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THE GREEN BAG
the members to transact business in the ordinary way, as well as its effect upon the volume or extent of the dealing in the com modity, that is regarded. ... It is not material that the combination did not prevent the letting of any particular con tract. . . . The question is as to the effect of such combination upon the trade in the article, and if that effect be to destroy competition and thus advance the price, the combination is one in restraint of trade." (P- 245-) Other decisions are but amplifications and applications to novel facts of the doctrines deducible from the opinions.already cited, and the limitations of this article for bid their further mention. We therefore conclude, that a restraint of trade within the purview of the statute is an interfer ence, however reasonable, with the natural and free play of competition.
WHAT CONTRACTS RESTRAIN TRADE. How and how much must the element of restraint of trade be involved in a contract to bring it within the purview of the anti trust laws? The unfailing criterion for determining, in this regard, whether a con tract is within the purview of the statute is by inquiring — does it directly, not inci dentally or collaterally, but directly, affect trade? CONTRACTS REGARDING PARTICULAR BUSINESSES, MANUFACTURE, ETC. It was a phase of this inquiry that arose in the first case before the Supreme Court in connection with the Act of 1890, that of United States v. E. C. Knight Co., (156 U. S. i). Briefly stated, the case was this: the defendant American Sugar Refining Com pany, already largely controlling the manu facture of refined sugar in the United States, bought up the controlling interest of the stock of four of its chief competitors, also defendants, and thus acquired a monopoly of the business. The suit was instituted by
a bill filed by the Attorney General for the dissolution of the combination. It was conceded that competition was stifled and a monopoly established, but the contention was that the restraint, if any, was of manu facture and not of commerce. Upon the facts of this particular case, the Supreme Court sustained the contention, saying: "Doubtless the power to control manu facture of a given thing involves in a certain sense the control of its disposition, but this is a secondary and not the primary sense; and although the exercise of that power may result in bringing the operation of commerce into play, it does not control it, and affects it only incidentally and indirectly. . . . There was nothing in the proofs to indicate any intention to put a restraint upon trade or commerce, and the fact, as we have seen, that trade or commerce might incidentally be affected was not enough to entitle the complainant to a decree." (p. 12, p. 17.) Subsequent decisions have shown that the doctrines here laid down are applicable only when the combination is, as here, solely of the manufacture, and " there is nothing in the proofs to indicate any intention to put a restraint upon trade "; and when, there fore, it can be truly said that there is no direct effect upon trade. When the Addyston Pipe and Steel Co. case (supra) came before the court, it was urged upon the authority of the Knight case that the agreement among the defendant manufacturing companies was not a regu lation of commerce. The court pointed out the limitation we have suggested to the Knight case, that in that case there was no agreement as to the future disposition of the manufactured article, and that the probable intention to dispose of it by sending it to some market in another state was held immaterial. The Court very properly held the decision, so construed, to be not con trolling. As may be seen by a glance at the facts of the Addyston case (supra, pp. 9-10), the contract therein was for the direct and immediate regulation of the contracts of sale of the manufactured articles.
