water and the testator to it of the mocks of so many other ovgvatinis maat arapotal givna nae in and of it, in the absence of countercoming tin charentem Mymaj The Jesut, to the prima facie presumption of intent and pomfret, My Meanban the dotatancy over the oil industry, not as a result of normal trachoda od industøvd de zelopment, but by new means of combiration which were pese plad du in order that greater power might be added than would otherwise have weisen bark nommal methods been followed the whole with the purpose of excluding adheen from the trade and thus centralizing in the combination a perpetual control of this inner mentas of petroleum and its producte in the channels of interstate commerce. Og Breaner the prima facie presumption of intent to restrain trade, to monopolize wood to laring about monopolization resulting from the act of expanding the stock of the The 4 Jersey Corporation and vesting it with much vast control of the oil industry, is modic com losive 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. With reference to the decree of the court below, the opinion contained the following statement (pp. 79–80):

So far as the decree held that the ownership of the stock of the New Jersey corporation constituted a combination in violation of the first section and an attempt to create a monopoly or to monopolize under the second section and commanded the dissolution of the combination, the decree was clearly appropriate. And this also is true of section 5 of the decree which restrained both the New Jersey corporation and the subsidiary corporations from doing anything which would recognize or give effect to further ownership in the New Jersey corporation of the stocks which were ordered to be retransferred.

Section 16. Agreements to fix prices.

The most direct attempt at price enhancement has been by means of agreements to fix prices. Such agreements have been held to be illegal, as being in restraint of trade, and as attempts to monopolize, in so far as they relate to interstate commerce. These have existed among railroads as well as among manufacturing and trading concerns. They may be either sellers' or buyers' agreements-usually the former, though occasionally, as in the case of the beef packers (see p. 106), buyers have combined to depress purchase prices. The earliest instance of an agreement to fix prices held illegal by the Supreme Court under the Sherman Law was an agreement to fix the prices of railroad transportation.

UNITED STATES v. TRANS-MISSOURI FREIGHT ASSOCIATION (166) U. S., 290), SUPREME COURT, 1897.-The facts in the case have already been stated. (See p. 84.) For the present purpose it is sufficient to recall that an association of railway companies had made an agreement to fix the rates of transportation in an area comprising several States, under which members failing to maintain such rates were subject to fine. In the suit in equity brought by the Government it was sought to dissolve the association and enjoin the parties thereto from further action under the combination. The defendants claimed that the rates so fixed were reasonable. The court held, as already noted in the previous statement of the case, that the question of reasonableness did not enter. The court said (pp. 339, 341):

The claim that the company has the right to charge reasonable rates, and that, therefore, it has the right to enter into a combination with competing roads to maintain such rates, can not be admitted. The conclusion does not follow from an admission of the premise. What one company may do in the way of charging reasonable rates is radically different from entering into an agreement with other and competing

roads to keep up the rates to that point. If there be any competition the extent of the charge for the service will be seriously affected by that fact. * * * competition is allowed no play; it is shut out, and the rate is practically fixed by the companies themselves by virtue of the agreement, so long as they abide by it.

*

The question is one of law in regard to the meaning and effect of the agreement itself, namely: Does the agreement restrain trade or commerce in any way so as to be a violation of the act? We have no doubt that it does. The agreement on its face recites that it is entered into "for the purpose of mutual protection by establishing and maintaining reasonable rates, rules and regulations on all freight traffic, both through and local." To that end the association is formed and a body created which is to adopt rates which, when agreed to, are to be the governing rates for all the companies, and a violation of which subjects the defaulting company to the payment of a penalty, and although the parties have a right to withdraw from the agreement on giving thirty days' notice of a desire so to do, yet while in force and assuming it to be lived up to, there can be no doubt that its direct, immediate and necessary effect is to put a restraint upon trade or commerce as described in the act.

UNITED STATES v. JELLICO MOUNTAIN COAL & COKE Co. ET AL. (46 FED., 432), CIRCUIT COURT, 1891.-This case was a suit in equity against the members of the "Nashville Coal Exchange," which was composed of coal-mining companies in Kentucky and Tennessee and coal dealers in Nashville, a combination formed "to establish prices on coal at Nashville, Tenn., and to change same from time to time, as occasion may require." The combination agreement provided a penalty for selling below the prices so fixed. The court held that this combination was in restraint of interstate commerce, and constituted also an attempt to monopolize the coal business between the State of Kentucky and Nashville, Tenn., basing its decision on the agreements to fix prices and not to deal with nonmembers, as the elements constituting restraint.

The court said (p. 436):

These provisions, so far as this combination could do so, fixed the lowest price of coal to consumers in and near Nashville at 13 cents per bushel, and prevented coal being sold there at a cheaper rate, no matter how much less it might cost in an open and unobstructed market. Nor is this all. The exchange ordains that "owners or operators of mines shall not sell or ship coal to any firm, person, or corporation in Nashville or West Nashville or East Nashville who are not members of this exchange, and dealers shall not buy coal from any one who is not a member of the exchange." The coal trade is confined, so far as the market supply is concerned, to transactions between the miner and dealer, the prices are fixed by them, and the miner and dealer only are eligible to membership. The miners of the concern can not sell to any dealer in or near Nashville who is not a party to the agreement, nor can such dealer purchase coal of any miner anywhere who is not a member of the body. The operations of both are confined within the membership. So far as Nashville is concerned, they can not go to cheaper or more favorable markets, or deal with those who would give more favorable terms. The restraint is positive and undeniable.

UNITED STATES v. SWIFT & Co. (196 U. S., 375), SUPREME COURT, 1905. This was a suit in equity by the Government for an injunction against Swift & Co. and other packing companies controlling about 60 per cent of the trade in fresh meat in the United States. The

Government charged a combination of a dominant portion of the dealers in fresh meat throughout the United States not to bid against each other in the live-stock markets of the different States; to bid up prices for a few days in order to induce the cattlemen to send their stock to the stockyards; to fix prices at which they sell, and to that end to restrict shipments of meat when necessary; to establish a uniform rule of credit to dealers, and to keep a blacklist; to make uniform and improper charges for cartage; to get less than lawful rates from railroads to the exclusion of competitors; and to conspire with one another and with the railroads, and with others, to monopolize the supply and distribution of fresh meat throughout the United States. A demurrer to the declaration was overruled, the court holding that such a combination is within the prohibitions of the Sherman Act. In granting the preliminary injunction sought by the Government, the circuit court said (122 Fed., 534):

Whatever combination has the direct and necessary effect of restricting competition, is, within the meaning of the Sherman act as now interpreted, restraint of trade. Thus defined, there can be no doubt that the agreement of the defendants to refrain from bidding against each other in the purchase of cattle, is combination in restraint of trade; so also their agreement to bid up prices to stimulate shipments, intending to cease from bidding when the shipments have arrived. The same result follows when we turn to the combination of defendants to fix prices upon, and restrict the quantities of meat shipped to their agents or their customers. Such agreements can be nothing less than restriction upon competition, and, therefore, combination in restraint of trade; and thus viewed, the petition, as an entirety, makes out a case under the Sherman act.

The Supreme Court affirmed the opinion of the lower court, basing its opinion on all the facts taken together, of which price fixing was an important element, and said in part (pp. 396 and 400):

The scheme as a whole seems to us to be within reach of the law. The constituent elements, as we have stated them, are enough to give to the scheme a body and, for all that we can say, to accomplish it. Moreover, whatever we may think of them separately when we take them up as distinct charges, they are alleged sufficiently as elements of the scheme. It is suggested that the several acts charged are lawful and that intent can make no difference. But they are bound together as the parts of a single plan. The plan may make the parts unlawful.

* * *

Under the act it is the duty of the court, when applied to, to stop the conduct. The thing done and intended to be done is perfectly definite: with the purpose mentioned, directing the defendants' agents and inducing each other to refrain from competition in bids. The defendants can not be ordered to compete, but they properly can be forbidden to give directions or to make agreements not to compete. See Addyston Pipe & Steel Co. v. United States, 175 U. S., 211. The injunction follows the charge.

Section 17. Agreements to limit output.

Agreements to limit output have sought to accomplish as effectively the same end-higher prices-as the more direct methods of price fixing. To curtail production has been one of the objects of many association agreements.

can not be disputed that agricultural products and live stock in Illinois constitute a very large part of the wealth and property of that State.

We conclude this part of the discussion by saying that to declare that some of the class engaged in domestic trade or commerce shall be deemed criminals if they violate the regulations prescribed by the State for the purpose of protecting the public against illegal combinations formed to destroy competition and to control prices, and that others of the same class shall not be bound to regard those regulations, but may combine their capital, skill or acts to destroy competition and to control prices for their special benefit, is so manifestly a denial of the equal protection of the laws that further or extended argument to establish that position would seem to be unnecessary. We therefore hold that the act of 1893 is repugnant to the Constitution of the United States, unless its ninth section can be eliminated, leaving the rest of the act in operation.

The Federal antitrust laws have been modified with respect to combinations among farmers, etc., by certain provisions of the Clayton Act which is described below. (See p. 138.)

Section 13. Forms of combination in restraint of trade.

The Sherman Law in section 1 prohibits "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade" in interstate commerce, etc. Thus, all kinds of contracts, combinations, and conspiracies are forbidden, if in restraint of interstate commerce. Leaving the question of interstate commerce aside, it is important to consider what are the chief devices, whether by contract, combination, or conspiracy, that have been practiced and held illegal under this law. Among the more important of these may be distinguished the following: (a) Agreements under written or oral contracts to fix prices, to restrict production, to divide markets, etc.; (b) consolidation of competing interests through "trusts," holding companies, or by complete merger of ownership. The latter class may be considered first. The "trust" form of combination was obsolescent at the time the act under consideration was passed, and there are no cases which need be considered under that head. The two other types of combination, however, are very important, namely, holding companies and mergers.

It should be very carefully noted that in respect to many of the agreements or practices herein set forth that the courts do not purport to have passed on them as isolated features.

Section 14. Mergers.

The most complete form of combination which has been held to be within the purview of the Sherman Act is the merger; that is, a combination which consolidates directly in a single ownership all or a large part of the property and business of the various competing interests comprehended in the combination. No case has yet been. decided by the Supreme Court concerning a combination which was a