where you find restraint of competition nearly always you find restraint of trade, but it is not invariable.

Senator CUMMINS. But do you remember any instance, either in the administration of the law of England or of our own law, in which restraint of trade has been found to be based upon any other ground than undue interfering of restraining of competition?

Mr. WALKER. Yes; the Danbury hatters' case is such a case. Senator CUMMINS. Will you kindly put in the record your remembrance of that case?

Mr. WALKER. In the Danbury hatters' case a manufacturer of hats sued a labor union for boycotting his hats. The labor union was not interfering with competition. It was not engaged in commerce at all. It was simply seeking to compel the plaintiff to unionize his shop.

Senator CUMMINS. Precisely. And at the bottom of all that was the effort on the part of the labor union to restrain or suppress competition as between themselves?

Mr. WALKER. As between themselves and workingmen who were not belonging to the union. That is true.

Senator CUMMINS. So really at the bottom of it all, in all those efforts on the part of either the common law of England or the antitrust law of the United States, there will be found the principle that in a civilized country there ought to be free, fair, full competition, or the opportunity for it. Is not that true?

Mr. WALKER. I can not quite agree with that statement. I think it is rather broader than I would formulate.

Senator CUMMINS. You have been a deep student of the subject, and it seems to be everywhere recognized, not only in the common law, but in our own civilization as well, as our own statutes, that restraint of trade, no matter whether "undue" or otherwise a monopoly, was opposed to the general welfare-that is, to the public policy. Now, why is restraint of trade opposed to the general welfare?

Mr. WALKER. Generically for these reasons: That civilization is based largely upon trade and commerce, and anything that impedes the exchange of commodities between peoples is a frictional condition, that is contrary to public policy and public welfare.

Senator CUMMINS. Yes; but that restraint of trade can only come about by the interfering with the opportunity which men may have to enter trade or commerce and carry it on.

Mr. WALKER. There may be mutual restraint of trade and extraneous restraint of trade. Where two parties combine to restrain a third party from engaging in a particular business, that is always wrong; and that form of restraint of competition always results in restraint of trade. But where two parties agree, as in the form of a partnership, to combine into one interest businesses formerly conducted as two interests that combination is not necessarily nonethical and does not necessarily result in restraint of trade.

Senator CUMMINS. We might go further and say that such an arrangement if honestly carried on can not result in a restraint of trade?

Mr. WALKER. It might promote trade.

Senator CUMMINS. Therefore it has always seemed to me that what Mr. Edmunds did, by substituting a prohibition against restraint of trade for a prohibition against undue interference with competition, was to transfer from the legislative branch of the Government to the

judicial branch of the Government the determination of whether a particular arrangement was opposed to public policy or the general welfare, or whether it was in harmony with the public policy or the general welfare.

Mr. WALKER. I think that is true.

Senator CUMMINS. And you believe that the determination of that question ought to remain with the courts and ought not to be attempted by the legislative branch of the Government?

Mr. WALKER. That is my view.

Senator CUMMINS. Of course, as you said a few minutes ago, this is an age of evolution, and just as our commerce clause in the Constitution must be broadened in its interpretation to meet the new conditions; you recognize, do you not, that the words "in restraint of trade" must be broadened or varied to meet new conditions?

Mr. WALKER. Those words do not have to be broadened or varied. They have only to be applied to the new conditions.

Senator CUMMINS. But in the application there may be a breadth of interpretation that was never dreamed of by the courts which originally coined the phrase, "in restraint of trade"-that is true, is it not?

Mr. WALKER. That is quite correct.

Senator CUMMINS. You look upon the opinions delivered by the Chief Justice of the United States Supreme Court in the Standard Oil Co. case and in the American Tobacco Co. case as largely obiter dicta?

Mr. WALKER. I do.

Senator CUMMINS. But you recognize, do you not, that the obiter dicta of these two opinions may become the rule under which the law is applied to some subsequent case which may arise?

Mr. WALKER. Obiter dicta are sometimes followed by subsequent decisions and sometimes they are not.

Senator CUMMINS. That is to say, suppose that in another case that might come before the Supreme Court of the United States the court would find that there was some restraint of trade, but that, in its judgment, it was not an "undue" or "unreasonable" restraint of trade, do you not believe, as a man of wide observation and long experience, that the court would be apt to say that, "In view of the opinions in those two cases, we will not hold this conduct of this corporation violative of the law, because the restraint of trade which it has committed is not an 'undue' restraint of trade.

Mr. WALKER. There is some probability that the court may so decide and some probability that it will repudiate those obiter dicta of Chief Justice White.

Senator CUMMINS. Of course, whether the law is thus applied or whether it is repudiated-I mean the opinions so far as they are obiter dicta-will depend upon the economic view largely of the men who happen to sit on the bench at that time?

Mr. WALKER. I think that is true.

Senator CUMMINS. Now, in the common law you do not remember any case, do you, in which the phrase "in restraint of trade" was qualified of modified by either the word "reasonable" or "undue"? Mr. WALKER. I have searched, but I have never found such a

case.

Senator CUMMINS. There are cases, however, in which the courts of England have declared that a certain restriction upon competition was not an "unreasonable" restriction, or "undue" restriction, and that therefore such a restriction was not "in restraint of trade." There are such decisions?

Mr. WALKER. There are.

Senator CUMMINS. And possibly you agree with me that the Supreme Court of the United States in these opinions has rather misplaced the application or use of the term unreasonable" or "undue," and that it ought to be applied to "competition" and not to the phrase "in restraint of trade"?

Mr. WALKER. I agree with you perfectly on that point.

Senator CUMMINS. But the chief object-I will not say the only object, but the chief object-both of the common law and of this statute, was to preserve in the business of the people fair and free competition, or opportunity for it?

Mr. WALKER. I think that is an accurate statement.

Senator CUMMINS. For instance, to illustrate the development of the law, you are familiar with what is ordinarily known as the English case of the Mogul Steamship Co. ?

Mr. WALKER. I am.

Senator CUMMINS. In which a certain agreement-the particulars of which I need not recite, because you are familiar with them-was held not to be opposed to the common law of England, and which you think, no doubt, would be opposed to the antitrust law of the United States. Do you agree with me on that?

Mr. WALKER. No; I do not think your statement of the Mogul case agrees with the impression I have received of it. The impression I have received of the Mogul case is that the House of Lords held that although the conduct complained of was violative of the common law of England, it could not be remedied by an action brought by an injured party, and that the common law would take cognizance of that illegality only in litigation between the parties thereto.

Senator CUMMINS. Was not the substance of it, after all, the common law must be tested in its application by the effect upon the public welfare or the public interests, and that it could not be against the public interests that persons engaged in the same business should agree among themselves that they would not conduct their business at a loss?

Mr. WALKER. I do not so understand the case, Senator.

Senator CUMMINS. Well, you have no doubt that under the antitrust law, it would be unlawful for steamship companies-assuming that the law applied to them-to enter into an agreement that no one of them would carry freight at a loss?

Mr. WALKER. I believe that such an agremeent would be contrary to the Sherman law.

Senator CUMMINS. Now, if the object of the law is to preserve that competition in business that will be a regulator of prices-and that is the competition that I have in mind, and the only one that is material, I think, to the country-it is perfectly clear that there may be combinations in these days, under a corporate form unknown in former days, that would impair or destroy that competition, and of which the common law was utterly ignorant?

Mr. WALKER. Specific cases to which the common law was not applied?

Senator CUMMINS. Yes; cases to which the common law, as administered in the courts of England, would not apply at all?

Mr. WALKER. Yes, that is right, as administered in the courts of England.

Senator CUMMINS. As administered in the courts of England.

Now, you have said that there was no more uncertainty about the antitrust law than is found in many other phases of the law. Take the word "monopoly" to begin with. Do you think that the people of this country and the courts of this country understand that word, and apply that word as it was understood in the common law?

Mr. WALKER. The word "monopoly" is not in the Sherman law. The word there is a verb-" monopolize"--and the people of this country entertain views as to the meaning of "monopolize" that are quite varying. There is a great variety of opinions, but I believe that it is entirely possible for a trained lawyer to advise a client as to the scope of the word "monopolize," as it occurs in the Sherman law. Senator CUMMINS. You do not think, do you, that it would be necessary, in order to violate the terms of the Sherman law, the second section of it, that one concern or one management had absorbed all of a certain industry?

Mr. WALKER. Certainly not, because that section prohibits attempts to monopolize.

Senator CUMMINS. But putting aside the difference between the word "attempt" and the attainment of the object. Suppose that in a certain industry one management had acquired such power in it that it could fix prices arbitrarily-I do not mean quite arbitrarily, because there are certain conditions which always operate upon even the will of a single man—and there was no intent to go any further. Do you think that would be a monoply within the meaning of the second section?

Mr. WALKER. If the power were exercised it would be an attempt to monopolize, and I think it would not be straining language improperly to say that it would be a monopolizing.

Senator CUMMINS. Some men who have appeared before us have seemed to believe that whenever a particular combination or corporation had acquired the power to fix prices or to dominate an industry, whatever it may be, that it was a monopoly or was exercising a monopolistic power. Do you agree to that?

The pos

Mr. WALKER. No; I dissent from that emphatically. session of the power to do a wrong is quite different from actually doing a wrong.

Senator CUMMINS. I was just leading up to that. Do you think that the second section prohibits conduct only, and does not prohibit

a status?

Mr. WALKER. I do.

Senator CUMMINS. I assume that the reason that a monopoly is opposed to public policy is that one of the reasons any way-is that it may unduly enhance the prices of things it sells or unduly lower the prices of things which it buys. Now, we will suppose that in a certain industry there are 12 concerns, and some enterprising man comes to the conclusion that he would like to consolidate all of them into one management or one corporation. Suppose he does

that, and that he goes on without unduly enhancing prices, and in an ethical way, even in a benevolent way. Do you think that, so long as the conduct of such a corporation is fair and honest, it is not a violation of law?

Mr. WALKER. That is my view.

Senator CUMMINS. And therefore we must wait until such a corporation does something that injures the public welfare before proceedings could be taken against it under the second section of the law?

Mr. WALKER. Does something that injures the public welfare or some private right With that qualification I should agree with your

statement.

Senator CUMMINS. I am speaking solely now of remedies which could be pursued by the Government itself, and not by the individual. In the same way, you believe that such a consolidation, or, if it were a partial consolidation, could not be proceeded against under the first section unless it had injured the public or performed some act that was wrong in itself?

Mr. WALKER. I hold that the Sherman law is not violated unless some overt act is committed.

Senator CUMMINS. That no part of the Sherman law is violated until that is done?

Mr. WALKER. That is right.

Senator CUMMINS. Well, let us take the case of the-I won't take the case of the United States Steel Corporation, because it is an existing case, and I think it would be bad form to discuss it. Suppose that we have these 12 concerns that I have mentioned, all doing about an even part of the business, and that they were all consolidated into one corporation, which, to begin with at least, would do all the business of that particular field. Now, it is your opinion that that would not be in restraint of trade in and of itself?

Mr. WALKER. That is my opinion.

Senator CUMMINS. And that in order to bring such a corporation within the prohibition of the first section the Government must wait until it does some act that unfairly excludes other people from coming into the business?

Mr. WALKER. That is not quite representative of my idea, because the violation of the first section may exist where there is no attempt to exclude third parties from competition, but may exist as the result of agreements not to compete between the parties to the combination. Senator CUMMINS. I am not speaking of any combination. Mr. WALKER. Oh.

Senator CUMMINS. I mean any combination of independent producers. I put the case: Here are 12 manufacturing corporations engaged in some industry, and they are competing with each other and they are doing about the same extent of business. Now, some man, we will say with the laudable motive of attempting to reduce the cost of production, organizes a corporation that buys, if you please, all those concerns, and that corporation is the only one engaged in that business. Now, as I understand you, it is your opinion that would not be in violation of the first section of the antitrust law in and of itself?

Mr. WALKER. That is my opinion.