209 U. S. 423, an agreement of lease had been held by the Supreme Court of the territory of Oklahoma to be void as an unreasonable restraint of trade and as against public policy.

In the case the lessor company had agreed with the lessee company not only to go out of the field of competition and not to enter that field again, but had further agreed "to render every assistance to prevent others from entering it.' There were other facts in the case showing that the lease was in aid of a scheme of monopoly on the part of the lessee company, the Gulf Compress Company. It was shown that the lessee company was in the business of leasing and operating competing compresses for the purpose of monopolizing as far as possible the business of compressing cotton in a large portion, if not all, of the cotton raising districts of the United States, and that the lease was procured from the Shawnee Company in pursuance of said scheme, and other leases of other compressors were also secured for like purposes "and that it is the design of the Gulf Compress Company to increase the charge of compressing cotton."

In the lease the Shawnee Company had agreed not only to refrain from competition, but to "render the 'Gulf Company' every assistance in discouraging unreasonable and unnecessary competition." It further appeared from the evidence that the Gulf Company had announced in a letter to the Shawnee Company in effect its purpose to create as far as possible a monopoly of the compressing business (page 433). It further appeared (page 434) that the "Gulf Company was a close corporation which, starting in Alabama, rapidly extended from Alabama to all the cotton growing territory."

The court recognized the principle announced in the Trans-Missouri and Joint Traffic Cases, "That the sale of the good will of a business with an accompanying agreement not to engage in a similar business was not a restraint of trade within the meaning of the Sherman Act." The court said:

"The principle is well understood. The restraint upon one of the parties must not be greater than protection to the other party requires, and it needs no further explanation than is given in Gibbs v. Baltimore Gas Co., 130 U. S. 396. The Supreme Court of the territory recognized the principle, but said: "Tested by the general principles applicable to contracts of this character, this agreement is far more extensive in its outlook and more onerous in its intention than is necessary to afford a fair protection to the lessee.'"'

The case of Continental Wallpaper Co. v. Voight Sons, 212 U. S. 227, was a case of an agreement between a number of manufacturers who organized a selling company through which their entire output was sold to such persons only as would enter into a purchasing agreement by which their sales were restricted. It was held that the clear effect of this arrangement was to restrain and monopolize. The agreement provided for selling to jobbers for the account of the Continental Wallpaper Company at particular specified prices, with particular discounts. The company was a selling company, organized to control all the selling business of the manufacturing wallpaper corporations, partnerships and persons who owned the stock of the Continental Wallpaper Company and who made separate contracts with that corporation giving it entire control of the selling business of the manufacturers. The illegality of this arrangement seemed to the court too clear for discussion, and was not in fact discussed by the court, the only question discussed and decided being whether a purchaser of goods at the stipulated prices could avoid payment on the ground that the vendor company was illegal combination.

In each and all of the cases which the court held to be obnoxious to the Sherman Act the contracts or combinations were clearly in "unreasonable" or "undue" restraint of trade, and would have been illegal at common law.

On the other hand, in Cincinnati Packet Company v. Bay, 200 U. S. 179, it is said by Mr. Justice Holmes at page 184, in upholding a covenant not to compete made in connection with a sale:

"It is argued, to be sure, that the last mentioned covenant is independent and not connected with the sale of the vessels. The contrary is manifested as a matter of good sense, and is proved even technically by the words 'it is also agreed as a part of the consideration of this agreement.' By these words the covenant not to do business between Cincinnati and Portsmouth for five years is imported into the sale of the ships, and made one of the conventional inducements of the purchase. The price is paid not for the vessels alone, but for the vessels with the covenant.

So, still more clearly, the parallel installments for five years are paid for the covenant, at least in part. It is said. that there is no sale of good will. But the covenant makes the sale.

"Presumably all that there was to sell, beside certain instruments of competition, was the competition itself, and the purchasers did not want the vendors' names.

"This being our view of the covenant in question, whatever differences of opinion there may have been with regard to the scope of the Act of July 2, 1890, there has been no intimation from any one, we believe, that such a contract, made as part of the sale of a business and not as a device to control commerce, would fall within the act. On the contrary, it has been suggested repeatedly that such a contract is not within the letter or spirit of the statute (United States v. Trans-Missouri Freight Association, 166 Ù. S. 290, 329, United States v. Joint Traffic Association, 171 U. S. 505, 568), and it was so decided in the case of a patent, Bement v. National Harrow Co., 186 U. S. 70, 92. It would accomplish no public purpose, but simply would provide a loophole of escape to persons inclined to elude performance of their undertakings if the sale of a business and temporary withdrawal of the seller necessary in order to give the sale effect were to be declared illegal in every case where a nice scrutiny could discover that the covenant possibly might reach beyond the State line. We are of opinion that the agreement before us is not made illegal by either of the provisions thus far discussed."

Coming now to a consideration of the recent decisions of the Supreme Court in the Standard Oil Case and in the Tobacco Case, I submit that the opinions in these cases are in consonance with and not a repudiation of the previous

decisions of the court, so far as they distinguish between "reasonable" and "unreasonable" contracts.

In discussing these decisions I wish to once more point out, as I have already stated, that while I regard the opinions of the court, so far as they discuss the construction of the statute, as correct expositions of the meaning and intent of the statute, I do not wish to be understood as concurring in the conclusion of the court as to the facts of the case or as to the application of the statute to the American Tobacco Company or the Imperial Tobacco Company of Great Britain and Ireland, the latter of which companies I represented on the argument in the Supreme Court.

The opinions of Mr. Chief Justice White do not, in fact, use the word unreasonable in defining the class of contracts prohibited by the statute, but substitute for that word the word "undue" or "unduly". The Chief Justice would have been justified by the previous decisions of the courts in using the term "unreasonable”. The test, however, as actually laid down by the Chief Justice in his opinions in those cases concurred in by all the justices except Mr. Justice Harlan, is that contracts are within the statute which unduly restrain trade.

It is quite true that this word apparently interjects into the statute a test which the statute itself does not apply. The statute says every contract in restraint of trade. The court says every contract in undue restraint of trade. By the insertion of this word undue or unduly, however, the statute is made logical, reasonable, and enforcible. It is quite true that the test of what is a due or an undue restraint of trade is left an open question which the court must decide in each case as it comes up, upon the facts and circumstances of that case, but the same is true of a vast number of other matters which are the subject of litigation. Where a hard and fast rule cannot be applied, then it is necessary that discretion should be allowed to the courts in determining between what is lawful and what is unlawful, what permissible and what not permissible.

Just what did the Supreme Court hold in the Standard Oil and Tobacco Cases? And just how would the law read if these opinions were set aside by legislation? Let us test the logic of those who criticize these opinions as judicial legislation by making them read as the critics would have them read.

In the Standard Oil opinion, Mr. Chief Justice White says that the statute "evidenced the intent not to restrain the right to make and enforce contracts, whether resulting from combination or otherwise, which did not unduly restrain interstate or foreign commerce, but to protect that commerce from being restrained by methods, whether old or new, which would constitute an interference that is an undue restraint."

And again, the Chief Justice, referring to the second section of the act, which prohibits monopolizing, says: “The ambiguity, if any, is involved in determining what is intended by monopolize. But this ambiguity is readily dispelled in the light of the previous history of the law of restraint of trade to which we have referred and the indication which it gives of the practical evolution by which monopoly and the acts which produce the same result as monopoly, that is, an undue restraint of the course of trade, all came to be spoken of as, and to be indeed synonymous with, restraint of trade."

And again he says that the purpose of the statute "was to prevent undue restraint of every kind or nature.”

And again, speaking of the remedies to be awarded by the court, he says: "The fact must not be overlooked that injury to the public by the prevention of an undue restraint on, or the monopolization of trade or commerce is the foundation upon which the prohibitions of the statute rest, and moreover that one of the fundamental purposes of the statute is to protect, not to destroy, rights of property."

In the Tobacco Case, the Chief Justice says: "It was held in the Standard Oil Case that as the words restraint of trade at common law and in the law of this country at