proved to the governor that a the patent is not being worked in New Zealand, or the reasonable requirements of the public with respect to the invention can not be supplied, or (c) any person is prevented from working or using to the best advantage an invention of which Le is possessed. The governor may order the patentee to grant licenses on such terms as he deems just under the circumstances.

Section 6. Union of South Africa.

An act of the Legislature of the Cape of Good Hope of 1907 with respect to the meat trade and an act of the Union of South Africa of 1911, relating to the post office are of interest in this connection.

THE MEAT-TRADE ACT, 1907.—The Meat-Trade Act of 1907 provides for the payment of a license fee by butchers, which is lower for those who sell meat from stock raised in South Africa than for others. It also makes the following provisions concerning restraint of trade which, however, shall become operative in the particular divisions of the colony only after proclamation by the governor:

Every act, contract, combination or conspiracy in unreasonable restraint of the trade of a butcher is hereby declared to be illegal, and every person who shall commit any such act or make any such contract or engage in such combination or conspiracy shall be guilty of a criminal offence, and subject on conviction to a penalty not exceeding £500, and in default of payment thereof to imprisonment with or without hard labour for a period not exceeding twelve months.

It is expressly provided, however, that the establishment of bona fide partnerships to carry on the business more economically, or contracts made in connection with bona fide sales to enhance the value of the property sold, shall not be regarded as illegal. It is further provided that

All contracts and undertakings in support of any combination the object of which is to secure the control of the sale of meat, so as to enable such combination to arbitrarily control or regulate the price thereof, shall be held to be illegal and void.

The use of threats or intimidation to compel a butcher to sell at other prices than those he was selling at when such threats or intimidation was used is also made a criminal offense.

A license issued to a butcher who has been convicted of violating the criminal prohibitions shall be canceled and not reissued within two years after conviction.

THE POST OFFICE ADMINISTRATION AND SHIPPING COMBINATIONS DISCOURAGEMENT ACT, 1911.-The governor general is forbidden by the Post Office Administration and Shipping Combinations Discouragement Act of 1911 to make ocean-mail contracts with any person who

(1) is connected directly or indirectly with any such shipping or other combination as the Governor-General may deem detrimental to, or likely to affect adversely, South

African trade or industries; or (2) gives, offers, or promises to any person any rebate, refund, discount, or reward upon condition that such person shall ship, or in consideration of such person having shipped, goods by vessels of particular lines to the exclusion of any others.

Section 7. British India.

The Indian Contract Act of 1872 contains two sections which have been judicially interpreted with respect to restraint of trade.

Section 23 describes certain conditions under which a contract may be unlawful as follows:

SEC. 23. The consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.

In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.

1

The relation of public policy to contracts involving monopoly were adjudicated in a case 1 where the defendant, a municipal council, had granted to the plaintiff and another, who had released his rights to the plaintiff in consideration of a certain sum of money, the exclusive privilege of selling flesh within the limits of the municipality for one year. The court held that certain powers conferred on the municipality to issue licenses, including licenses for the sale of flesh, did not give it the power to create in advance a monopoly such as the one in question, because such power was not expressly conferred and was contrary to public policy under section 23 of the Indian Contract Act.

Section 27 of the Indian Contract Act contains certain provisions. regarding contracts which restrain a person from exercising an occupation, and these have been interpreted in connection with the lawfulness of trade combinations. Section 27 reads as follows:

SEC. 27. Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

Exception 1.-One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.

Exception 2.-Partners may, upon or in anticipation of a dissolution of the partnership, agree that some or all of them will not carry on a business similar to that of the partnership within such local limits as are referred to in the last preceding exception. Exception 3.-Partners may agree that some one or all of them will not carry on any business, other than that of the partnership, during the continuance of the partnership. 1 Somu Pillai v. Municipal Council, Mayavaram, Indian Law Rep., Madras Series, XXVIII, 1905, p. 520.

:

se e was that of a trade combination formed

cerns which, for a term of four years, agreed ... should be Rs. 4-8-0 per palla of cotton, or be agreed on, and that, in their accounts, they per palla to cost of ginning and the remainder winch profit should be divided among the parde number of gins they possessed. One of the Day to the others the amounts due under the the accounts and was sued for payment by one to the agreement. The court held that the Co recover; that the only agreement sought to be vement to divide profits and that such an agree

arese in connection with a combination of ice 2 wherein all the ice manufacturers of Bombay ter business in concert until the end of 1903 and e agreement was terminated by notice. The c. among other things, for minimum selling prices s of production and sale, for restricting additions tery of members, and for contributions from general fund or pool for division among the w. provided further that if a competing ice

ed the agreement would be terminated. By a vement the price of ice for certain wholesale ... 38 per ton, and prices were agreed on for cers, except steamers, which in no case were

A few months after this pool began opera...s notified the pool managers that it was vement was void and that it would sell ice at Rs. was below the agreed prices. Suit was brought e pool which prayed the court to restrain the o terms of the agreement, to order the payvement to the pool fund, to award damages, wch requires attention here was the defense

was void. The court held, per Jenkins, ,^,gation to contribute to the pool fund was only issue the court needed to decide, straint of trade within the meaning of Ctact Act, nor was it void as contrary to of the same act, because so far as such wered those which are contrary to public Ny sexton 27. The court held further that the

aw Rep., Bombay Series, Vol. XXII, 1898, p. 861.

22 range pay, Tindian Law Rep, Bombay Series, XXIX, 1905, p. 107.

only relief which could be given under the circumstances of the case was damages for the nonpayment of contributions to the pool fund.

Section 8. Egypt.

The Egyptian Penal Code for mixed tribunals1 in article 308 provides a penalty against interfering with free competition in auctions almost identical with article 412 of the French Penal Code (see p. 272), and in articles 309 and 310 combinations which tend to effect changes in the prices of commodities or securities are prohibited in practically the same terms as in articles 419 and 420, respectively, of the French Penal Code. (See pp. 269-270.)

Section 9. Germany.

There are no general laws specifically applicable to trusts or combinations (cartels) in Germany, except with respect to bidding on public contracts, but some of the general legislation, as well as certain local laws and acts affecting specific industries, are of importance.

CRIMINAL LAW.-The Penal Code for the German Empire2 contains no provisions specifically affecting cartels. Of some interest in this connection is section 253 of the Penal Code, which prohibits extortion. The following case illustrates the application of this law where a cartel was involved: A powder manufacturing combination refused to supply dealers who failed to patronize it exclusively, and threatened to discontinue the supply of a customer who had purchased such goods from a competitor. The Imperial Court condemned the powder combination under this section of the Penal Code.3

In section 302e of the Penal Code penalties are imposed on those who exploit the necessity, thoughtlessness, or inexperience of another in order to obtain for themselves or a third party a pecuniary advantage which is strikingly disproportional to the service rendered.

The criminal law of Alsace-Lorraine, however, preserves the prohibitions of articles 419 and 420 of the French Penal Code (see pp. 269-270), but no cases appear to have occurred of the application of this law. Furthermore, the States of the German Empire have supplementary criminal laws of local application, and several of them have laws prohibiting agreements to avoid competition in bidding on public contracts, as, for example, Prussia, Hessen, and Alsace-Lorraine. The Prussian Criminal Code of April 14, 1851, section 270, provides as follows:

Whoever by force or threats or by the promise or guarantee of an advantage, restrains another from bidding or overbidding in an auction undertaken by public authorities

1 Code Pénal des Tribunaux Mixtes; Codes des Tribunaux Mixtes d'Egypte, Alexandrie, 1907.

* Strafgesetzbuch für das deutsche Reich.

Urt. v. 29. Nov. 1900, Entscheidungen des Reichsgerichts in Strafsachen, Bd. 34, S. 15 ff.

30035°-16-17

or officials, whether the same relates to sales, leases, delivery of goods, enterprises or business of any kind, shall be punishable with a fine up to three hundred thalers or with imprisonment up to six months.

Similar provisions are found in the Police Criminal Law of Hessen, article 381 (Oct. 30, 1855, and Oct. 10, 1871), and in article 412 of the Criminal Code of Alsace-Lorraine (cf. French Penal Code, art. 412). These prohibitions have been applied and interpreted by the courts in various cases.1

According to statements in the press the German Government shortly prior to the war contemplated applying another section of the Penal Code in connection with an investigation of the relations of a certain tobacco and cigarette dealer in Dresden with the BritishAmerican Tobacco Co. The provisions of the section in question, namely, section 128, are as follows: 3

Participation in a society whose existence, constitution or purpose shall be kept secret from the Government, or in which is promised obedience to an unknown superior, or unconditional obedience to a known superior, makes the members punishable with imprisonment up to six months and the promoters and leaders of the society with imprisonment from one month to one year.

It also provides in the case of officials for the loss of capacity to hold office for a period of from one to five years.

CIVIL LAW.-While the general civil law of the German Empire does not contain any provisions expressly governing the legality of combinations, certain sections of the Industrial Code and of the Civil Code have occasional applicability. The civil law also contains provisions which are of importance in determining the legality of particular practices of cartels; these are found chiefly in the Civil Code, but also in the Law against Unfair Competition.

The chief provisions of the law which are of significance with respect to the legality of combinations are section 1 of the Industrial Code and section 138 of the Civil Code.

In section 1 of the Industrial Code the following provision is made: The pursuit of an industry is permitted to everyone, in so far as exceptions or limitations are not imposed or permitted in this law.*

That this provision of the law does not render invalid the existence of a combination was decided in the case of the book dealers' cartel, referred to below. (See p. 239.) A more important decision was that made with regard to the Saxon wood-pulp cartel which apportioned the output of members of the combination and seld their products through a common selling agency. In a suit to enforce the agree

1 Derkschrift über das Karte 'wegen Bas Ntet 20 Reebant des Inner II. Teil, Berlin, 1906, pp. 23. 1ocal author tas, moreover, when provide agasist, even dužnations a deiling