Among the views entertained on the subject of competition, good authority holds that mere size is no sin against the law. "The merging of two or more business plants necessarily eliminates competition between the units thus combined. But this elimination is in contravention of the statute only when the combination is made for the purpose of ending this particular competition, in order to secure control of and enhance prices and create a monopoly.” *

On the other hand the court in which the International Harvester Company was adjudged guilty took the ground that the control of eighty-five per cent of the country's output of a given kind of implement was in itself a traderestraining status within the act.

Contracts in restraint of trade in the common law do not appear to have been applied to anything but personal service, trading, and ordinary business relations. When a man bound himself by contract not to labor at his trade "in the realm," that was restraint against public policy and hence forbidden. When a merchant sold his business to another, on condition that he would not re-enter in that place as a competitor for a term of years, that was held at common law as a "reasonable restraint of trade," and made binding.

Among the most ancient of business practices, interfering with freedom of trade in local mar* Ex-President Taft, N. Y. Sunday Times, 1914.

kets, are the threefold offenses of forestalling, regrading, and engrossing—all of which seek to limit or monopolize the supply and are condemned at common law as unreasonable and against the public interests.

No doubt the most paralyzing feature in the Trust Act was the shifting and uncertain interpretation given to the term "restraint of trade." In the prevailing opinion by Justice Peckham, as far back as the Trans-Missouri decision (1897), the term was taken to include all contracts. In the Northern Securities case Justice David A. Brewer, whose vote was the decisive one, said: "Congress did not intend to reach and destroy those minor contracts in partial restraint of trade which the long course of decisions at common law had affirmed were reasonable and ought to be upheld. The purpose rather was to place a statutory prohibition with prescribed penalties and remedies, upon those contracts which were in direct restraint of trade, unreasonable and against public policy."

In the foregoing statement of the case we no doubt have the transition step from the earlier, and more literal interpretation to the broader reading of the spirit of the Act, as it first found expression in the Standard Oil decision (1911). There the common law distinction between reasonable and unreasonable restraint was first brought out. It was for the court to decide, Chief Justice White explained, whether any par

ticular act fell within the class of prohibited things. And having classified the act complained of, it was also for it to decide "whether if the act is within these classes, its nature or effect causes it to be a restraint of trade."

If the restraint did not unreasonably abridge the freedom of trade or commerce and was not against public policy, then it was not contrary to the intendment of the statute. This is the "Rule of Reason."

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O FAR as the Federal statute books show there are now three main acts which deal with trusts and competition. These include (1) "An Act to protect trade and commerce against unlawful restraints and monopolies," known as the Sherman Anti-Trust Act of July 2, 1890; (2) "An Act to create a Federal Trade Commission," approved September 26, 1913; (3) "An Act to supplement existing laws against unlawful restraints and monopolies," which became a law October 15, 1914. To these should be added the Interstate Commerce Act whose antipooling clause makes it really an anti-trust measure. There are also sections of acts approved in 1894 and in 1913, expressly enumerated in the Federal Trade Commission Act of 1914 (Sec. 4) as "anti-trust acts."

But public policy is expressed not alone by laws on the subject. One must also look to the Federal Court decisions under these laws, to the special investigations of complaints of their violations, to the effects of decrees in dissolution cases and to the conditions which have brought about amendments to the laws in the light of experience.

1. The Sherman Anti-Trust Act

Party platforms with pronouncements against the trusts began to appear about 1885. Within the next five years the discussion became effective enough to record itself in the act of July 2, 1890. This Act is generally taken as giving statutory expression to what is regarded as the common law on the subject of interference with freedom of contracts and trade. In its essential features it covered two primary elements of business life-restraining contracts and monopolizing conduct in interstate and foreign trade.

(1) The Sherman Act declared illegal every commercial restraint under any of the three forms of (a) contract, (b) combination, trust or otherwise, or (c) conspiracy.

(2) It pronounced guilty of misdemeanor every person, corporation, or association "who shall monopolize or attempt to monopolize" any part of interstate or foreign commerce.

(3) It authorized the federal circuit courts (a) to make temporary restraining orders pending the hearings to prevent and restrain violation by parties complained of. (b) It declared that all property involved under such alleged illegal conditions "shall be forfeited to the United States and may be seized and condemned."

(4) It provided for recovery by the injured party of threefold damages and cost of suit.

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