the United States. Furthermore though an agreement or combination tends to produce a monopoly, it is not obxnoious to the statute unless it relates to something which is the object of trade or commerce. Therefore, a monopoly to control the business of baseball playing, or to control the business of selling trading stamps, is not within the terms of the Act. The principal controversy has been as to the meaning of "restraint of trade" as used in the Act. It was at first held that these words included every restraint whether reasonable or not; but a construction · 6 Section 7 gives the right to treble damages stated in the text. Section 8 defines person as including corporation. United States v. E. C. Knight Co., 156 U. S. 1, 39 L. Ed. 325, 15 S. Ct. 249. 4 Montague v. Lowry, 193 U. S. 38, 48 L. Ed. 608, 24 S. Ct. 307; Standard Oil Co. v. United States, 221 U. S. 1, 68, 69, 55 L. Ed. 619, 31 S. Ct. 502, Ann. Cas. 1912 D. 734; United States 1. American Tobacco Co., 221 U. S. 106, 55 L. Ed. 663, 31 S. Ct. 632. American Banana Co. v. United Fruit Co., 213 U. S. 347, 53 L. Ed. 826, 29 S. Ct. 511. For other decisions on the extent to which foreign commerce is covered by the statute, see United States v. Pacific, etc., Navigation Co., 228 U. S. 87, 57 L. Ed. 742, 33 S. Ct. 443; United States v. HamburgAmerikanische Packet-Fahrt-ActienGesellschaft, 200 Fed. 806; United States v. Prince Line, 220 Fed. 230. * American League Baseball Club 8 of Chicago v. Chase, 86 N. Y. Misc. 441, 149 N. Y. S. 6. 7 Sperry Hutchinson Co. v. Fenster, 219 Fed. 755. 8 United States v. Trans-Missouri Freight Assoc., 166 U. S. 290, 41 L. Ed. 1007, 17 S. Ct. 540, four justices dissented. In United States v. Joint Traffic Assoc., 171 U. S. 505, 43 L. Ed. 259, 19 S. Ct. 25, the sweeping language of the earlier case was somewhat modified, the court saying: "In Hopkins v. United States, decided at this term, post, 578, we say that the statute applies only to those contracts whose direct and immediate effect is a restraint upon interstate commerce, and that to treat the act as condemning all agreements under which, as a result, the cost of conducting an interstate commercial business may be increased, would enlarge the application of the act far beyond the fair meaning of the language used. The effect upon interstate commerce must not be indirect or incidental only. An agreement which, if actually applied, would have made it a criminal offence to sell the business and good will of any corporation, firm or person engaged in interstate commerce, could not well be persisted in; and in later decisions the court has adopted the test of the common law-that of reasonableness. It may now entered into for the purpose of promoting the legitimate business of an individual or corporation, with no purpose to thereby affect or restrain interstate commerce, and which does not directly restrain such commerce, is not, as we think, covered by the act, although the agreement may indirectly and remotely affect that commerce. We also repeat what is said in the case above cited, that 'the act of Congress must have a reasonable construction, or else there would scarcely be an agreement or contract among business men that could not be said to have, indirectly or remotely, some bearing upon interstate commerce, and possibly to restrain it.' To suppose, as is assumed by counsel, that the effect of the decision in the Trans-Missouri case is to render illegal most business contracts or combinations, however indispensable and necessary they may be, because, as they assert, they all restrain trade in some remote and indirect degree, is to make a most violent assumption and one not called for or justified by the decision memtioned, or by any other decision of this court." Standard Oil Co. v. United States, 221 U. S. 1, 55 L. Ed. 619, 31 S. Ct. 502, Ann. Cas. 1912 D. 734; United States v. American Tobacco Co., 221 U. S. 106, 55 L. Ed. 663, 31 S. Ct. 632. In the latter case the court said (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." Mr. Justice Harlan, though concurring in the decision of the two cases, dissented from the test adopted by other members of the court and adhered to the view that any restraint be said that so far as contracts in restraint of trade are concerned the test of legality at common law and under the Sherman Act is the same, though the statute makes criminal executed transactions, and combinations which the common law might have found no way to attack. Not only contracts and combinations of ordinary traders and manufacturers are within the scope of the Act, but those of railroads, 10 farmers,11 and laborers; 12 but the application of the statute to farmers and laborers has been nullified by the Clayton Act. 13 It is immateial so far as the inhibitions of the Sherman Act are concerned what form a combination in unreasonable restraint of trade whether reasonable or not was within the prohibition of the statute. 10 United States v. Trans-Missouri Freight Assoc., 166 U. S. 290, 41 L. Ed. 1007, 17 S. Ct. 540; United States v. Joint Traffic Assoc., 171 U. S. 505, 43 L. Ed. 259, 19 S. Ct. 25; Northern Securities Co. v. United States, 193 U. S. 197, 48 L. Ed. 679, 24 S. Ct. 436; United States v. Union Pacific R. Co., 226 U. S. 470, 57 L. Ed. 306, 33 S. Ct. 162; Darius Cole Transp. Co. v. White Star Line, 186 Fed. 63, 108 C. C. A. 165. 11 Steers v. United States, 192 Fed. 1, 112 C. C. A. 423. See also Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 46 L. Ed. 679, 22 S. Ct. 441. 12 Loewe v. Lawlor (Danbury Hatters' Case), 208 U. S. 274, 52 L. Ed. 488, 28 S. Ct. 301, 235 U. S. 522, 59 L. Ed. 341, 35 S. Ct. 170; United States v. Workingmen's Amalgamated Council, 54 Fed. 994. 13 Sec. 6. That the labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from law fully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws. Section 20 provides, in substance, that in any case between an employer and employees, etc., relating to or growing out of a dispute as to the terms of employment, the United States courts shall not issue injunctions unless necessary to prevent irreparable injury to the property rights of the applicant. This section provides further that an injunction shall not prohibit any person or persons, whether singly or in concert, from ceasing to work or persuading others to do so by peaceful means, or from attending at any place where he may lawfully be in order peacefully to communicate information or to persuade any person to abstain from working, or from ceasing to patronize or employ any party to such dispute, or persuading others thereto by peaceful and lawful means, or from paying or withholding strike benefits, or from peaceably assembling in a lawful manner and for lawful purposes. Finally, it is declared that the acts specified in this paragraph shall not be held to be violations of any law of the United States. |