The subject-matter of the jurisdiction of equity being the protection of private property and of civil rights, courts of equity will not interfere for the punishment of merely criminal or immoral acts unconnected with violations of private right.

That property and civil rights are equally within the protection of a court of equity is so obvious from these citations that it is hardly worth discussion. If further authorities upon this point were necessary, it can be settled adequately by the case of Texas v. Patterson (14 Tex., Civil Appeal Reports, p. 465), quoting from page 469:

It is only when property or civil rights are involved and irreparable injury to such rights is threatened or is about to be committed, for which no adequate remedy exists at law, that courts of equity will interfere by injunction for the purpose of protecting such rights.

law.

It is to be noted in this connection that Mr. Justice Gould, of the supreme court of the District of Columbia, in his very able and courageous opinion in the Buck Stove and Range case, expressly decided upon all the authorities that the right to do business was property and entitled to the protection of the I have no occasion to encumber this speech with a detailed reference to the authorities sustaining the proposition that the right to do business is property. That whole question was exhaustively investigated and thoroughly covered by the very able report of the Subcommittee of the Judiciary of the Fiftyninth Congress, submitted by the gentleman from Massachusetts [Mr. TIRRELL] and the gentleman from Illinois [Mr. STERLING], with a very clear and perspicuous statement of the views of the gentleman from Georgia [Mr. BRANTLEY], all three of whom will be recognized as lawyers of ability and character, and their report I quote in the appendix.

Under these authorities there can be no question that under the law of the land, as it exists to-day, the right to do business is property and entitled to the protection of the law.

I think it is entirely safe to say that so long as the provisions of the fifth amendment to the Constitution of the United States which expressly provides that no "person shall be deprived of life, liberty, or property without due process of law," remains embedded therein, a statute that undertakes to destroy the right to do business as property will without any hesitation be held by the Supreme Court to be void and unconstitutional, as a deprivation of property without due process of law.

That portion of the Pearre bill which provides that "for the purpose of this act no right to continue the relation of employer or employee or to assume to create any such relation with any particular person or persons or at all" shall be "treated as property or as constituting a property right," is subject to exactly the same constitutional objection under the authority of the case of Adair v. U. S. (208 U. S., 172), where the court said:

The first inquiry is whether the part of the tenth section of the act of 1898, upon which the first count of the indictment was based, is repugnant to the fifth amendment to the Constitution, declaring that no person shall be deprived of liberty or property without due process of law. In our opinion that section in the particular mentioned is an invasion of the personal liberty, as well as of the right of property, guaranteed by that amendment. Such liberty and right embraces the right to make contracts for the purchase of the labor of others and equally the right to make contracts for the sale of one's own labor.

* Without stopping to consider what would have been the rights of the railroad company under the fifth amendment, had it been indicted under the act of Congress, it is sufficient in this case to say, that as agent of the railroad company, and as such responsible for the conduct of the business of one of its departments, it was the defendant Adair's right-and that right inhered in his personal liberty, and was also a right of property to serve his employer as best he could so long as he did nothing that was reasonably forbidden by law as injurious to public interests. It was the right of the defendant to prescribe the terms upon which the services of Coppage

XLII-AP- -35

as he chose, an employee of the railroad company upon the terms offered to him. Mr. Cooley, in his Treatise on Torts (page 278) well says: "It is a part of every man's civil rights that he be left at liberty to refuse business relations with any person whomsoever, whether the refusal rests upon reason or is the result of whim, caprice, prejudice, or malice. With his reasons neither the public nor third persons have any legal concern. It is also his right to have business relations with anyone with whom he can make contracts, and if he is wrongfully deprived of this right by others, he is entitled to redress."

Section 2 of this bill is a deliberate attempt to exempt labor organizations from the operations of the Sherman antitrust law, although not so stated in terms, no other construction can be placed on the language used and this is open to the criticism which I have already made upon that proposition.

The fact that this legislation would be a flat violation of the fifth amendment is a sufficient answer thereto. Its practical application, as explained by its distinguished author, is so astounding in its effect upon the business interests of the country as to call for special comment.

I have had occasion during the last year or two to discuss in great detail the provisions of the Pearre bill and express my position in relation thereto. In one of the speeches in which I engaged in that discussion I took occasion to illustrate the operation of the legislation, which undertook to deprive the owner of a piece of property of the protection of the law the moment he began to do business with it. This was an address that I delivered in Battle Creek, Mich., before the Citizens' Industrial Association. For the purpose of showing the application of this legislation I illustrated it by calling attention to the fact that the plant of the Postum Cereal Company, vast and extensive in its character, costing probably a million and a half or more of money, consisting of buildings with the machinery contained therein, was constructed and operated solely for the purpose of manufacturing the products of that company. I called attention to the fact that these buildings, with the machinery contained therein, were entitled to and would receive the protection of the law, notwithstanding the fact that this bill might be enacted by Congress; that the bill conceded that the buildings were physical property, and that the machinery was of the same character: and, if a combination or conspiracy were formed for the purpose of destroying either the buildings or their contents by irresponsible parties, that a court of equity would, notwithstanding the passage of the bill, issue its restraining order to prevent their destruction and protect the owner in the enjoyment of his property.

Then I called attention to the fact that if this bill became a law and the owner saw fit to use these buildings and their contents for the purpose of carrying on the business for which and only for which they were constructed and maintained, the moment he engaged in that enterprise, engaged in business, he would cease to have the protection of the law; and although parties might combine and conspire to absolutely deprive him of the power and the right to engage in business and to use his property for the only purpose for which it was constructed, they could do so without let or hindrance, and he would be without the protection of the law.

Mr. Spelling, before my committee, realizing perhaps some of the embarrassments suggested by this proposition, undertook to make an answer thereto, and the answer is contained in the hearing before the committee from which I now quote. Mr. Spelling had frequently during the hearing alluded to the speech that I made at Battle Creek, and I may say now, in order to give a correct history of this legislation and the efforts of Mr. Spelling to procure favorable action thereon, that he called my attention, as chairman of the subcommittee having this particular Pearre bill in charge, to the fact that I had stated in the Battle Creek speech that that particular bill should not, if I had the power, ever become a law. I stated to him that he was correctly stating my attitude, that the assertion made in that speech was made after due deliberation, that it was my deliberate intention and purpose, and, if I had the power, under no circumstances would legislation of that sort ever become a part of the law.

After having had his attention called to the speech in that manner and the illustration made by me of the practical operation of this proposed legislation, he made this answer, and I quote verbatim from the hearings:

The ACTING CHAIRMAN. How can a man use property that is created for doing a certain business without engaging in the business and carrying it on?

Mr. SPELLING. I will tell you how.

The ACTING CHAIRMAN. That is, how can he use the property created for that purpose without engaging in the purpose?

Mr. SPELLING. Had you not better repeat that? I did not hear it. The ACTING CHAIRMAN. I say, how can a man use property for the purposes for which it is created and owned without engaging in the purpose; and if that is business, how can he do it without engaging in business?

Mr. SPELLING. Now, Mr. LITTLEFIELD, your corporation, or the one you are speaking about, is a manufacturing company, is it not? Mr. LITTLEFIELD. Surely.

Mr. SPELLING. Suppose that manufacturing business becomes unprofitable and it quits, whether on account of strikes or for some other reason, and ceases to do business?

The ACTING CHAIRMAN. That does not even approach an answer to the question.

Mr. SPELLING. Well, let me answer, will you, please?

The ACTING CHAIRMAN. Go ahead; I thought you had answered it. Mr. SPELLING. It ceases to do business. There can not, then, be any interference with its right to do business. It can still use that property for some other purpose-for a farm or for a cow house or for a residence; and it can use the machinery for anything it pleases. It can use it for ballast in a lake steamer. So it still has left the right of user and possession, which is a right of property, but the right to that business is done. That is personal.

The ACTING CHAIRMAN. That is the only answer there is to that proposition; is it?

Mr. SPELLING. That is all that I have.

The ACTING CHAIRMAN, After due and mature consideration, having had several months to think it over. (P. 16.)

In order to make this perfectly certain, the acting chairman repeated the proposition at a little later stage of the hearing: The ACTING CHAIRMAN. I understand, to go back to your illustration a little bit further, that while it might be well that this large amount of property might be aggregated for the purpose of doing a particular business, the law would not protect a man in the use of the property in that particular business, but it would protect the property; so that if he could not use it in that business, it might be used, as you suggest, as ballast for a lake steamer. That is your conception of the practical condition when you get down to it. It would protect the property because the things per se, the physical structures, could be left there and could be used for horse sheds or ballast for a lake steamer; but it would not go so far as to protect him in the use of that particular property in any special business he wanted to devote it to?

Mr. SPELLING. It is not within my plan to go over that again. The ACTING CHAIRMAN. I understood that to be your illustration, that the argument practically comes down to that.

Mr. SPELLING. I say that there is a very clear distinction between the right to do business and the right to use and possess propertythat is, the property right of use and possession of property. (P. 18.)

So that we have as the practical result of the legislation invented by Mr. Spelling, and insisted on by the president of the American Federation of Labor, and in default of the passage of which he is now traveling about the country breathing out threatenings and slaughter against every man who opposes his will, a proposition which simply comes down to this: With the passage of this bill the right to do business as property is destroyed; and although the right to do business may be gone the buildings and machinery constructed for that purpose will remain and may still be used by the owners thereof for cow barns or for ballast for lake steamers.

It must be a profound comfort and a source of great consolation for the business interests of the country to feel assured that, although they may be driven out of business with impunity and without any right to legal redress therefor, they will still retain the inalienable constitutional right to use their buildings for cow barns and the material contained therein for ballast for steamers.

This bill was one of the questions thoroughly discussed by me in my last campaign. I declared in every speech I made that under no circumstances should I give my assent to any legislation that undertook to outlaw the right to do business or undertook to destroy it as a property right. At that time I did not have these suggestions made by Mr. Spelling, indicating his conception and his appreciation of the condition into which the interests of eighty-seven millions of people would be plunged if the American Federation of Labor could get the American Congress to pass this bill, deliberately outlawing the right to do business as property.

The issues tendered by the leaders of the labor organizations are, shall the boycott and blacklist be legalized or penalized, and shall the right to do business be outlawed or shall it be maintained. On these issues I am unalterably against the boycott and black list, and I stand unqualifiedly for the main tenance of the right to do business and its protection by the law. These issues transcend in their vital importance all the issues that now divide the two great political parties. Any candidate, from the Presidency down, that either truckles, or panders, to such a propaganda in either the Democratic or Republican party deserves to go down in overwhelming defeat. If we, as representatives of the people, all discharge our duties like men and patriots, we shall be able to transmit to our children and to our children's children the great heritage we have received, and long after the Republican party with its glorious record of progress and achievement shall have passed away, and the Democratic party, with its Jeffersons, Jacksons, Tildens, Clevelands, and Bryans, shall have become nothing but a memory, the constitutional government of a free people will continue to guarantee life, liberty, and the pursuit of happiness to countless millions yet unborn.

CONCLUSION.

It may perhaps be well for me to state here, because I have now reached the end of the discussion of the legislation demanded by the labor organizations, that the provisions of the Gilbert bill, to which I called attention in the early part of this address, practically authorizing conspiracies to threaten to commit crime and exempting labor organizations from the operation of the Sherman antitrust law, making it lawful for them to do what other people were denounced as criminals for doing, and this Pearre bill, destroying the right to do business as property and outlawing it, were denounced by me in every speech I made in my campaign. I challenged the gentlemen assailing me in that campaign to even read those two bills in the speeches they were making assailing me for my attitude in relation thereto. This is the head and front of my offending. I have no controversy with labor organizations as such nor any controversy with labor leaders except so far as controversies with them arise from their insistence upon legislation that in my judgment I deem unwise and vicious.

These two pieces of legislation were the great issues in my campaign; and I take great pleasure in saying that in no instance have I ever been able to find a member of the American Federation of Labor, or of any labor union, that undertook at any time when he thoroughly understood the situation, and had the effect of these two bills explained to him, to disapprove or criticise my attitude. On the contrary, I have never yet found a member of that organization, or a laboring man, who has not heartily indorsed my attitude in relation thereto when understood.

I am in perfect sympathy with the organization of labor for any lawful purpose. I think they are equally as legitimate as organizations of capital. I fully appreciate the fact that organizations of labor have been able to produce lasting, beneficial results to wage-earners. I fully approve of all of their activities and of all their purposes so long as they are confined within the limits of law. When a labor organization steps beyond the pale of the law and undertakes to infringe the right of either the man that labors or the man that furnishes employment to labor, then I part company with them.

I can not, I will not give my assent to any legislation that will operate in their favor as a class and against the rest of the community.

I can not, I will not give my assent to any legislation that will give to them special privileges and exempt them from the operation of criminal legislation that applies to all others, thus depriving other persons of the equal protection of the law.

It ill becomes them, in the issue of the Federationist to which I have referred, while asking for the constitutional right of equality before the law, to insist upon the enactment of legislation, under the threat of their supreme displeasure, that confers upon them rights and privileges enjoyed and possessed by no other class of persons, that will turn over to them, without let or hindrance, without the right of courts to regulate or control, the whole interstate transportation of the country, and that would legalize and authorize the prosecution of interstate boycotts throughout the length and breadth of the land. I gave in my last campaign my solemn promise to my constituents that no legislation of this character should, if I could prevent it, ever become a part of the law of the land. I shall return to them the commission that they gave me, unstained and untarnished by any taint of cowardice or demagogery on this proposition. There is no power on earth, either Executive or otherwise, there is no exigency, political or otherwise, that can lead me by the slightest degree to vary from the faithful performance of that promise. I shall stand by it without variableness, neither shadow that is cast by turning.

Finally, brethren-and if I should speak from the fullness of my heart, inspired by the universally kind and appreciative sentiments that have been expressed to me on both sides of the House in connection with my withdrawal from public life, I could properly say, Beloved brethren, applying it, without distinction or discrimination, to both my Democratic and Republican friends-finally, brethren, may I be allowed to say that the results in my campaign are, in my judgment, a sufficient warrant for the assertion that, notwithstanding the threats of organized labor, no Member upon this floor need have any hesitation in standing upon his own feet, wearing his own hat, and discharging his duty in the fear of the everliving God, without the fear of man.

Before I call attention in detail to the results, I wish to briefly indicate the conditions that confronted me in the campaign of 1906. In 1904 the Republicans in my State elected Governor Cobb, who, among other things, gave his solemn promise in the campaign to the people of the State that if

elected governor he would do his best to faithfully and impartially enforce the prohibitory law.

Strange as it may seem, he being a man of the highest character and of perfect integrity, as well as of great ability and unusual accomplishments, labored under the impression that this promise, thus made in his campaign, was equivalent to the giving of a bond by a business man and required full and complete fulfillment, and from that time on until now he has made an earnest, vigorous, and sincere effort to make good this promise to the people of Maine.

He was my warm personal friend, he lives in the town where I live, and I presented his name to the convention. The campaign that resulted in his nomination was one of unusual and extraordinary bitterness and rancor, and upon his election and ever since every public act that he has done that has created any friction or resulted in any disturbance has, as a rule, been, with great zeal and enthusiasm, charged up to me personally, upon the ground that in some way, directly or indirectly, I was responsible therefor, although I have had no more connection with the personal acts of the governor in the discharge of his duty, fully as I approve of them, than has any other Member of this House.

Politically, and entirely unrelated to labor legislation, I have been subjected to the continuous assaults of the leading Republican newspaper in my section, printed in my district, based very largely on gross misrepresentations of my public conduct, a paper that is taken very largely by many Republicans who take no other paper.

There was in 1906 a very vigorous agitation in connection with the resubmission of the prohibitory amendment of the constitution of the State of Maine, and this agitation was more acute and intense probably in the largest city in my district than in any other place in the State of Maine.

Fortunately or unfortunately for me, as the case may be, my attitude in connection with the question of prohibition is probably as well or better known than my attitude in connection with any other public question that concerns the people of that State. I became a temperance man and a believer in the prohibitory law long before I occupied any office. I did not accumulate those opinions for the purpose of obtaining office, and I have never modified or changed them for the purpose of retaining it. It is perhaps not invidious to say that I was as conspicuous as any other man in the State in connection with this agitation, and so far as that tended to embarrass the political situation it would embarrass me to a much greater degree, except possibly the governor, than any other man running for public office.

There was practically no campaign in the other three Congressional districts of the State. The three other Members of Congress from the State of Maine are well known to you as men of character, integrity, industry, and as capable, faithful public servants. I suppose that every one of them may properly be said to be, in the popular signification of the term, very much more effective and successful vote getters than I.

I had opposed to me in the campaign as candidate one of the ablest Democratic campaigners in the State of Maine, and probably as able a campaigner as can be found anywhere in the Democratic party throughout the country.

Under these conditions, independently of the assaults made upon me by the American Federation of Labor on account of my attitude in connection with the legislation which I have just been discussing, I stood to lose in my district probably a larger number of votes than any other Member of Congress could legitimately expect to lose.

It should also be stated that the assistance I received in my campaign from men outside the State was four speeches from the grand old hero who presides over the House, one magnificent speech by Secretary of War Taft, and two speeches by the brilliant gentleman from Michigan [Mr. HAMILTON]. With these exceptions, the campaign was fought by me from the beginning to the end, so far as outside assistance upon the stump was concerned, absolutely single-handed and alone.

Mr. Gompers made seven or eight speeches in my district, viciously and bitterly attacking, and had scores of his representatives making a personal canvass during the campaign.

As the result of this campaign the plurality of the governor, which was 26,816 in 1904, was reduced to 8,064 in 1906, the governor losing on his plurality in 1906, as compared with 1904, 18,752.

Mr. ALLEN, in the First District, had his plurality reduced in the whole State from 4,981 to 1,749, or a loss of 3,232.

My plurality was reduced from 5,391 to 1,362, a loss of 4,029, losing 797 more than Mr. ALLEN.

Mr. BURLEIGH's plurality was reduced from 6,863 in 1904 to 1,791 in 1906, or a loss of 5,072, more than 1,000 more than my loss.

Mr. POWERS's plurality was reduced from 8,901 in 1904 to 3,574 in 1906, a loss of 5,327, nearly 1,300 more than my loss. The governor lost in my district on his vote in 1906, as compared with 1904, 1.6 per cent; I lost 2.4 per cent; Mr. ALLEN lost 7 per cent; Mr. BURLEIGH lost 10 per cent, and Mr. POWERS lost 15 per cent.

Mr. POWERS's total Republican vote in 1904 was 20,501; my total vote was 19,176. My vote in 1906 was 18,708, from 1,500 to 2,000 more than the vote cast for any other Congressman.

It should be borne in mind that 1906 was what is known as an off year, and is being compared with the Presidential year 1904. In 1904 I received only 19,176, while in 1906 I received 18,708, a loss, as compared with 1904, of only 468. My plurality in my district exceeded that of the governor by 383.

In every speech that I made in this campaign I called the attention of my constituents to the fact that the country little knew. or little cared what became of the Republican candidate for Congress, but that they were, in my judgment, vitally interested in ascertaining what the opinion of the voters of the second district of Maine was upon the great questions which I had presented to them in every speech for their consideration. Every intelligent voter in my district knew that my personal interest would be conserved by my defeat at the polls and my relegation to private life; that I was holding the office and had always held it at a financial sacrifice, and, so far as my personal interests were concerned, at a loss to myself.

In every address I made they were specifically requested to register their verdict upon the issues presented to them by me. In the light of the results, I feel that I have a right to say that I am proud of my constituency and the manner in which they acquitted themselves under these circumstances and the verdict they rendered upon the issues before them.

With reference to this legislation and the action that should be taken thereon, I know not what course others may take, and I think I may be pardoned for going so far as to say I care not what course others may take; but, as for me, I propose to base my action upon considerations which I believe to be elemental and fundamental. So far as I have the power to control or shape legislation, the legislation shall be upon the principles of the equality of all before the law-the high and the low; the rich and the poor; the weak and the strong; the oppressor and the oppressed; the wage-earner and the wage payer, friend and foe, shall receive from me the application of the same universally operating principles of fundamental eternal justice. Whenever I fail to be actuated by these principles, which I believe to be essential to the perpetuation of the constitutional government of a free people, may "my tongue cleave to the roof of my mouth, my right hand forget its cunning," and may I be "anathema maranatha."

This was a proceeding in equity, begun by petition, filed by the Attorney-General on behalf of the United States, against six corporations engaged in the manufacture of cast-iron pipe, charging them with a combination and conspiracy in unlawful restraint of interstate commerce in such pipe, in violation of the so-called "Antitrust law," The defendants were the Addyston passed by Congress July 2, 1890. Pipe and Steel Company, of Cincinnati, Ohio; Dennis, Long & Co., of Louisville, Ky.; the Howard-Harrison Iron Company, of Bessemer, Ala.; the Anniston Pipe and Foundry Company, of Anniston, Ala.; the South Foundry and Pipe Works, of Chattanooga, Tenn. Pittsburg Pipe Works, of South Pittsburg, Tenn., and the Chattanooga The petition prayed

that all pipe sold and transported from one State to another, under the combination and conspiracy described therein, be forfeited to the petitioner, and be seized and confiscated in the manner provided by law, and that a decree be entered dissolving the unlawful conspiracy of defendants, and perpetually enjoining them from operating under the same, and from selling said cast-iron pipe in accordance therewith joint and separate demurrer to the petition, in so far as it prayed for to be transported from one State into another. The defendants filed a the confiscation of goods in transit, on the ground that such proceedings, under the antitrust act, are not to be had in a court of equity, but in a court of law. In addition to the demurrer, the defendants filed a joint and separate answer, in which they admitted the existence of an association between them for the purpose of avoiding the great losses they would otherwise sustain, due to ruinous competition between defendants, but denied that their association was in restraint of trade, State or interstate, or that it was organized to create a monopoly, and denied it was a violation of the antitrust act of Congress. Testimony in the form of affidavits was submitted by petitioner might be had thereon. and defendants, and, by stipulation, it was agreed that the final hearing Judge Clark, who presided in the circuit court, dismissed the petition on the merits. His opinion is reported in 78 Fed., 712.

From the minutes of the association, a copy of which was put in evidence by the petitioner, it appeared that prior to December 28, 1894, the Anniston Company, the Howard-Harrison Company, the Chattanooga Company, and the South Pittsburg Company had been associated as the Southern Associated Pipe Works. Upon that date the Addyston Company and Dennis Long & Co. were admitted to membership, and the following plan was then adopted:

TAFT, circuit judge, after stating the case as above, delivered the opinion of the court.

The first section of the act of Congress entitled "An act to protect trade and commerce against unlawful restraints and monopolies," passed July 2, 1890 (26 Stat., 209), declares illegal "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." The second section makes it a misdemeanor for any person to monopolize or attempt to monopolize. or combine or conspire with others to monopolize, any part of the trade or commerce among the several States. The fourth section of the act gives the circuit courts of the United States jurisdiction to hear and determine proceedings in equity brought by the district attorneys of the United States under the direction of the Attorney-General to restrain violations of the act.

Two questions are presented in this case for our decision: First, was the association of the defendants a contract, combination, or conspiracy in restraint of trade, as the terms are to be understood in the act? Second, was the trade thus restrained trade between the States?

The contention on behalf of defendants is that the association would have been valid at common law, and that the Federal antitrust law was not intended to reach any agreements that were not void and unenforceable at common law: It might be a sufficient answer to this contention to point to the decision of the Supreme Court of the United States in U. S. v. Trans-Missouri Freight Assn. (166 U. S., 290, 17 Sup. Ct., 540), in which it was held that contracts in restraint of interstate transportation were within the statute, whether the restraints would be regarded as reasonable at common law or not. It is suggested, however, that that case related to a quasi public employment necessarily under public control, and affecting public interests, and that a less stringent rule of construction applies to contracts restricting parties in sales of merchandise, which is purely a private business, having in it no element of a public or quasi public character. Whether or not there is substance in such a distinction-a question we do not decide it is certain that, if the contract of association which bound the defendants was void and unenforceable at the common law because in restraint of trade, it is within the inhibition of the statute if the trade it restrained was interstate. Contracts that were in unreasonable restraint of trade at common law were not unlawful in the sense of being criminal, or giving rise to a civil action for damages in favor of one prejudicially affected thereby, but were simply void and were not enforced by the courts. (Mogul Steamship Company บ. McGregor, Gow & Co. (1892), App. Cas., 25; Hornby v. Close, L. R., 2 Q. B., 153; Lord Campbell, C. J., in Hilton v. Eckersley, 6 El. and Bl. 47, 66; Hannon J., in Farrer v. Close, L. R. 4, Q. B., 602, 612.) The effect of the act of 1890 is to render such contracts unlawful in an affirmative or positive sense, and punishable as a misdemeanor, and to create a right of civil action for damages in favor of those injured thereby, and a civil remedy by injunction in favor of both private persons and the public against the execution of such contracts and the maintenance of such trade restraints.

The argument for defendants is that their contract of association was not and could not be a monopoly, because their aggregate tonnage capacity did not exceed 30 per cent of the total tonnage capacity of the country; that the restraints upon the members of the association. if restraints they could be called, did not embrace all the States, and were not unlimited in space; that such partial restraints were justified and upheld at common law, if reasonable, and only proportioned to the necessary protection of the parties; that in this case the partial restraints were reasonable, because without them each member would be subjected to ruinous competition by the other, and did not exceed in degree of stringency or scope what was necessary to protect the parties in securing prices for their product that were fair and reasonable to themselves and the public; that competition was not stifled by the association because the prices fixed by it had to be fixed with reference to the very active competition of pipe companies which were not members of the association, and which had more than double the defendants' capacity; that in this way the association only modified and restrained the evils of ruinous competition, while the public had all the benefit from competition which public policy demanded. From early times it was the policy of Englishmen to encourage trade in England, and to discourage those voluntary restraints which tradesmen were often induced to impose on themselves by contract. Courts recognized this public policy by refusing to enforce stipulations of this character. The objections to such restraints were mainly two. One was that by such contracts a man disabled himself from earning a livelihood, with the risk of becoming a public charge, and deprived the community of the benefits of his labor. The other was that such restraints tended to give to the covenantee, the beneficiary of such restraints, a monopoly of the trade, from which he had thus excluded one competitor, and by the same means might exclude others.

Chief Justice Parker, in 1711, in the leading case of Mitchell v. Reynolds (1 P. Wms., 181, 190), stated these objections, as follows:

First. The mischief which may arise from them (1) to the party by the loss of his livelihood and the subsistence of his family, (2) to the public by depriving it of an useful member. Another reason is the great abuses these voluntary restraints are liable to, as, for instance, from corporations who are perpetually laboring for exclusive advantages in trade, and to reduce it into as few hands as possible."

The reasons were stated somewhat more at length in Alger v. Thacher (19 Pick., 51, 54), in which the supreme judicial court of Massachusetts said:

The unreasonableness of contracts in restraint of trade and business is very apparent from several obvious considerations: (1) Such contracts injure the parties making them, because they diminish their means of procuring livelihoods and a competency for their families. They tempt improvident persons, for the sake of present gain, to deprive themselves of the power to make future acquisitions, and they expose such persons to imposition and oppression. (2) They tend to deprive the public of the services of men in the employment and capacities in which they may be most useful to the community as well as themselves. (3) They discourage industry and enterprise, and diminish the products of ingenuity and skill. (4) They prevent competition and enhance prices. (5) They expose the public to all the evils of monopoly, and this especially is applicable to wealthy companies and large corporations, who have the means, unless restrained by law, to exclude rivalry, monopolize business, and engross the market. Against evils like these wise laws protect individuals and the public by declaring all such contracts void."

The changed conditions under which men have ceased to be so entirely dependent for a livelihood on pursuing one trade have rendered the first and second considerations stated above less important to the community than they were in the seventeenth and eighteenth centuries, but the disposition to use every means to reduce competition and create

monopolies has grown so much of late that the fourth and fifth considerations mentioned in Alger v. Thacher have certainly lost nothing in weight in the present day, if we may judge from the statute here under consideration and similar legislation by the States.

The inhibition against restraints of trade at common law seems at first to have had no exception. See language of Justice Hall, Yearbook, 2 Hen. V., folio 5, pl. 26. After a time it became apparent to the people and the courts that it was in the interest of trade that certain covenants in restraint of trade should be enforced. It was of importance, as an incentive to industry and honest dealing in trade, that, after a man had built up a business with an extensive good will, he should be able to sell his business and good will to the best advantage, and he could not do so unless he could bind himself by an enforceable contract not to engage in the same business in such a way as to prevent injury to that which he was about to sell. It was equally for the good of the public and trade, when partners dissolved and one took the business, or they divided the business, that each partner might bind himself not to do anything in trade thereafter which would derogate for his grant of the interest conveyed to his former partner. Again, when two men became partners in a business, although their union might reduce competition, this effect was only an incident to the main purpose of a union of their capital, enterprise, and energy to carry on a successful business and one useful to the community. Restrictions in the articles of partnership upon the business activity of the members with a view of securing their entire effort in the common enterprise were, of course, only ancillary to the main end of the union, and were to be encouraged. Again, when one in business sold property with which the buyer might set up a rival business, it was certainly reasonable that the seller should be able to restrain the buyer from doing him any injury which, but for the sale, the buyer would be unable to inflict. This was not reducing competition, but was only securing the seller against an increase of competition of his own creating. Such an exception was necessary to promote the free purchase and sale of property. Again, it was of importance that business men and professional men should have every motive to employ the ablest assistants and to instruct them thoroughly; but they would naturally be reluctant to do so unless such assistants were able to bind themselves not to set up a rival business in the vicinity after learning the details and secrets of the business of their employers.

In a case of this last kind, Mallan v. May (11 Mees. & W., 652), Baron Parke said:

*

"Contracts for the partial restraint of trade are upheld not because they are advantageous to the individual with whom the contract is made and a sacrifice pro tanto of the rights of the community, but because it is for the benefit of the public at large that they should be enforced. Many of these partial restraints on trade are perfectly consistent with public convenience and the general interest and have been supported. Such is the case of the disposing of a shop in a particular place, with a contract on the part of the vender not to carry on a trade in the same place. It is, in effect, the sale of a good will and offers an encouragement to trade by allowing a party to dispose of all the fruits of his industry. And such is the class of cases of much more frequent occurrence, and to which this present case belongs, of a tradesman, manufacturer, or professional man taking a servant or clerk into his service, with a contract that he will not carry on the same trade or profession within certain limits. *** In such a case the public derives an advantage in the unrestrained choice which such a stipulation gives to the employer of able assistants, and the security it affords that the master will not withhold from the servant instruction in the secrets of his trade, and the communication of his own skill and experience, from the fear of his afterwards having a rival in the same business." For the reasons given, then, covenants in partial restraint of trade are generally upheld as valid when they are agreements (1) by the seller of property or business not to compete with the buyer in such a way as to derogate from the value of the property or business sold; (2) by a retiring partner not to compete with the firm; (3) by a partner pending the partnership not to do anything to interfere, by competition or otherwise, with the business of the firm: (4) by the buyer of property not to use the same in competition with the business retained by the seller, and (5) by an assistant, servant, or agent not to compete with his master or employer after the expiration of his time of service. Before such agreements are upheld, however, the court must find that the restraints attempted thereby are reasonably necessary (1, 2, and 3) to the enjoyment by the buyer of the property, good will, or interest in the partnership bought; or (4) to the legitimate ends of the existing partnership; or (5) to the prevention of possible injury to the business of the seller from use by the buyer of the thing sold; or (6) to protec tion from the danger of loss to the employer's business caused by the unjust use on the part of the employee of the confidential knowledge acquired in such business. Under the first class come the cases of Mitchell v. Reynolds, 1 P. Wms., 181; Fowle v. Parke, 131 U. S.. 88, 9 Sup. Ct., 658; Nordenfeldt v. Maxim Nordenfeldt Company (1894), App. Cas., 634; Rousillon v. Rousillon. 14 Ch. Div., 351 Cloth Cempany v. Lorsont, L. R. 9, Eq., 345; Whittaker v. Howe, 3 Beav., 383; Match Company v. Roeber, 106 N. Y., 473, 13 N. E. 419; Gross, 127, N. Y., 480, 28 N. E., 469; Beal v. Chase, 31 Mich., 490; Hubbard v. Miller, 27 Mich., 15; National Ben. Co. v. Union Hospital Company, 45 Minn., 272, 47 N. W., 806; Whitney v. Slayton. 40 Me., 224 Pierce v. Fuller, 8 Mass., 222; Richards r. Seating Company, 87 Wis., 593, 58 N. W., 787. In the second class are Tallis v. Tallis, 1 El. & Bl., 391, and Lange v. Work, 2 Ohio St.. 520. In the third class the Machinery Company v. Dolphs, 138 U. S.. 617, 11 Sup. Ct., 412, Id., 28 Fed., 553, and Matthews v. Associated Press, 136 N. Y., 333, 32 N. E., 981. In the fourth class are American Strawboard Company . Haldeman Paper Company, 83 Fed., 619, and Hitchcock v. Anthony, Id., 779, both decisions of this court; Navigation Company v. Winsor, 20 Wall., 64: Dunlop r. Gregory, 10 N. Y., 241: Hodge v. Sloan, 107 N. Y., 244, 17 N. E., 335. While in the fifth class are the cases of Homer v. Ashford, 3 Bing., 322; Horner r. Graves, 7 Bing., 735; Hitchcock v. Coker, 6 Adol. & E.. 454; Ward r. Byrne, 5 Mees. & W., 547; Dubowski . Goldstein (1896), 1 Q. B., 478; Peels v. Saalfeld (1892), 2 Ch., 149; Taylor e. Blanchford, 13 Allen, 370; Keeler v. Taylor, 53 Pa. St., 467; Herreshoff . Boutineau, 17 R. I., 3, 19 Atl., 712.

Tode v.

It would be stating it too strongly to say that these five classes of covenants in restraint of trade include all of those upheld as valid at the common law, but it would certainly seem to follow from the tests laid down for determining the validity of such an agreement that no conventional restraint of trade can be enforced unless the covenant embodying it is merely ancillary to the main purpose of a lawful contract and necessary to protect the covenantee in the enjoyment of the legitimate fruits of the contract or to protect him from the dangers of an unjust use of those fruits by the other party. In Horner t. Graves (7 Bing., 735) Chief Justice Tindal, who seems to be regarded

as the highest English Judicial authority on this branch of the law (see Lord Macnaghten's judgment in Nordenfeldt v. Maxim Nordenfeldt Company (1894) (App. Cas., 535, 567), used the following language: "We do not see how a better test can be applied to the question whether this is or not a reasonable restraint of trade than by considering whether the restraint is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public. Whatever restraint is larger than the necessary protection of the party requires can be of no benefit to either. It can only be oppressive. It is, in the eye of the law, -unreasonable. Whatever is injurious to the interests of the public is void on the ground of public policy."

This very statement of the rule implies that the contract must be one in which there is a main purpose, to which the covenant in restraint of trade is merely ancillary. The covenant is inserted only to protect one of the parties from the injury which, in the execution of the contract or enjoyment of its fruits, he may suffer from the unrestrained competition of the other. The main purpose of the contract suggests the measure of protection needed, and furnishes a sufficiently uniform standard by which the validity of such restraints may be judicially determined. In such a case, if the restraint exceeds the necessity presented by the main purpose of the contract, it is void for two reasons: First, because it oppresses the covenantor, without any corresponding benefit to the covenantee; and, second, because it tends to a monopoly. But 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. REASONABLE RESTRAINT OF TRADE.

Much has been said in regard to the relaxing of the original strictness of the common law in declaring contracts in restraint of trade void as conditions of civilization and public policy have changed, and the argument drawn therefrom is that the law now recognizes that competition may be so ruinous as to injure the public, and therefore that contracts made with a view to check such ruinous competition and regulate prices, though in restraint of trade, and having no other purpose, will be upheld. We think this conclusion is unwarranted by the authorities when all of them are considered. It is true that certain rules for determining whether a covenant in restraint of trade ancillary to the main purpose of a contract was reasonably adapted and limited to the necessary protection of a party in the carrying out of such purpose have been somewhat modified by modern authorities. In Mitchell v. Reynolds (1 P. Wms., 181), the leading early case on the subject, in which the main object of the contract was the sale of a bake house, and there was a covenant to protect the purchaser against competition by the seller in the bakery business, Chief Justice Baker laid down the rule that it must appear before such a covenant could be enforced that the restraint was not general, but particular or partial, as to places or persons, and was upon a good and adequate consideration, so as to make it a proper and useful contract. Subsequently, it was decided in Hitchcock v. Ĉoker (6 Adol. & E., 454), that the adequacy of the consideration was not to be inquired into by the court if it was a legal one, and that the operation of the covenant need not be limited in time. More recently the limitation that the restraint could not be general or unlimited as to space has been modified in some cases by holding that, if the protection necessary to the covenantee reasonably requires a covenant unrestricted as to space, it will be upheld as valid. (Whittaker v. Howe (3 Beav., 383), Cloth Company . Lorsont (L. R., 9 Eq., 345), Rousillon . Rousillon (14 Ch. Div., 351), Nordenfeldt v. Maxim Nordenfeldt Company (1894, App. Cas., 535). See also Fowle v. Park (131 U. S., 88, 9 Sup. Ct., 658), Match Company v. Roeber (106 N. Y., 473, 13 N. E., 419). But these cases all involved contracts in which the covenant in restraint of trade was ancillary to the main and lawful purpose of the contract, and was necessary to the protection of the covenantee in the carrying out of that main purpose. They do not manifest any general disposition on the part of the courts to be more liberal in supporting contracts having for their sole object the restraint of trade than did the courts of an earlier time. It is true that there are some cases in which the courts, mistaking, as we conceive, the proper limits of the relaxation of the rules for determining the unreasonableness of restraints of trade, have set sail on a sea of doubt, and have assumed the power to say, in respect to contracts which have no other purpose and no other consideration on either side than the mutual restraint of the parties, how much restraint of competition is in the public interest, and how much is not.

The manifest danger in the administration of justice according to so shifting, rague, and indeterminate a standard would seem to be a strong reason against adopting it. The cases assuming such a power in the courts are Wickens v. Evans (3 Younge & J., 318), Collins v. Locke (4 App. Cas., 674), Ontario Salt Company . Merchants Salt Company (18 Grant (U. C.), 540), Kellogg v. Larkin (3 Pin., 123), Leslic v. Lorillard (110 N. Y., 519, 18 N. E., 363).

In Wickens v. Evans, three trunk manufacturers of England, who had competed with each other throughout the realm, to their loss, agreed to divide England into three districts, each party to have one district exclusively for his trade, and, if any stranger should invade the district of either as a competitor, they agreed to meet to devise means to promote their own views." The restraint was held partial and reasonable, because it left the trade open to any third party in either district. In answer to the suggestion that such an agreement to divide up the beer business of London among the London brewers would lead to the abuses of monopoly, it was replied that outside competition would soon cure such abuses-an answer that would validate the most complete local monopoly of the present day. It may be, as suggested by the court, that local monopolies can not endure long, because their very existence tempts outside capital into competition; but the public policy embodied in the common law requires the discouragement of monopolies, however temporary their existence may be. The public interest may suffer severely while new competition is slowly developing. The case can hardly be reconciled with later cases, hereafter to be referred to, in England and America. It is true that there was in this case no direct evidence of a desire by the parties to regulate prices, and it has been sometimes explained on the theory that the agreement was solely to reduce the expenses incident to a business covering the realm by restricting its territorial extent; but

it is difficult to escape the conclusion that the restraint upon each two of the three parties was imposed to secure to the other a monopoly and power to control prices in the territory assigned to him, because the final clause in the contract implies that when it was executed there were no other competitors except the parties in the territory divided. Collins v. Locke was a case in the privy council. The action was brought to enforce certain articles of agreement by and between four of the leading master stevedore contracting firms in Melbourne, Australia, who did practically all the business at that port. The court (composed of Sir Barnes Peacock, Sir Montague E. Smith, and Sir Robert P. Collier) describes the scope and purposes of the agreement and the view of the court as follows:

"The objects which this agreement has in view are to parcel out the stevedoring business of the port among the parties to it, and so to prevent competition, at least among themselves, and also, it may be, to keep up the price to be paid for the work. Their lordships are not prepared to say that an agreement having these objects is invalid if carried into effect by proper means-that is, by provisions reasonably necessary for the purpose-though the effect of them might be to create a partial restraint upon the power of the parties to exercise their trade." No attempt is niade to justify the view thus comprehensively stated, or to support it by authority, or to reconcile it with the general doctrine of the common law that contracts restraining competition, raising prices, and tending to a monopoly, as this is conceded by the court to have been, arê void. The court ignores the public interest that prices shall be regulated by competition, and assumes the power in the court to uphold and enforce a contract securing a monopoly if it affect only one port, so as to be but a partial restraint of trade. The case is directly at variance with the decision of the supreme court of Illinois in More v. Bennett (140 Ill., 69; 29 N. E., 888), hereafter discussed, and can not be reconciled in principle with many of the other cases cited.

The Canadian case of Ontario Salt Company v. Merchants' Salt Company is another one upon which counsel for defendants rely. That was the decision of a vice-chancellor. Six salt companies, in order to maintain prices, combined, and put their business under the control of a committee, and agreed not to sell except through the committee. It was held that because it appeared that there were other salt companies in the province, and because the combiners denied that they intended to raise prices, but only to maintain them, the contract of union was not in unlawful restraint of trade. The conclusion and argument of the court in Salt Company v. Guthrie (35 Ohio St., 666), hereafter stated, would seem to be a sufficient answer to this case.

Kellogg v. Larkin (3 Pin., 123) was an early case in Wisconsin, in which the action was on the covenant of a warehouseman in a lease of his warehouse, by which he agreed to devote his services to the lessee at certain compensation, and not to purchase or store wheat in the Milwaukee market. The covenant was held valid. Had nothing else appeared in the case the conclusion would have been clearly right, because such a covenant might well have been reasonably necessary to the protection of the lessee in his enjoyment of the warehouse and the good will of the lessor. But it further appeared that this lease, with the covenant, was only one of many such executed by the warehousemen of Milwaukee to the united grain dealers of that city, to enable the latter to obtain absolute control of the wheat market in Milwaukee. The court held the latter combination valid also. The decision can not be upheld, in view of the more modern authorities hereafter referred to. The case of Leslie v. Lorillard (110 N. Y., 519; 18 N. E., 363) would seem to be an authority against our view. In that case a stockholder sought to restrain the payment of an annual payment about to be made by the Old Dominion Steamship Company under a contract by which it bought off the Lorillard Steamship Company from continuing in competition with it in carrying passengers and freight between New York and Norfolk. The contract was held valid, although it had no purpose except the restraining of competition, and, so far as appears, the ob taining of the complete control of the business. The case is rested on Match Company v. Rocber (106 N. Y., 473; 13 N. E., 419), which was a case of the purchase of property and good will. It proceeds on the general proposition "that competition is not invariably a public benefaction, for it may be carried on to such a degree as to become a general evil," and thus leaves it to the discretion of the court to say how much competition is desirable, and how much is mischievous, and accordingly to determine whether a contract is bad or not. The case is directly opposed to Anderson v. Jett (89 Ky., 375; 12 S. W., 670), hereafter cited. It should be said that nothing appears in the report of the case to show directly that the purpose of the contract was to reserve the entire business to the Dominion Company, or to secure to it the power of regulating prices, but this natural inference from the terms of the contract is not negatived.

The case of Mogul Steamship Company v. McGregor, Gow & Co. (1892) (App. Cas., 25) has been cited to sustain the position of the defendants. It does not do so. It was a suit for damages, brought by a company engaged in the tea-carrying trade at Hankow, China, against six other companies engaged in the same trade, for loss inflicted by an alleged unlawful conspiracy entered into by them to drive the plaintif out of the trade, and to obtain control of the trade themselves. It appeared that the defendants agreed to conform to a plan of association, by which they should constantly underbid the plaintiff and take away his trade by offering exceptional and very favorable terms to customers dealing exclusively with the members of the association, and that they did this to control the business the next season after he had been thus driven out of competition. It was held by the House of Lords that this was not an unlawful and indictable conspiracy, giving rise to a cause of action by the person injured thereby; but it was not held that the contract of association entered into by the defendants was not void and unenforceable at common law. On the contrary, Lord Bramwell, in his judgment (at page 46), and Lord Hannen, in his (at page 58), distinctly say that the contract of association was void, as in restraint of trade; but all the law lords were of opinion that contracts void as in restraint of trade were not unlawful in a criminal sense, and gave no right of action for damages to one injured thereby. The statute we are considering expressly gives such contracts a criminal and unlawful character. It is manifest, therefore, that whatever of relevancy the Mogul Steamship Company case has in this discussion makes for rather than against our conclusion.

Two other cases deserve mention here. They are Roller Company v. Cushman (143 Mass,. 353; 9 N. E., 629) and Gloucester Isinglass and Glue Company a. Russia Cement Company (154 Mass., 92; 27 N. E., 1005). In these cases it was held that contracts in restraint of trade are not invalid if they affect trade in articles which, though useful and convenient, are not articles of prime or public necessity, and therefore contracts between dealers made to secure complete control of the manufacture and sale of such articles were supported. In the first case the article involved was a fastening of a certain shade roller, and in the other was glue made from fish skins. We think the cases here