107 Minn. 506 | Minn. | 1909
(after stating the facts as above).
The trial court found that the Duluth Board of Trade, as organized and conducted, is not an arrangement, conspiracy, or combination in restraint of commerce within the state; that it does not restrain, limit, interfere with, or destroy open and free competition in the purchase and sale of grain at Duluth; that competition between seller and buyer is active and free; that the board does not fix prices of grain, nor prevent nor limit competition in the purchase or sale of grain; but that
1. The right of the state to appeal in a proceeding of this nature has been discussed by counsel at great length. The action is in form a civil proceeding, wherein the state seeks to obtain a judgment forfeiting the corporate privileges, powers, and franchises, dissolving the corporation, and disposing of its property, and enjoining the defendants and each of them from in any way continuing the alleged conspiracy, and from in any way interfering with, restraining, or limiting open and free competition in the sale and purchase of produce, in the Duluth market or elsewhere. It is authorized by the statute, and is a civil proceeding, notwithstanding the fact that the statute makes the prohibited acts criminal. Without entering upon an extended discussion of the question, we sustain the right of the state to prosecute the appeal.
2. The finding that there- has been no conspiracy or boycott against the Minnesota Farmers' Exchange, and that it never applied for membership in the Duluth Board of Trade, leaves but one question to be determined, and that is whether, by the promulgation of rule 26 and the transaction of business thereunder, the defendant has entered into a combination, contract, arrangement, or conspiracy in violation of chapter 359; p. 487, Laws 1899.
The public policy of this state with reference to combinations and agreements which tend to restrain trade, and limit, restrict, or regulate the production, price, and distribution of articles of trade, manufacture, or use, has been declared by constitutional provisions and statutory enactments.
In 1888 there was embodied in the organic law of the state a declaration that “any combination of persons, either as individuals or as members or officers of any corporation, to monoplize the markets for food products in this state, or to interfere with, or restrict the freedom of such markets, is hereby declared to be a criminal conspiracy, and shall be punished in such manner as the legislature may provide.” Const, art. 4, § 35. In 1891 the legislature enacted a statute denouncing as illegal all combinations to fix prices or to control the production of any commodity. Chapter 10, p. 82, Laws 1891. In 1899 the provisions of this statute were elaborated and re-enacted as chapter 359 of the
“Any contract, agreement, arrangement, or conspiracy, or any combination in the form of a trust, or otherwise, hereafter entered into which is in restraint of trade or commerce within this state, or in restraint of trade or commerce between any of the people of this state and any of the people of any other state or country, or which limits or tends to limit or control the supply of any article, commodity or utility, or the articles which enter into the manufacture of any article or [of] utility, or which regulates, limits or controls or raises or tends to regulate, limit, control or raise the market price of any article, commodity or utility, or tends to limit or regulate the production of any such article, commodity or utility, or in any manner destroys, limits or interferes with open and free competition in either the production, purchase or sale of any commodity, article •or utility is hereby prohibited and declared to be unlawful. * * *
“Any corporation heretofore or hereafter created, organized or existing under the laws of this state which shall hereafter either directly or indirectly make any contract, agreement or arrangement, or enter into any combination, conspiracy or trust as defined in section one (1) of this act, shall, in addition to the penalty prescribed in section two (3) of this act, forfeit its charter, rights and franchises, and it shall thereafter be unlawful for such corporation to engage in business, either as a corporation or as a part of any combination, trust or monopoly, except as to the final disposition of its property under the laws of this state.”
With the exception of a provision prohibiting boycotting (chapter 1,94, p. 369, Laws 1901), no further changes were made in the law until the adoption of the Revised Laws of 190&, in which the act of 1899 appears in substance as sections 5168 and 5Í69. Section 5168 provides that: “No person or association of persons shall enter into any pool, trust agreement, combination, or understanding whatsoever with any other person or association, corporate or otherwise, in restraint of trade, within this state, or between the people of this or of any other state or country, or which tends in any way or degree to limit, fix, control, maintain,, or regulate the price of any article of trade, manufacture, or use bought and sold within the state, or which limits or tends
A subsequent statute (chapter 252, p. 342, Eaws 1907) makes it unlawful for persons or corporations handling grain at public warehouses in the state to enter into any combination, contract, agreement, or understanding with any other person or corporation owning or operating any other public warehouse at any railway station, whereby the amount of grain to be received or handled shall be equalized or pooled between such warehouses, or whereby the profits or earnings derived from such warehouses shall be divided or pooled or apportioned in any manner, or whereby the price to be paid for any kind of grain at such station shall be fixed or in any manner affected.
3. The Minnesota anti-trust law is framed along the lines of the federal statute, although it is more diffuse. It may fairly be assumed, however, that the general purpose of all statutes of this kind is the same, and we may therefore properly look to the decisions made under federal and state statutes of a similar character for the principle by which to construe our own statute. State v. Northern Securities Co. (C. C.) 123 Fed. 692. The first clause or part of the statute prohibits agreements and combinations in restraint of trade, thus following the language of section 1 of the federal statute (Act July 2,1890, c. 647, 26 St. 209 [U. S. Comp. St. 1901, 3200]). This general language is then followed by provisions which specifically forbid combinations or agreements which tend in any way to limit, fix, control, maintain, or regulate the price or production of any article of trade, manufacture, or use bought and sold within the state, or which prevents or limits competition in the sale or purchase of the same. The statute thus specifically refers to such agreements as affect the price or production of articles of the kind named, or competition in the purchase and sale thereof.
We have reached the conclusion that, in view of the statutory powers of the Duluth Board of Trade, the nature of its business, and the services for which the uniform charges are required to be made, the agree
In 1868 (chapter 20, p. 35, Daws 1868) the legislature enacted a law which authorized any number of persons, not less than three, in any town or city having a population of more than three thousand, to proceed according to the provisions of title 3, c. 34, G. S. 1866, for the organization of corporations for purposes other than pecuniary, to “associate themselves and become incorporated as a chamber of commerce, or board of trade, for the purpose of advancing the.commercial, mercantile and manufacturing interests of such city or town, for inculcating just and equitable principles of trade; for establishing and maintaining uniformity in the commercial usages of such city or town; for acquiring, possessing and disseminating useful business information, and for adjusting the controversies and misunderstandings which may arise between individuals engaged in trade, and for promoting the general prosperity of such city or town.” The ordinary powers were conferred upon such corporations, and in addition thereto they were authorized to constitute committees of reference and arbitration and committees of appeals, to be governed by such rules and regulations as may be prescribed in the rules, regulations and by-laws, for the settlement of matters of difference between members of the association and other persons not members. They were authorized to “examine measures, weigh, gauge or inspect flour, grain, provisions, liquor, lumber, or any other article of produce or traffic commonly dealt in by the members of said corporation, and the certificate of such person or inspector as to the quality or quantity of any such article, or their brand or mark upon it, or upon any package containing such article, shall be evidence between buyer and seller, of the
Chapter 20, p. 35, Laws 1868, was carried forward into G. S. 1878, where it became sections 197-199, inclusive, of chapter '34. Chapter 37, p. 54, Laws 1881, amended section 2, c. 20, p. 36, Laws 1868, and provided that corporations organized thereunder “shall have full power and authority to purchase, improve, hold, use, rent, mortgage, sell and convey such real and personal property as it may deem advisable, and may by resolution or by-law prescribe the terms and conditions of membership and the mode of admitting members ; and in like manner may prescribe what officers it will have, their mode of election or appointment, and their functions and duties, and generally as to the management and transaction of all its business and affairs.” In 1883 (chapter 138, p. 193, Laws 1883) the legislature enacted a new statute providing for the organization of chambers of commerce and boards of trade. This statute expressly legalized all such corporations which had been incorporated under chapter 20, Laws 1868, and chapter 37, Laws 1881, and. conferred upon them all the power, authority, and jurisdiction conferred on such as should be organized under the new act. By this act the powers of such corporations were specifically stated and somewhat, enlarged. The 1868 statute had provided that such corporations could be organized “for establishing and maintaining uniformity in the commercial usages of such city or town.” The act of 1883 authorized their creation in counties, as well as in cities and towns — the restriction as to population being retained — and added, after “maintaining,” the words “and enforcing.” Fines for a breach of the rules, regulations, and by-laws might be imposed on the members and collected in the courts as in an action for debt. In 1887 (chapter 87, p. 138, Laws 1887) section 1 of the act of 1883 was amended so as to provide for the organization of chambers of commerce or boards of trade, or both, in any organized village, city, town, or county, without reference to the population thereof. The existing statute became sections 2982-2984, inclusive, subtit. 7, tit. 3, c. 34, G. S. 1894, and section 3112, et seq., R. L. 1905.
It is through such organizations as the Duluth Board of Trade that the grain trade of the Northwest has been and now is largely transacted. The purposes for which such corporations 'may be created are stated in the statute and in the articles of incorporation of this defendant. The primary object is to furnish facilities for the proper conduct of business. The board of trade itself neither buys nor sells grain. It maintains an exchange room where the representatives of buyers and sellers meet and compete, and their competition results in trades in grain. It maintains telegraphic communication with other grain markets, and furnishes and posts information as to such markets and as to crop conditions generally. It has a building, in which its members engaged in the grain trade have offices, as do others who are connected more or less directly therewith. It is not claimed that the board fixes prices at which grain is purchased and sold. It collects and publishes statistics. It
The nature of the grain business seems to require peculiar and unusual facilities for its transaction. The grain is brought by the producer to local stations, where it is placed in elevators or sold to local buyers. It must then be shipped to terminal points, like Duluth or Minneapolis, to be there disposed of on the market. These great central markets are essential, not only for the preservation and storing of the grain in large quantities, but also in order that the business may be financed. At about the same time in each year great sums of money are required for this purpose, and it is stated that the banks of Minneapolis and Duluth furnish each year to the grain men from $40,000,000 to $50,000,000. This money, which is absolutely necessary for the moving of the crops, cannot be obtained unless the business is so organized and conducted as to minimize the risks resulting from fluctuating prices. Through these organizations the demoralization of prices of the products which constitute the basis of credits is prevented. These markets also enable parties operating elevator lines and purchasing large quantities of grain to sell for future delivery on each day substantially the amount of grain which they purchase at interior points, thus reducing the hazards of the business and enabling them to procure from financial institutions the funds necessary to move the crops.
The business of handling grain is of such a nature as to subject it to regulations which would be entirely unjustifiable if applied to a purely private business. It is because the business is of a quasi public nature that even the owner of a country elevator, who buys for himself alone and is his own grader and weighmaster, may be required to secure a license from the state. State v. W. W. Cargill Co., 77 Minn. 223, 79 N. W. 962; W. W. Cargill Co. v. Minnesota, 180 U. S. 452, 21 Sup. Ct. 423, 45 L. Ed. 619. For the same
The legislatures and courts recognize that such organizations serve a useful and proper purpose in modern business communities, and no disposition has been shown to unduly restrict the exercise of their corporate powers and functions. Evans v. Chamber of Commerce of Minneapolis, 86 Minn. 448, 91 N. W. 8; McCarthy Bros. Co. v. Chamber of Commerce of Minneapolis, 105 Minn. 497, 117 N. W. 923. The Duluth Board of Trade was organized long before the enactment of the anti-trust law, under a statute which expressly authorized such corporations. Both statutes were subsequently embodied in the revised laws. The anti-trust statute applies to all persons, associations, and corporations, and the members thereof; but it should not be construed so as to destroy or cripple a legitimate, legally authorized business, unless such clearly appears to have been
4. To say that a combination restrains trade and prevents competition is a repetition of the same idea — the giving of two names to the same thing. Whatever restrains trade prevents competition, and whatever prevents competition in trade necessarily restrains trade. The word “monopoly,” which plays so great a part in the law, conveys the same idea, because where there is monopoly there can be no competition. Production, and hence prices, are under the control of the monopolist, to the possible and probable injury of the public. Freedom of trade requires competition. Without one the other cannot exist, and whatever restrains the one restricts the other. It is true that unrestrained and unregulated competition may destroy what it it designed to preserve; but the theory of law and legislation still is that the welfare of the public requires that competition in trade and commerce shall exist, in order that freedom of trade may be maintained. To understand the language of the statute, it is necessary to know something of its history. The contract in restraint of trade, which originally fell under the condemnation of the common law, was one whereby a party bound himself not to follow some particular occupation, trade, calling, or profession, or to engage in some particular business for a period within a particular territory. From the earliest time the policy of the English law has been to discourage these voluntary restraints which tradesmen were induced to impose upon themselves, because they tended to deprive the community of the services of one of its members, and frequently tended to create a monopoly, and thus destroy the freedom of trade.
An early, and possibly the first, case in which a contract of this character was held void was decided during the reign of Henry
All restraints of trade were then thought to be unlawful; but in the course of time it was found that so rigorous and far-reaching a rule seriously interfered with ordinary everyday business transactions, and it was gradually relaxed until it is now the law of England and America that contracts in partial restraint of trade are valid, when reasonably necessary to protect the legitimate interests of the covenantee. It must, however, be a restraint which, under all the circumstances and conditions, is reasonable,' and, as said by Tindal, C. J., in Horner v. Graves, 7 Bing. 735: “We do .not see how a better test can be applied to the question whether reasonable or not, than by considering whether the restraint is such only as to afford a fair protection to the interests of the party in
If a contract is unreasonable according to this test, it is invalid at common law; and this, in the particular case, may be because of either or both of the reasons given by the judges in the earlier cases. It restricts the freedom of the individual, limits his capacity to utilize his labor and skill for the benefit of himself, his family, and the public, and prevents him from competing with the covenantee in the trade or business from which he is excluded, to the injury of the public, which is deprived of the benefits which result from the freedom of trade. But, as said by Judge Taft, in U. S. v. Addyston Pipe & Steel Co., 54 U. S. App. 723, 85 Fed. 271, 282, 29 C. C. A. 141: “Where the sole object of both parties in making the contract as expressed therein is merely to restrain competition, and enhance or maintain prices, it would seem that there was nothing to justify or excuse the restraint, — that it would necessarily have a tendency to monopoly, and therefore would be void. In such a case there is no measure of what is necessary to the protection of either party, except the vague and varying opinion of judges as to how much, on principles of political economy, men ought to be allowed to restrain competition. There is in such contracts no main lawful purpose, to subserve which partial restraint is permitted, and by which its reasonableness is measured, but the sole object is to restrain trade in order to avoid the competition which it has always been the policy of the common law to foster.”
The contracts or agreements in restraint of trade which fall under the condemnation of the anti-trust statute are of the second class, and are contrary to public policy because they have a tendency to prevent competition in trade and commerce. The Englishmen of the 1400’s, blindly groping for some means of protecting themselves from unconscionable traders, adopted what now seems the absurd device of prohibiting entirely the buying and selling of certain' articles for profit. They desired, if possible, to be free to deal with tradesmen who were themselves free to buy and sell without restraint. They therefore made the buying up large quantities of corn and other victuals with the intent to sell them again an indictable offense, because this of course must be injurious to the public by putting it in the power of one or two rich men to raise the price of provisions at their own discretion. It will be observed thát this act applied to victuals and breadstuffs only, but St. 5 & 6 Edw. VI, c. 14, made criminal the buying or contracting for any merchandise or victuals coming on the way to markets, or dissuading persons from buying their goods there, or persuading them to enhance the price when there, any of which practices makes the market dearer to the fair trader. 3 Stephen, History Crim. Law
More objectionable, because more far-reaching and detrimental to the public interests, were the special privileges enjoyed under grants from the crown, which were known as “monopolies.” The technical monopoly, as distinguished from the practical monopoly of modern times, was a license or privilege, granted by the sovereign, to an individual for the sole buying and selling, making, working, or using, of anything whatsoever whereby the people in general were excluded from the liberty of manufacturing and trading, which they had before enjoyed. In 1 Hawkins, Pleas of the Crown (6th Ed.) 470, § 1, c. 79, a monopoly is defined as “an allowance by the king, to any person or persons, of the sole buying, selling, making, working, or using of anything, whereby any person is sought to be restrained from any freedom which he had before, or hindered from his lawful trade.” It differed from engrossing only in that in the case of monopoly a patent was had from the king, while engrossing was a transaction between individuals. 4 Blackstone, Com. 159; 3 Coke, Inst. 181; Leeper v. State, 103 Tenn. 500, 53 S. W. 962, 48 L. R. A. 167.
From these analogous acts, which were illegal at common law, and under the English statutes, which became a part of the common law, it appears that the purpose in all the prohibitions was to preserve the freedom of trade by means of free competition between the traders themselves, in order that the public should not be required to pay exorbitant prices for articles of common use and necessity. It was to prevent any man or set of men from possessing the power to arbitrarily. determine the price at which an article of common use shall be sold, because he who controls prices is the master of the world. The well-being of the trader, and the indirect benefit to the community through his activities, was also an important factor; but much of the solicitude for the individual which was manifested in the early decisions seems unnecessary to modern
At common law contracts in restraint of trade were not unlawful in the sense of being criminal, nor did their breach give rise to a civil action. They were simply unenforceable. U. S. v. Addyston Pipe & Steel Co., supra; Mogul v. McGregor [1892] A. C. 25; Hornby v. Close, L. R. 2 Q. B. 153. Such contracts could not be enforced, nor could monopolies be legally enjoyed; but neither the making of the one nor the acquiring and enjoying of the other was a crime. A conspiracy to create a monopoly in commodities which constitute the necessities of life, or to enhance the market price therof, to the prejudice of the consumer, was and is a criminal offense at common law. See Morris v. Barclay, 68 Pa. St. 173, 8 Am. 159; Richardson v. Buhl, (Diamond Match Co.) 77 Mich. 632, 43 N. W. 1102, 6 L. R. A. 457; Nester v. Continental Co., 161 Pa. St. 473, 29 Atl. 102, 24 L. R. A. 247, 41 Am. St. 894; Chicago v. People, 114 Ill. App. 75; Pocahontas v. Powhatan, 60 W. Va. 508, 56 S. E. 264, 10 L. R. A. (N. S.) 268, 116, Am. St. 901; People v. Fisher, 14 Wend. 9, 28 Am. Dec. 501; People v. Milk Exchange, 145 N. Y. 267, 39 N. E. 1062, 27 L. R. A. 437, 45 Am. St. 609; American Biscuit & Mnfg. Co. v. Klotz (C. C.) 44 Fed. 723; People v. Sheldon, 139 N. Y. 251, 34 N. E. 785, 23 L. R. A. 221, 36 Am. St. 690; Harding v. American, 182 Ill. 551, 615, 55 N. E. 577, 64 L. R. A. 738, 74 Am. St. 189. A very complete collection of cases decided on common-law principles will be found in notes in 11 Am. Ry. & Corp. Rep. 388, 445, and 474 (1895). See also Noyes, Intercorp. Rel. (2d Ed.) cc. 35, 36.
5. The common-law rules were sufficient under ordinary conditions to protect the public and yet leave ample freedom for legitimate business transactions. But the astonishing material development of this country, with its opportunities for exploitation and the acquisition of great wealth, produced conditions which the common law, with its inadequate remedies, seemed unable to control. Competition was rapidly being eliminated from the business situation, with the result that the prices of most of the articles of everyday use were determined arbitrarily by men who controlled their
(a) The most important of these, because of the nature and magnitude of the interests affected, is the Sherman anti-trust statute of July 2, 1890, entitled “An act to protect trade and commerce against unlawful restraints and monopolies.” (26 St. 209, c. 647). Its terms are very general, and its prohibitions are against (1) contracts and combinations in restraint of trade and (2) attempts to monopolize 'trade or any part thereof. Section 1 provides that “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” and punishable as a crime. Section 2 provides that “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.” The statute is made applicable to the District of Columbia and the territories, and its enforcement is provided for through criminal proceedings and the injunctional power of the. courts. Individuals who are injured by reason of a violation of this statute are given a remedy by way of damages against the wrongdoer. To aid in its enforcement congress has enacted statutes providing for the prompt hearing of suits in equity instituted by the government and providing for special officers with ample funds under their control. U. S. Comp. St. 1901, 3200, et seq.; U. S. Comp. St. Supp. 1903, 376; Id. 366, 367. See also the anti-trust provision of the Wilson tariff act (Act August 27, 1894, c. 349, §§ 7-3-77, 28 St. 570 [U. S. Comp. St. 1901, 3202, 3203]) and the immunity proviso of Appropriation Act Feb. 25, 1903, c. 755, 32 St. 904 (U. S. Comp. St. Supp. 1907, 884).
The validity of the Sherman act as an exercise of the power to regulate commerce was sustained in the Joint Traffic Assn. Case, 171 U. S. 505, 19 Sup. Ct. 25, 43 L. Ed. 259. It embraces only agreements and combinations and acts which have direct connec
The following combinations and agreements have been held illegal under the Sherman law: An agreement between certain railroad companies which provided for establishing and maintaining, for their mutual protection, reasonable rates, rules, and regulations in respect to freight traffic, through and local, and by which free competition between these companies was restricted. U. S. v. Trans-Missouri Freight Assn., supra. An arrangement between certain railway companies with reference to railroad traffic among the states, under which the railroads were not subject to competition among themselves, even though the contracts were in themselves reasonable. U. S. v. Joint Traffic Assn., supra. An agreement between certain private companies and corporations engaged in different states in the manufacture, sale, and transportation of iron pipe, whereby competition among them was avoided. Addyston Pipe & Steel Co. v. U. S., supra. A combination created by an agreement between certain dealers in tiles, grates, and mantels in different states, whereby they controlled, or sought to control, the prices of such articles in these states. Montague & Co. v. Lowry, 193 U. S. 38, 24 Sup. Ct. 307, 48 L. Ed. 608. A combination of publishers and booksellers to fix prices and compel publishers and dealers, by means of rewards and punishments, to sell at the prices so fixed. Bobbs-Merrill Co. v. Straus (C. C.) 139 Fed. 155. See Scribner v. Straus (C. C.) 139 Fed. 193.
A contract or agreement whereby a holding corporation was created, to which the stockholders of competing parallel lines of railways, contrary to the laws of the state which created the competing companies, agreed to transfer the stock of both roads, was prohibited by the Sherman act, because it tended to destroy competition among' carriers and create a monopoly of the traffic. Northern Securities Co. v. U. S., supra. In the so-called Beef Trust case it was alleged that the defendants were guilty of, the following acts: (a) Directing their purchasing agents to refrain from bidding against each other at auction sales of live stock; (b) bidding up the price of.such stock for a few days at a time, to influence large shipments, and then ceasing to bid in order to obtain the stock thus shipped at less than
The owner of a patented article may impose restrictions upon its manufacture and sale, and, if the conditions are otherwise not illegal, they will not violate the Sherman act, even though the tendency is to restrain trade. The very object of the patent laws is to create monopoly. Bement v. National Harrow Co., 186 U. S. 70, 22 Sup. Ct. 747, 46 L. Ed. 1058. But where the patentee went beyond the rights secured by the patent, in raising and maintaining prices in states where the patent had no practical existence, the contract was held forbidden by the Sherman act. Rubber Tire Wheel Co. v. Milwaukee Rubber Works Co. (C. C.) 142 Fed. 531, but see 154 Fed. 358. Contracts under which a board of trade furnishes stock quotations under certain conditions are not in restraint of trade at common law or under the Sherman act. Board of Trade of City of Chicago v. Christie Grain & Stock Co., 198 U. S. 236, 25 Sup. Ct. 637, 49 L. Ed. 1031.
(b) The federal anti-trust act necessarily applied only to contracts, combinations, and conspiracies in restraint of interstate and international trade and commerce, and soon after its passage the states began to enact similar statutes for the purpose of reaching agreements and combinations which were beyond the reach of the federal power. Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 20 Sup. Ct. 518, 44 L. Ed. 657, and National Cotton Oil Co. v. Texas, 197 U. S. 115, 25 Sup. Ct. 379, 49 L. Ed. 689, sustain the power of the states to enlarge the common-law rules and prohibit combinations in restraint of trade within their borders, when such com
Anti-trust statutes of the same general character, although differing somewhat in scope and detail, are now in force in Arkansas (Act March 16, 1897, p. 60; Act March 6, 1899, p. 50); California (section 1673, Civ.' Code; chapter 530, p. 984, St. 1907); Florida (chapter 4534, p. 60, Taws 1897, confined to beef and meats); Georgia (Taws 1896, p. 68); Illinois (Laws 1907, p. 216, amending Laws 1891, p. 206, and Laws 1893, p. 89, which were declared unconstitutional in Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 Sup. Ct. 431, 46 L. Ed. 679); Indiana (chapter 243, p. 490, Laws 1907; chapter 148, p. 257, Laws 1899); Iowa (Code, §§ 5060-5062) ; Kansas (Act March 8, 1897, p. 481, c. 265, sustained in Smiley v. Kansas, 196 U. S. 447, 25 Sup. Ct. 289, 49 L. Ed. 546); Kentucky (Ky. St. §§ 3915-3921 [Russell’s St. §§ 3717-3723]); Louisiana (Act July 7, 1892, p. 120, No. 90; Const, art. 190); Maine (R. S. 1903, c. 47, §§ 53-55); Massachusetts (chapter 454, p. 409, Laws 1908); Michigan (Act No. 255, p. 409, Pub. Acts 1899); Minnesota (R. L. 1905, §§ 2098, 5168; chapters 252, 269, pp. 342, 363, Laws 1907); Missouri (Laws 1891, p. 186; R. S. 1899, §§ 8965-8977 [Ann. St. 1906, pp. 4150-4156]); Montana (Pen. Code 1895, c. 8, §§. 321, 325 [Rev. Codes, §§ 8285, 8289]); Nebraska (chapter 79, p. 347, Laws 1897); North Carolina (chapter 218, p. 254, Pub. Laws 1907); Oklahoma (chapter 83, p. 750, Laws 1907); New York (chapters 690, 727, pp. 1514, 1558, Laws 1899; Pen. Code, § 168); North Dakota (Rev. Codes 1899, §§ 7480-7484) ; Ohio (Bates’ Ann. St. 1904, § 4427-1); South Carolina (Act Feb. 26, 1902 [23 St. at Large, p. 1057]); South Dakota (chapter 131, p. 196, Laws 1907; Rev. Pen. Code 1903, §§ 770-781) ; Tennessee
These statutes vary somewhat in their terms, and many cases have been decided under them. A reference to a few of the decisions will serve to illustrate the construction which has been placed upon the statutes by the state courts. The following have been held prohibited by the statutes:
A combination between corporations engaged in carrying freight and passengers by boat between points in different states, the purpose of which was to create a monopoly in the traffic. White Star Tine v. Star Tine, 141 Mich. 604, 105 N. W. 135, 113 Am. St. 551 (applies Sherman act). A contract whereby one party agrees to remain out of business, which is broader than is necessary to protect the covenantee, and which tends to restrain trade and create a monopoly. Anderson v. Shawnee, 17 Okl. 231, 87 Pac. 315, 15 L. R. A. (N. S.) 846, affirmed 209 U. S. 403, 28 Sup. Ct. 572, 52 L. Ed. 865. A contract having for its object the fixing and control of the price of farm machinery. International v. Com., 124 Ky. 543, 99 S. W. 637. An agreement whereby a corporation secured the exclusive right and privilege. of marketing the products of the American Tobacco Company in New York City, the company controlling ninety per cent, of the tobacco business of' the 'United States, the effect of which is to destroy competition. Tocker
The Texas statute (Laws 1903, p. 119, c. 94), prohibiting trusts and defining a trust as a combination of capital, skill, or acts of two or more persons to create or carry out restrictions in the free pursuit of any business authorized by the laws of the state, or to prevent or lessen com
The Michigan statute (Act No. 355, p. 409, Pub. Acts 1899), which made it unlawful to contract not to sell any commodity below a fixed value, or to keep the price of an article at a fixed figure, or to settle the price of any article so as to prevent competition, or to combine or unite any interest connected with the sale of any commodity that its price may be affected, made illegal a contract, embodied in the rules of a master plumber’s club, which provided that the price of supplies should be fixed by a committee, at which price all were to sell to the members of the exchange. The tendency was to create monopoly, and the court said: “It is no answer to say that this monopoly has in fact reduced the price. * * * That policy may have been necessary to crush competition. The fact exists that it rests in the discretion of this company at any time to raise the price to an exorbitant degree.” Richardson v. Buhl, 77 Mich. 632, 660, 43 N. W. 1102, 6 L. R. A. 457; Hunt v. Riverside, 140 Mich. 538, 104 N. W. 40, 112 Am. St. 420.
The Nebraska statutes (chapter 114, p. 675, Laws 1887, and chapter 80, p. 353, Laws 1897), which prohibit combinations of grain dealers to fix the price of grain, do not exempt such dealers from the general anti-trust statute. State v. Omaha, 75 Neb. 637, 106 N. W. 979, 110 N. W. 874. The statutes forbid a combination to control and limit the price of milk. (Ford v. Chicago, 155 Ill. 166, 39 N. E. 651, 27 L. R. A. 298), a combination to control the price of beer (Houck v. An
Many attempts have been made to bring unobjectionable transactions within these statutes, and a reference to some of the cases will serve to show the proper scope of the prohibitions. A contract not to sell any.other whiskey of the same brand in the place where the buyer was engaged in business until the buyer had disposed of the quantity purchased was held not in violation of the Texas act of 1899 (Acts 1899, p. 246, c. 146), which prohibited agreements to fix or regulate the price of any article, to maintain such price when fixed, or to limit or fix the amount or quantity of any article. Norton v. Thomas, 99 Tex. 578, 91 S. W. 780. This statute was held not to condemn a contract whereby a sleeping car company was to furnish sleeping cars for a railroad company, and in which the only reference to prices was the stipulation that the sleeping car company might charge passengers on its cars on the trains of the railway company such fares as were customary on competing lines of .railway where equal accomodations were furnished. No one had a right to run cars on the railroad, and there
An agreement between a carrier and an association of citizens for special rates on excursion tickets does not violate either the state or federal anti-trust statutes. Lytle v. Galveston, 100 Tex. 292, 99 S. W. 396, 10 L. R. A. (N. S.) 437. In Hartz v. Eddy, 140 Mich. 479, 103 N. W. 852, it was held that a certain lease was not a part of the plan of a salt trust to limit the production of salt, raise the price thereof, and create a monopoly. In State v. Virginia-Carolina, 71 S. C. 544, 51 S. E. 455, it was held that the anti-trust statute should be construed to mean that the contract is against public policy when made with a view to lessen, or which tends to lessen, full and free competition to an unreasonable extent. In Wood v. Greenwood, 75 S. C. 378, 382-384, 55 S. E. 973, 9 L. R. A. (N. S.) 501, it was said: “A construction of the statute which would make obnoxious every contract which tends in any measure to affect the cost or price of articles to the producer or consumer' * * * would probably render the statute liable to the objection that it unnecessarily and unreasonably abridges the freedom of contract guaranteed by the State and Federal constitutions. * * * In determining whether a particular contract falls within the inhibition of the statute, the court must necessarily consider the tendency or power of the contract to injure the public, either considered in itself or as part of a scheme to destroy or impede competition and control supply and prices. A contract may be lawful in itself as an isolated matter but yet be unlawful as a part of a scheme to create a virtual monopoly. * * * Every case, however, alleged to fall within the statute must be controlled by its own peculiar facts and circumstances, and we will not attempt to state any hard and fast rule by which every case must be governed. The main general test should be whether the contract, trust or combination is monopolistic in purpose or natural tendency. If so, it unreasonably affects competition and prices to the detriment of the public and is obnoxious to the statute.” It appeared that a New York corporation had entered into a contract with a South Carolina corporation whereby the latter bound
The rules of a live stock exchange, which provided for the expulsion of members who were guilty of commercial dishonesty, and forbade members from having any further commercial transactions with the person who had been expelled, were held not within the inhibition of the statute. The exchange, said the court, “does not seek to limit trade, nor to limit competition by refusing to buy from or sell to others for the reason that they are not members of its association. But they can boycott a member — or, rather, they can refuse to deal with him, not because he is not a member of the exchange, but because he has been found guilty and expelled from the association for his wrongdoing.” Gladish v. Kansas City, 113 Mo. App. 726, 732, 89 S. W. 77. The case was distinguished from Heim v. Belinder, 97 Mo. App. 64, 71 S. W. 691, where certain brewers had an agreement that they would not sell to any one indebted to either of the others for beer until he had paid that debt. An agreement of that character, it was said, “tended to establish a monopoly, deprive the debtor of the benefit of competition, arid to impose a penalty on his condition which was forbidden by the statute against trusts and pools.” “The object of the statute” said the court in the Gladish case (page 733), “is to promote the public welfare, and not to outlaw harmless combinations, or those which are beneficial in their nature. This statute, like every other, should receive a reasonable construction. The purposes of the exchange are to be commended” — citing Haebler v. New York, 149 N. Y. 414, 44 N. E. 87; American v. Chicago, 143 Ill. 210; Board of Trade v. Nelson, 162 Ill. 431, 44 N. E. 743, 53 Am. St. 312; Belton v. Hatch, 109 N. Y. 593, 17 N. E. 225, 4 Am. St. 495. Of a contract by which one corporation bound itself to buy all its raw material from and sell all its manufactured products to another the court said: “We do not regard this contract as one in restraint of trade and, therefore,
The anti-trust statute does not affect a contract made by a seller of grain to sell to purchasers a certain amount of grain to be delivered in the future. Albers v. Spencer, 205, Mo. 105, 103 S. W. 523, 11 L. R. A. (N. S.) 1003. A contract to run for eight years, whereby an owner of a bed of fire clay agreed to erect a plant and operate it, and several corporations agreed to take a specified amount of the product daily at a fixed price — the first party agreeing not to operate a fire clay plant on any other land owned or controlled by him in the state, and the second party agreeing not to sell brick to any other parties, and the latter not to buy of any other party in the state, and not to enter into any combination or trust to limit the output of the plant is not invalid under the statute. After quoting the Illinois statute, Mr. Justice Wilkin said: “The object of these statutes is to prohibit the formation of trusts and combinations and remove all obstructions in restraint of' trade and free competition. It was not the purpose of either law to hinder or prohibit contracts on the part of corporations or individuals made to foster or increase trade or business. But a contract may incidentally restrain competition or trade without violating the statutes if its chief purpose, is to promote and increase the business of those who enter into it.” The contract was regarded as one in partial restraint of trade only. Southern v. Garden, 223 Ill. 616, 621, 79 N. E. 313.
In Yazoo v. Searles, 85 Miss. 520, 37 South. 939, 68 L. R. A. 715, a car service association was held not to be a trust within the meaning of the statute of that state. This decision contains a very full discussion of the general subject. It was said that, in construing anti-trust statutes, the nature of the business contemplated by the contract and the tendency of the contract as affecting the public should be considered, rather than the interests of the parties to the particular contract. But the design of the legislature was to protect the public, not to unnecessarily restrict the transacting of business by either corporations
A contract for the sale of the entire output of sash weights of a particular foundry at a specified price, and obligating the seller to withdraw a former lower price, is not invalid. Combinations between individuals or firms for the regulation of prices or competition in business are held not to be monopolies and in restraint of trade so long as they are reasonable and do not include all the commodity or trade, or to create such restrictions as to materially affect the freedom of commerce. Over v. Byram, 37 Ind. App. 452, 77 N. E. 302, 117 Am. St. 327; Herriman v. Menzies, 115 Cal. 16, 44 Pac. 660, 46 Pac. 730, 35 L. R. A. 318, 56 Am. St. 81.
6. Where the statute prohibits a specific thing, that fact, of course, furnishes an all-sufficient reason for the decision, and, as the state statutes generally go more into detail than the federal statutes, the state decisions are less controlled by general considerations. When the legality of the particular act is to be tested by whether it violates general statutory prohibitions upon restraints of trade or commerce, the courts give various reasons for their conclusions. Different forms of expression are used; but, when reduced to the lowest terms, it seems that if any one thing may be said to be the test, it is the effect upon competition. Combinations are not per se illegal, any more than are contracts, agreements, and understandings generally; but, when the purpose of either is to destroy competition in trade or commerce, the particular transaction falls within the prohibitions of the anti-trust statute. The acts which are specifically forbidden by tne statute are contrary to the public policy of the state because they are thus forbidden (Stewart v. Erie & W. Transp. Co., 17 Minn. 348 [372]), and the effect upon competition furnishes a reasonably accurate test for cases which arise under the general language of the statute.
But it does not follow that every contract or combination which in any degree tends to restrict competition is illegal. So strict a rule, would invalidate innumerable ordinary business transactions, which are unobjectionable and necessary that business shall not completely stagnate. As said in Hopkins v. U. S., 171 U. S. 578, 592, 600, 19 Sup. Ct. 40, 43 L. Ed. 290: “The contract condemned by the statute is one whose direct and immediate effect is a restraint * * * of commerce. * * * The act * * * 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.” The anti-trust statutes were never designed to forbid such transactions, and it has been universally held that contracts and combinations which tend to promote business, and which only remotely, incidentally, and indirectly restrain competition, are not forbidden. If the necessary effect of the combination is to stifle or to directly or necessarily restrict free competition, it is under the ban of the law, whatever may have been the intention of the parties. But if “it promotes or but incidentally or indirectly restricts competition, while its main purpose and chief effect, are to foster the trade and to increase the business of those who make and operate it, then it is not a contract, combination, or conspiracy in restraint of trade, within the true interpretation of this act, and it is not subject to its denunciation.” Whitwell v. Continental Tobacco Co., 125 Fed. 454, 458, 60 C. C. A. 290, 64 L. R. A. 689; Hopkins v. U. S., 171 U. S. 578, 19 Sup. Ct. 40, 43 L. Ed. 290; Anderson v. U. S., 171 U. S. 604, 19 Sup. Ct. 50, 43 L. Ed. 300; U. S. v. Joint Traffic Assn., 171 U. S. 505, 19 Sup. Ct. 25, 43 L. Ed. 259; Addyston Pipe & Steel Co. v. U. S., 175 U. S. 211, 20 Sup. Ct. 96, 44 L. Ed. 136; Montague & Co. v. Lowry, 193 U. S. 38, 24 Sup. Ct. 307, 48 L. Ed. 608; Cincinnati, P., B. S. & P. Packet Co. v. Bay, 200 U. S. 179, 184, 26 Sup. Ct. 208, 50 L. Ed. 428; State v. Goodwill, 33 W. Va. 179, 10 S. E. 285, 6 L. R. A. 621, 25 Am. St. 863;
7. With these general principles in mind, we proceed to the consideration of the facts of the case at bar. It is reasonably clear that the purpose to be accomplished by rule 26 is not one which is forbidden by the anti-trust statute, and also that, even though it were within the scope of the statute, it is not illegal, because it does not destroy or restrict competition in the business of producing, buying, selling, or distributing any articles dealt in by the board of trade or its members. The requirement with reference to the rates on money advanced by the members and that relating to the division of commissions between members do not require any particular consideration. They clearly are not violations of the statute. The state’s case must rest upon the alleged illegality of that provision of the rule which requires members to charge uniform commissions for their services in making sales for their customers. The other provisions are incidental to this, and are designed to secure its observance and enforcement. The board of trade is a combination of men engaged in the same business who have bound themselves by contract and agreement to charge uniform rates for personal services. It is the established law of this state that a man, or any number of men, may, unless under contract obligations, or engaged in an employment which charges them with a public duty, refuse to deal with any man or class of men, and that this right may be exercised singly or in combination with others. In Bohn Mnfg. Co. v. Hollis, 54 Minn. 223, 55 N. W. 1119, 21 L. R. A. 337, 40 Am. St. 235, 319, the court said: “The right which one man may exercise singly, many, after consultation, may agree to exercise jointly, and make simultaneous declaration of their choice. This has been repeatedly held as to associations or uniqns of workmen, and associations of men in other occupations or lines of business must be governed by the same principles.” In Ertz v. Produce Exchange, 79 Minn. 140, 143, 81 N. W. 737, 48 L. R. A. 90, 79 Am. St. 433, the court said that “within proper limits, it is both lawful and commendable for men to corn
The right of laboring men to combine for the purpose of regulating their wages can no longer be seriously denied. Five years after the enactment of the Minnesota anti-trust statute this court, in Gray v. Building Trades Council, 91 Minn. 171, 179, 97 N. W. 663, 63 L. R. A. 753, 103 Am. St. 477, said: “A strike for the purpose of securing better wages or otherwise bettering the condition of the strikers is not unlawful, though the result thereof is a combination between the striking employees, and results incidentally in the injury of others.” In Jacobs v. Cohen, 183 N. Y. 207, 212, 76 N. E. 5, 2 L. R. A. (N. S.) 292, 111 Am. St. 730, it was held that laboring men have the right “to combine and to co-operate for the promotion of such ends as the increase of wages. * * * Their combination is lawful, when it does not extend so far as to inflict injury upon others, or to oppress and crush them by excluding them from all employment, unless gained through joining the labor organization, or trades union.” The right to form a combination for the purpose of fixing wages is now thoroughly established, and numerous cases sustaining it will be found cited in 24 Cyc. 819. A rule of law applicable to men who work with their hands should, when no other principle of public policy contravenes, be equally applicable, when the general purpose to be accomplished is the same, to men whose work is more intellectual.
If a combination for the purpose of regulating what one class of men in the community shall receive for their personal services is valid, because not within the scope of the anti-trust statute, it cannot be that any combination for the same purpose is prohibited because of the character or description of the individuals who enter into the combination. The classification must be along the line of purposes, and not persons. In the light of the history of legislation relating to agreements and combinations to fix and regulate wages, the often-declared rule of public policy with reference thereto, the purposes for which combinations are specifically forbidden by the statute, and the fact that such combinations affect production and prices of commodities but indirectly, we are of the opinion that combinations to fix and regulate the prices which shall be charged for wages and other forms of personal service are not within the prohibitions of our statute. Eabor, wheth
In the recent case of Rohlf v. Kasemeier (Iowa) 118 N. W. 276, 278, it was held that under the Iowa statute, which prohibits combination to regulate the price of any “article of merchandise, commodity,” etc., a union of laborers or professional men — in this instance physicians — for the purpose of advancing wages or charges is not unlawful. “If the contention of appellant be correct,” said Deemer, J.,' “the statute covers all kinds of personal labor, both skilled and unskilled, under the term 'commodity.’ Indeed, this is the broad claim made by counsel. Now, whilst there is a class of political economists who treat labor as so much merchandise, the wage being regulated simply by supply and demand, there is another class, which, taking account of the personal equation, sees in it something more than a commodity, and refuses to subscribe to the doctrine that supply and demand alone regulate the price. This latter class of economists refuses to accept the doctrine that a man is rich because he has stored away within him many days’ work, and are convinced that his necessities, quite as often as the demand for his labor, fix the stipend which he is to receive. In other words, the laborer, skilled or unskilled, is not regarded as standing on an equality with him who barters in goods and merchandise. * * * The only ground upon which appellant can stand with any show of plausibility is that labor is a commodity to be bought, sold, or produced, as merchandise. This is a strained and unnatural construction, and gives to the word 'commodity’ a meaning which is perhaps permissible, but is not the commonly accepted one. * * * It seems to be the almost universal holding that it is no crime for any number of persons without an unlawful object in view to associate themselves together, and agree that they will not work for or deal with certain classes of men, or work under a certain price or without certain conditions.
It is possible that under some of the state statutes a combination to fix and regulate the value of wages or personal service is invalid, because included within the specific prohibitions of the statute. But the statutes almost without exception are directed to combinations which affect the production or price of some useful commodity, and it is very ■clear that personal services are not included under such designations. The Michigan statute of 1899 was broader than the Minnesota statute, particularly in that it denounced combinations of capital, skill, or arts. But in Hunt v. Riverside, 140 Mich. 538, 549, 104 N. W. 40, 112 Am. St. 420, the distinction between wages and articles which are produced, bought, and sold in the market was clearly recognized. It was held that, while agreements between plumbers fixing the price, at which they would sell plumbers’ supplies were illegal, agreements fixing and regulating the price of labor employed in executing lawful contracts were not forbidden. “If that statute” said the court, “forbids such agreements, it follows that it forbids all agreements fixing and regulating the price of labor, and that associations, whether of employees or employers, when endeavoring to fix and regulate the price of labor, are engaged in a criminal undertaking. Does that statute forbid such agreements ? In general, it may be said that the statute forbids certain contracts and certain defined trusts. An agreement fixing and regulating the price' of labor is not one of these contracts, nor one of these trusts. See Cleland v. Anderson, 66 Neb. 258. If it may be said that an agreement fixing the price of labor violates the statute when it forms part of an undertaking which the statute forbids, it must also be said that it does not violate the statute unless it does form part of ■some undertaking forbidden by the statute.”
There has been some difference of opinion as to whether insurance is an article of commerce or a commodity within the meaning of such statutes. In State v. Phipps, 50 Kan. 609, 31 Pac. 1097, 18 L. R. A. 657, 34 Am. St. 152, and Beechley v. Mulville, 102 Iowa, 602, 70 N. W. 107, 71 N. W. 428, 63 Am. St. 479, it was held to be a “commodity.” Some statutes expressly specify contracts fixing the rates to be paid for insurance and the commissions to be charged by insurance
More v. Bennett, 140 Ill. 69, 29 N. E. 888, 15 L. R. A. 361, 33 Am. St. 216, seems to support the contention that a combination to fix the rate to be charged for personal services is illegal. That case grew out of an attempt of the law stenographers of the city of Chicago to fix the prices at which they would work. It is criticised in Queen v. State, supra, and the cases cited by the court do not seem to be applicable upon the facts. As a matter of fact, such stenographers furnish more than their personal services, and the compensation is measured by the quantity of the product of their labors. Thus in the ordinary case of a court stenographer, who furnished a transcript of evidence, the party ordering it pays for what he receives at a fixed price per folio. The proposition under consideration in More v. Bennett did not include ordinary stenographers who work by the day or month, and
This.conclusion is not inconsistent with the decision of the supreme court of the United States that the Sherman anti-trust law applies to combinations of workingmen as well as capitalists, or with the cases which have held certain anti-trust statutes unconstitutional because they exempted certain classes of people from their operation. The right of proper classification is conceded, and the statute must apply equally to all members of the class; but our statute is directed to com,binations for certain purposes, and we hold that combinations and agreements, the sole and only purpose of which is to fix the charges that shall be made for personal services, are not within the prohibitions of the statute.
8. But, if it should be conceded that the agreement or combination effected by rule 26 is within the g-eneral scope and purpose of the antitrust statute, it would not violate the statute because it does not create a monopoly, and its direct and necessary tendency is neither to restrain trade by preventing competition in the business of buying and selling grain on commission, nor to limit, fix, control, maintain, or regulate the price or production of any article of trade, manufacture, or use bought and sold within the state, nor to prevent or limit competition in the purchase and sale thereof. As already stated, the board of trade neither buys nor sells grain. The members act as the agents of the producers and purchasers of the grain, and the regulation of their commissions for such services can have no appreciable, effect upon either the production or the price of the grain. It is a fixed charge, which must be paid, and the price which the producer obtains for the grain may be affected indirectly thereby. But the question is whether the production or price is directly or to any appreciable extent controlled or regulated by the rule which makes the charge uniform, instead of variable — definite and known, instead of uncertain and unknown. So long as the rate of commission is reasonable, as it is conceded to be in this instance, it must be for the benefit of the producer to know in advance what it will cost in commission to have his grain sold. A rule which determines the handling charges, and makes the charge the same per bushel to the farmer who ships one hundred sacks and. the
It is common knowledge that competition between commission men for the business of the producers is in fact strong, and success in getting the business depends, not upon offering to transact it for less than the uniform rate of commission, but upon the skill and facilities possessed for obtaining the highest price for the grain from the elevator and mill men who are generally the purchasers. There is no fixed price at which sales must be made. If A. can secure a cent a bushel more for B.’s grain than can C. or any other commission man, he will get the business, and the producer who has selected him to make the sale will get the benefit of his superior skill and energy. Competition of this character exists on all boards of trade and chambers of commerce, and it is inconceivable that a rule which requires all the commission men who are members of the board or chamber to charge the same rate of commission for the same service can materially affect or control either the production of grain or the price at which it sells. Of course, in a remote and indirect way, every charge and item of expense which attaches to the marketing of grain or other products affects to some extent the prices received by the producers and paid by the ultimate purchaser. But contracts and agreements for certain and uniform charges, which are for the benefit of all and operate only indirectly on production and prices, are not within the prohibitions of the statute.
The purpose and effect of this rule are not to stifle competition, but to protect the members of the board, and foster their business and trade, and prevent it from becoming demoralized to the injury of all parties, including the consumer. The propriety of such rules, indirectly, at least, received the approval of the supreme court of the United States in Anderson v. U. S., 171 U. S. 604, 616, 19 Sup. Ct. 50, 43 L. Ed. 300, where Mr. Justice Beckham said: “From very early times it has been the custom for men engaged in the occupation of buying
We think the same statement may be made with reference to the rules of the Duluth Board of Trade in their relation to intrastate trade and commerce. In a recent text-book written by one of the judges who decided the case of U. S. v. American Tobacco Co. (C. C.) 164 Fed. 700, which makes the restriction of competition conclusive, it is saicf that, “in order to come within the provisions of the federal statute, the direct effect of a combination must be in restraint of interstate commerce,” and “that a voluntary association or 'exchange’ formed by dealers in articles of a similar nature in a particular locality for the purpose of fairly regulating the methods of conducting business and establishing a general headquarters, and the by-laws of which provide rules for fair dealing among the members, but which exercises no control over prices or production, is not in contravention of the statute. Neither the object nor consequence of such an association is to suppress competition and its effect upon interstate commerce, if any, is remote.” Noyes, Intercorp. Rel. (2d Ed.) § 395.
Anderson v. U. S., 171 U. S. 604, 19 Sup. Ct. 50, 43 L. Ed. 300, and Hopkins v. U. S., 171 U. S. 578, 19 Sup. Ct. 40, 43 L. Ed. 290, while not exactly in point, tend to sustain the respondent’s views as to the legality of this rule of the Duluth Board of Trade. The case
A somewhat extended investigation of the law and careful consideration of the facts, of this case have convinced us that the Duluth Board of Trade has not violated the Minnesota statute, and that the decision of the learned trial judge was correct.
The judgment is therefore affirmed.
