Mr. Justice Peckham and the Sherman Act By Arthur W. Spencer THERE are other means of ex tirpating the evils of monopoly than by the enactment of a drastic statute like that of King James I.1 Exclusive franchises, despite the ancient rule against monopolies, seem not to have been always void at common law, and they are not an unmixed evil, for the early economic development of the United States was somewhat advanced by the granting of such franchises. One of the merits of American federal jurisprudence, up to 1890, was the fact that while curbing the powerful corpor ation from working public injury to interstate commerce, it checked the state legislatures from arbitrarily im pairing property rights exercised without detriment to the public welfare. The effect of this juridical policy was not to legalize monopoly, but to narrow the definition of unlawful monopoly in ac cordance with justice, so as to include only practices savoring of business oppression. Until 1890, the year in which the Sherman act was passed, Congress left the law of monopoly practically in the hands of the Supreme Court. The result was that the law developed piecemeal, by gradual amplification, and was molded into a far more satis factory form than would have been the case if the process had been hastened or interrupted by legislative enact ments. The principle that a corporate charter is not to be tampered with, unless there are special circumstances analogous to those recognized under the British Constitution justifying legisi21 James I, c 3.
lative interference, has thus been preserved intact since the decision in the Dartmouth College case.2 The Dartmouth College case has provided a powerful check on the popu lar impulse to impose unreasonable restrictions on business supremacy. The fundamental principle of this case, that franchises granted by charter are inviolable, was but a new phase of the ancient doctrine that no freeman shall be disseised of franchises and priv ileges granted him by the king.3 The theory that a corporate charter is a contract to which the state is a party is of course strange to the common law.4 1 4 Wheat. 518, 4 L. ed. 629. •Coke, Inst., pt. II, c. 29, (4), 3.
- At one time it may have looked as if the relation
between king and subject was "the outcome of agreement," and as if "the law of contract threat ened to swallow up all public law." (Pollock and Maitland, History of English Law, v, II, p. 233.) But that was in the age when feudalism was at its high-water mark. The grants which beginning with the borough charters and documents of liberties of the realm subtracted from the royal power marked the beginning of the decline of the feudal system, and it seems to have been not by agreement but by compulsion, not by contract but by gift, that a new relation of the king to his subjects came into being, and the private law of contract showed itself unable to cope with problems of public constitutional law. Instead of viewing a grant of liberties as made in expectation of the crown receiving the benefit of the strengthened allegiance of his subjects, it would perhaps be better to regard it as a concession practically without consideration. As Bracton put it, "a liberty is an evacuation of a servitude, and they regard each other as contraries, and do not remain together." (De Legibus et Consuetudinibus Angliae, book I, chap. 24, sec. 3.) Where, on the o^her hand, there was consideration, as in the case of the trading privileges and borough charters which were some times sold by the crown for increased revenue, it is to be remembered that the modern law of contract was practically non-existent before the time of Edward I; thus there arose no doctrine of the necessity of consideration to validate an agreement under seal. On the contrary, the modern common law rule that a contract under seal will be enforced without proof of consideration
