of any hydraulic or hydroelectric power derived therefrom or in any manner or in any degree in restraint of trade in the generation, sale, or distribution of hydraulic or hydroelectric power derived therefrom, the State may take possession as in cases of receivership, and the members of the Railroad Commission shall act as receivers during such period as the court may determine.1

In Washington, corporations not formed for profit are prohibited from entering into any agreement or combination in restraint of trade or which shall attempt to restrain trade."

Section 4. Restraint of competition.

Restraint of competition as distinguished from restraint of trade is prohibited in. 27 States.

CONSTITUTIONAL PROVISIONS.-The constitution of Alabama (sec. 103) requires, in substance, that the legislature provide for the regulation, prohibition, or reasonable restraint of common carriers, partnerships, associations, trusts, monopolies, and combinations of capital, that they may not prevent reasonable competition in any calling, trade, or business.

The constitution of Georgia (Art. IV, sec. 2) provides that the general assembly shall have no power to authorize any corporation to buy shares or stock in any other corporation, or to make any contract or agreement whatever with any such corporation, which may have the effect, or be intended to have the effect, to defeat or lessen competition in their respective businesses.

The constitution of Wyoming (Art. X, sec. 8) prohibits the consolidation or combination of corporations to prevent competition.

The constitution of New Hampshire (art. 82) declares that “free and fair competition in the trades and industries is an inherent and essential right of the people and should be protected against all monopolies and conspiracies which tend to hinder or destroy it," and grants to the general court the power to enact laws "to prevent the operations within the State of all persons and associations, and all trusts and corporations, foreign or domestic, and the officers thereof, who endeavor to raise the price of any article of commerce or to destroy free and fair competition in the trades and industries through combination, conspiracy, monopoly, or any other unfair means."

STATUTORY PROHIBITIONS.-Kansas, South Carolina, and Tennessee prohibit all arrangements made with a view to lessen, or which tend to lessen, full and free competition in the importation or sale of articles imported into the State, or in the manufacture or sale of articles of domestic growth or of domestic raw material. Kansas in

1 Wisconsin Stats., 1913, sec. 1596-72.

* Washington, Remington & Ballinger's Code (1910), sec. 3762.

cludes also competition in transportation of articles and for the loan or use of money.1

Missouri has a substantially similar provision, including competition in transportation, in fire and storm insurance, and in the manufacture or sale in the State of anything bought and sold."

California prohibits combinations of capital, skill, or acts (1) to prevent competition in manufacturing, making, transportation, sale or purchase of merchandise, produce, or any commodity; or (2) to make any agreement by which they shall establish or settle the price of any article, commodity, or transportation between them or themselves and others, so as to preclude a free and unrestricted competition among themselves, or any purchasers or consumers in the sale or transportation of any such article or commodity.3

Twelve States (Arizona, Kansas, Colorado, Louisiana, Michigan, Mississippi, New Jersey, North Dakota, Ohio, South Dakota, Nebraska, and Texas) have substantially similar laws.

Arizona and Kansas extend clause 1 so as to include competition in "aids to commerce." Clause 2 is likewise extended to include competition in "manufacture" as well as sale or transportation.*

1 Kansas, Laws 1889, chap. 257, sec. 1; South Carolina, Civil Code (1912), sec. 2437; Tennessee, Laws 1903, chap. 140, sec. 1.

Walter A. Wood Mowing & Reaping Co. v. Greenwood Hdw. Co., 55 S. E., 973 (S. C., 1906).—Plaintiff agreed to manufacture and sell to defendant certain farın machinery and to use reasonable diligence to prevent other agents from making sales of such machinery in Greenwood, S. C., and vicinity, and defendant agreed to canvass the territory thoroughly, not to accept the agency for or sell any other machines during the term of the contract, and to sell the machines for use only in said territory. Held, that the contract was not injurious to the public as tending to create a monopoly, nor a violation of the South Carolina Civil Code, 1902, section 2×45 (same as Civil Code (1912,) sec. 2437), since competition and prices were not affected to an unreasonable extent. It was further held that the contract was valid under the common law. Standard Oil Co. v. State (Tenn.), 100 S. W., 705 (1907).—An agent of the Standard Oil Co. gave a merchant 100 gallons of oil to countermand an order to a competitor. Held a violation of act of 1903. Corporation not indictable under statute, but may be counted as party to conspiracy and is subject to loss of right to do business in the State. Judgment against corporation reversed and agent fined.

Standard Oil Co. of Kentucky v. Tennessee, 217 U. S., 413 (1910). —The plaintiff in error sought to reverse a decree of the Supreme Court of Tennessee forbidding it to do business, other than interstate commerce, in that State. The ground of the decree was that the corporation and certain named agents entered into an ågreement for the purpose and with the effect of lessening competition in the sale of oil at Gallatin, and with the further result of advancing the price of oil there. The transaction complained of was inducing merchants in Gallatin to revoke orders to a rival company for oil to be shipped from Pennsylvania, by an agreement to give them 300 gallons of oil. The decree was affirmed.

Baird v. Smith, 128 Tenn., 410 (1913).—Defendant sold to plaintiff the stock and fixtures of a store in Jellico, Tenn., and as part of the contract of sale bound himself to pay the plaintiff $1,000 should he (defendant) within five years enter any competing business in Jellico, other than that with which he was then connected. On suit being brought for breach of the agreement, the defendant urged that the contract was void as tending to lessen full and free competition in the sale of merchandise, within the meaning of chapter 140, Acts of 1903. Held, that the contract was not a violation of this act.

1 Missouri, R. S., chap. 98, sec. 10301, as amended in 1913.

California, Laws 1907, chap. 530, sec. 1.

4 Arizona, Laws 1912, chap. 73, sec. 1; Kansas, Laws 1897, chap. 265, sec. 1.

State v. Smiley, 65 Kans., 240 (1992).—Proceeding under Kansas law of 1997. Defendant made an agreement with other grain dealers whereby the amount of grain to be bought by each party was limited. If any party purchased more than his allotted share, he agreed to pay to the others 3 cents a bushel for such excess. The contract was held to be in restraint of competition, and therefore illegal. Held, further, that the law did not violate fourteenth amendment of United States Constitution. On appeal the constitutionality of the law under the Federal Constitution was aflirmed by United States Supreme Court (196 U. S., 447). State v. International Harvester Co. of America, 106 Pac., 1053 (Kans., 1910). --Action by attorney general under acts of 1889, 1897, and 1890, to forfeit rights, privileges, etc., within the State. It was found that the company formerly used exclusive contracts but had ceased making them; that since then defendant tried by argument, persuasion, and in a few instances by threats, to prevent dealers from handling competitive goods. Ordered that defendant be prohibited from using exclusive contracts with its agents or dealers restraining them from handling competitive goods, and from making any unfair discrimination in the sale of its goods, against any section or between persons for the purposes of destroying competition.

Colorado, like Arizona, has extended clauses (1) and (2), and in addition has included "ores" in clause (1).1

The Louisiana law is substantially similar to that of California, except that the words "capital, skill, or acts" are omitted."

The law of Mississippi varies from that of California in that it omits the words "capital, skill or acts," and clause (1) refers to "hindering competition" in the "production, importation," manufacture, transportation, sale, or purchase of a commodity. Clause (2) is omitted.3 Mississippi provides that this chapter shall be liberally construed to the end that trusts and combines may be suppressed and the benefits arising from competition in business preserved to the people of this State.1

The New Jersey act resembles the California law in that clause (1) is substantially the same. Clause (2), however, is as follows:

To make any agreement by which they directly or indirectly preclude a free and unrestricted competition among themselves, or any purchasers or consumers, in the sale or transportation of any article or commodity, either by pooling, withholding from the market or selling at a fixed price, or in any other manner by which the price might be affected.3

North Dakota omits clause (1). Clause (2) is substantially the same."

The law of South Dakota varies from that of California in that it omits the word "acts" after "skill," and omits clause (2). It prohibits, however, persons, corporations, etc., from fixing prices, limiting production, or regulating the transportation of any produce or commodity so as to "obstruct" or prevent competition."

In Nebraska clause (1) includes "constructing" as well as manufacturing, making, etc. In Nebraska and Texas clauses (1) and (2) are extended to include the business of "insurance," and the law of Texas also includes aids to commerce and the preparation of products for market or transportation.

The laws of Michigan and Ohio are substantially the same as in California, but Michigan substitutes the word "arts" for "acts."

Colorado, Laws 1913, chup. 161, sec. 1.

Louisiana, Laws 1892, act 90, sec. 1.

* Mississippi, Code 1906, sec. 5002, as amended by Laws 1908, chap. 119, sec. 1.

Idem, chap. 5021.

New Jersey, Laws 1913, chap. 13, sec.1; see also, New Jersey, Laws 1913, chap. 18, as amended by Laws 1915, chap. 114, noted under "Holding companies," p. 200.

North Dakota, Laws 1907, chap. 259, sec. 2.

1 South Dakota, Laws 1909, chap. 224, secs. 1–5.

Nebraska, Stats., sec. 6281; Texas, Laws 1903, Chap. XCIV, sec. 1.

Ohio, G. C., sec. 6391; Michigan, P. A. 1899, No. 255, sec. 1.

McCall Co. v. O' Neil, 17 Ohio N. P. ( N. S.), 17 ( Nov. 12, 1914).-Plaintiff entered into a contract with the Davis Pennell Co. under which the latter was to take and sell for a certain period plaintifl's patterns, etc. It was further agreed that the Davis Pennell Co. would not sell the patterns at retail for less than catalogue price. The rights and interests of the Davis Pennell Co. in the contract were taken over by the defendant. On breach of the contract, plaintiffs sued to recover certain amounts alleged to be due. Held, that plaintiff could not recover, as the contract was void under section 6391 of the General Code. The court further expressed the opinion that the rule would be the same even if the goods so sold were covered by patent.

30035-16-11

While the above are the most usual types of statutes directed at restraint of competition, other laws have been adopted in various States, in some cases in addition to provisions above noted.

Alabama prohibits any person or corporation from destroying or attempting to destroy competition in the manufacture or sale of a commodity.1

Georgia prohibits insurance companies or their agents from making arrangements to prevent or lessen competition in the business of insurance transacted in that State.2

Michigan prohibits foreign insurance companies from directly or indirectly entering into any contract, undertaking, etc., the object or effect of which is to prevent open and free competition.3

Indiana prohibits contracts, combinations, etc., to prevent competition in manufacturing, within or without the State, and contracts, combinations, etc., to stifle or restrict free competition for the letting of any contract for private or public work. This State also prohibits all arrangements, etc., between persons or corporations who control the output of any article of merchandise, made with a view to lessen, or which tend to lessen, full and free competition in the importation or sale of articles imported into the State."

Iowa prohibits any person, corporation, etc., operating any business of buying, selling, handling, consigning, or transporting any commodity or article of commerce from forming, maintaining, or contributing to any pool, association, etc., for the prevention of full and free competition among buyers, sellers, or dealers in any commodity or any article of commerce.7

Massachusetts prohibits arrangements, combinations, etc., in violation of the common law in that thereby competition in that State in the supply or price of any article or commodity in common use is or may be restrained or prevented.8

Michigan prohibits contracts, understandings, etc., to restrict, limit, regulate, or destroy free and unlimited competition in the sale of any article of machinery, tools, implements, vehicles, or appliances designed to be used in any branch of productive industry.

Minnesota prohibits combinations, understandings, etc., which prevent or limit competition in the purchase and sale of any article of trade, manufacture, or use, or which tend or are designed so to do.10

1 Alabama, Code, sec. 7581.

* Georgia, Code, sec. 2466.

Michigan, Howell's Stats. (1913), secs. 8233, 8234.

Indiana, Laws 1907, chap. 243, sec. 1.

Ibid, sec. 3. See also Laws of Mississippi and Oklahoma under “Pooling," pp. 166, 168.

• Indiana, Stats., sec. 3878.

7 Iowa, Laws 1909, chap. 225, sec. 1.

Massachusetts, Laws 1908, chap. 454, sec. 1.

• Michigan, P. A. 1905, No. 223, sec. 1.

10 Minnesota, Stats. (1913), sec. 8973.

Missouri prohibits agreements, combinations, etc., in restraint of trade or competition in the importation, transportation, manufacture, purchase, or sale of any product or commodity in the State, or any article or thing bought or sold.1

Missouri and South Carolina prohibit agreements, pools, combinations, etc., to control or limit the trade in any article or thing or to limit competition in such trade by refusing to buy from or sell to any other person, etc., for the reason that such person is not a member of such pool, etc.2

Montana prohibits combinations, contracts, etc., "to prevent competition in merchandise or commodities," or by which the parties settle the price of any article of merchandise, commerce, or products so as to preclude unrestricted competition.3

A Nebraska statute in substance prohibits persons, etc., dealing in, handling, or consigning grain, from forming, maintaining, or contributing to any pool, combination, etc., to prevent competition among buyers, sellers, or dealers in grain, or which hinders or prevents the fullest competition in the purchase, sale, or dealing in grain by persons, etc., not members of, or doing business through, such combinations, or to prevent competition by requiring members not to deal with shippers or dealers in grain not members of such pool, combination, etc.4

New York prohibits corporations combining with any other corporation or person for the prevention of competition in any necessary of life. This State also prohibits agreements, combinations, etc., whereby competition in the State in the supply or price of any article or commodity of common use is or may be restrained or prevented.o

North Carolina in substance prohibits any person, corporation, etc., engaged in buying or selling in the State from having any agreement or understanding with any other person, etc., not to buy or sell within certain territorial limits within the State, with the intention of preventing competition in selling or to fix prices or prevent competition in buying within these limits. Agents are permitted to represent more than one principal, but two or more persons are not author

1 Missouri, R. S., chap. 98, sec. 10298, as amended in 1913.

* Idem, sec. 10300, as amended in 1913; South Carolina, Laws 1902, No. 574, sec. 5.

* Montana, Laws 1909, chap. 97, sec. 1.

4 Nebraska, Laws 1897, chap. 80, sec. 1.

New York, S. C. L., sec. 14.

New York, Cons. Laws, Gen. Business Law, sec. 340.

Brooklyn Distilling Co. v. Standard Distilling & Distributing Co., 120 N. Y. App. Div., 237 (1907).— Plaintiff leased distillery to defendant company, and in defense of a suit to recover rent it was alleged that the lease was illegal and void, as it was made in violation of Laws 1897, chapter 383 (now Gen. Business Laws, sec. 340). From a judgment for plaintiff defendant appealed. Held, that the corporation could not escape liability for rent when there was no evidence that the landlord was a party to the combination. The statute does not prevent one from selling or leasing property, nor does it prevent one from buying or leasing property to prevent competition. It is designed to prevent the owners or controllers of property entering into a combination to regulate production and maintain prices for their mutual benefit according to their respective interests.