§ 211. A general rule. It is clearly apparent that it is not every injury or oppression towards others that renders the object of any combination, whether a partnership or a corporation, illegal. In so far as any general rule can be laid down, it may be stated as follows: If injury or oppression towards others be the prime object of the combination, then such object is illegal and stamps the combination as a conspiracy; if, however, the injury or oppression towards others be simply incidental to the object of the combination, then such object is not illegal, and the combination is not a conspiracy. And this general proposition will, as a rule, hold good, though it should appear as a matter of fact that the indirect injury and loss to others resulting from the operation of some particular legal combination is far greater than the direct injury resulting from the operation of some smaller illegal combination. 8 212. Extent of injury to others not a test of legality of a combination.- It is apparent that neither the extent nor the character of the injury to others resulting from the operation of a given combination is a test of the legality of the combination. Conditions are constantly changing in the commercial and industrial world. Under normal conditions traders and manufacturers are involved in loss and financial ruin as the result of forces over which they have no control. The establishment of department stores, for instance, in large cities has altered the entire complexion of retail trade; and small shopkeepers heretofore prosperous find themselves unable to compete with these huge establishments. Among retail dealers, and owners of real estate in cities whereon are situated small shops and stores, the prejudice against department stores fully equals any public prejudice against trusts and combinations; and attempts are frequently made to pass laws the object of which is to disintegrate the department store to break up the combination of businesses which go on under one large roof. So far these attempts have proyed abortive, few legislatures being willing to risk the passage of acts which on their face are as idle and foolish as would be the passage of a law against the employment of labor-saving machinery; and so far no court has been found willing to sustain any act looking towards the disintegration of the department store. The department store is simply a striking illustration of the tendency of the day towards concentration and combination. What is going on in the world of retail trade is going on in the world of manufacture and commerce and all branches of industry. It is needless to say that co-operation, organization and combination in all forms affect more or less parties who are outside of the combination; and exactly in proportion as the combination is profitable to all interested in it and economically beneficial to the public at large, to that extent it is more or less disastrous to all who are in competition with it. The extent of the injury or loss to the outsiders is no measure of the legality of the combination. If the combination is improvi dently conducted, those outside of it may actually benefit thereby. On the other hand, if the combination is wisely conducted, those outside of it may find themselves deprived of trade and means of support within a month or six months, as the case may be. These effects incidental to the proper conduct of any sort of combination - whether a partnership, a corporation or a consolidation are of interest to the student of economics, but are entirely irrelevant so far as courts or juries are concerned, except in so far as they may tend to show affirmatively that the original intent of the combination was of an unlawful or oppressive character. - § 213. Irrespective of the practical results of the operation of a combination, the question of its legality or illegality turns entirely upon its original purposes and objects. If such objects and purposes either as means or ends are to profit by the direct oppression of third parties, then the combination is illegal; if, however, such objects and purposes are simply to accomplish in larger form what individuals might legally accomplish in lesser degree, without intending to oppress or injure others to any greater extent than is normally incidental to the prosecution of an object in itself legitimate, then such combination is legal. § 214. Conflicting statutory provisions.-In laying down these general propositions the statutes of the several states and of the United States specifically directed against combinations are not taken into consideration, for many of these statutes in their liberal terms are so broad and sweeping that they condemn entirely all combinations, whether good or bad, reasonable or unreasonable. These statutes will receive due con sideration in a chapter by themselves. Neither courts nor text-writers possess sufficient ingenuity to reconcile the legis lative enactments of the various states of this country, whether these enactments apply to combinations or to other matters; and no matter what the subject under consideration — divorce, corporations or combinations,- the most that court or textwriter can do is to ascertain if possible the general principles governing the law of the subject, and then state separately the various statutory provisions bearing thereon. Seldom, indeed, is it that statutory provisions have any logical connection with, or harmonious relation to, the general principles. § 215. With these general remarks we will proceed to the consideration of the cases wherein courts have sustained combinations, and in order that the bearing of the cases may be appreciated it is necessary to state each somewhat in detail. CHAPTER 7. CASES SUSTAINING COMBINATIONS. 216. Cases of legal combinations. 217. Combination of zinc companies. 218-221. Combination of oleomargarine producers. 222. Combination of glue makers. 223, 224. Combination of makers of envelopes. 225, 226. Combination of manufacturers of curtain fixtures. 227. Combination of stone quarries. 228. Combination of manufacturers of laundry machinery. 229, 230. Combination of manufactures of woodenware. 231, 232. Combination of pottery makers. 233. Combination among buyers of produce. 234. Combination between buyers and sellers of sheep and lambs. 235, 236. Combination of mill-owners and warehousemen. 237, 239. Combination of stevedores. 239. Combination of owners of amusement resorts. 240-243. Combination of gas companies. 244. Combination between parties competing for public franchise. 245. Combination between publishers - Associated Press. 246. Combination of salt producers in Canada. 247, 248. Combination between owners of steamboats. 249-266. Combination between steamship owners- Mogul Steamship Co. case, England. - § 216. Cases of legal combinations. The leading cases in which combinations have been sustained are here gathered together. The facts in each case are recited somewhat at length so that both the limitations and the scope of the decision may be fully appreciated. The effort has been made to state in the text the general propositions laid down in each decision, and to give in the note sufficient of the opinion to enable the reader to make intelligent use of the authority without necessarily turning to the original report. It would be misleading to attempt to cover these cases with a few general propositions, since the decision in each case depends entirely upon the peculiar facts presented for the consideration of the court. § 217. Combination of zinc companies.-Competing zinc companies had become interested in the same mineral deposits, and in developing the veins became involved in controversies and litigation. To adjust their differences, settle the litigation and suppress their competition the rival interests were consolidated, and in the consolidation other mines and plants in different parts of the state and country were purchased. The combination was sustained as legal upon the following grounds: 1. That zinc was not a necessity of life. 2. That the combination controlled but a small fraction of the world's supply. 3. That the combination did not tend to create a monopoly. 4. That the law forbidding forestalling the market does not apply to the purchase of zinc properties. 5. That the buying by one corporation of the property and assets of another and consolidating the whole into one business, as was done in this case, is not contrary to public policy. 6. That there is no foundation either in law or morals for the proposition that the public have the right to have private owners of property - such as zinc properties-continue to do business in competition with each other. 7. That the essential quality of competition is that it shall be the result of free choice of the individual and not of any legal or moral obligation or duty.1 1 Meredith et al. v. Zinc & Iron Co. (1897), 55 N. J. Eq. 212, 37 Atl. R. 539. In its opinion the court said: "It remains to consider the question of illegal combination which would subject the new corporation to an attack by the attorney-general. Upon such consideration as the four days allowed me for that purpose have permitted me to give the subject, I think that there is nothing in that ground. "The circumstances show that it is not the object or purpose of the contract to create a monopoly. The affidavit of the president of the New Jersey Zinc and Iron Company shows that the zinc ores which will be controlled by it after these several purchases constitute but a small fraction of the world's supply, and that its product of zinc will also be but a small fraction of that purchased throughout the country. Besides, buying up by one corporation of the property of another, and consolidating the whole into one business to the extent and in the manner provided for in this agreement, is not, in my judgment, contrary to public policy, nor does it tend to create a monopoly. The question was carefully examined by Vice-Chancellor Green, in Ellerman v. Stock Yards, 4 Dick. Ch. R. 217, and that opinion was reviewed and reaffirmed in the subsequent case of Willoughby v. Junction Railways, 5 Dick. Ch. R. 656, heard by both Vice-Chancellor Green and Vice-Chancellor Van Fleet, and they concurred in the same result. "It must be remembered in this connection that these companies are not exercising any public franchise |