the United States, buying the live stock from different parts of the United States, converting it into fresh meats and then shipping the meats to their agents to be sold to consumers in different parts of the United States. The Court said that the purchases, shipments and transportation were commercially interdependent, and that it was immaterial that the fresh meats in the hands of the agents of the defendants were subject to ordinary state taxation. The Court also said that the allegations of the bill of an unlawful combination to the effect that the purchasing agents were required to refrain from bidding against each other, and in bidding up at times so as to induce large shipments and agreeing upon prices to be adopted and restrictions upon the quantities of meats to be shipped, and the making of agreements between transportation companies for rebates and discriminating rates, was sufficient to show a violation of the law. The demurrer was overruled and the motion for an injunction was sustained. This judgment was affirmed by the Supreme Court (no dissent), January 30, 1905, supra, § 68.

$321. The Washington Shingle Trust case. In Gibbs v. McNeeley et al., 55 C. C. A. 70, 118 Fed. Rep. 120, 60 L. R. A. 152 (ninth circuit, 1902, reversing 107 Fed. Rep. 210 and 102 Fed. Rep. 594), it was held that an association of manufacturers and dealers in red cedar shingles in the State of Washington formed for the purpose of controlling the production and sale of such shingles, which are made only in the state, but are principally sold and used in other states, and by its action in closing the mills of its members, has reduced the production and has also arbitrarily increased the prices at which the pro luct is sold, is a combination in restraint of commerce, in violation of the Act of 1890. The Court applied the rule of the Knight and Addyston cases, and said that it was not essential for a contract to refer expressly to interstate commerce, if its purpose and effect were necessarily to restrain such

commerce.

§ 322. Incidental restraint of trade not violative of the Act. The contract condemned by the statute is one whose direct and immediate effect is a restraint upon that kind of trade or commerce which is interstate. It does not include regulations which are nothing more than a charge for a local

facility provided for the transaction of commerce, nor does it include an agreement among business men for the better conduct of their own business which incidentally effects interstate commerce. The leading cases on this subject are those decided in relation to the Kansas City Live Stock Exchange, Hopkins v. United States, 171 U. S. 578, 43 L. Ed. 290, 296, and the Traders Live Stock Exchange of Kansas City, 171 U. S. 604, 43 L. Ed. 300, wherein the Supreme Court reversed the judgment of the Circuit Court in 82 Fed. Rep. 529.

§ 323. The Kansas City Live Stock Exchange cases.- In the first of these cases the Court held that the Kansas City Live Stock Exchange, an unincorporated voluntary association of men doing business at the stock yards situated partly in Kansas City, Missouri, and partly across the state line in Kansas City, Kansas, doing business as commission merchants, receiving consignments of cattle under rules which prohibited the employment of agents to solicit consignments except upon a stipulated salary, and forbidding the sending of prepaid telegrams or telephone messages as to the conditions of the market, and providing that no member should transact business with any commission merchant of Kansas City not a member of the Exchange, or that any person violating the rules or regulations or with any expelled or suspended member after notice of such violation, was not in violation of the Act. The court said that the situation of the yards partly in Kansas and partly in Missouri was a fact without any weight, and that such business was not in fact interstate business or commerce. The Association merely provided facilities for the transaction of commerce. There must be some direct and immediate effect upon interstate commerce to come within the Act. The Court in this case cited a number of agreements incidentally affecting commerce which would not be included, as agreements among land owners, enhancing the cost of transporting cattle, or that of railroad employees to cease from work unless paid a certain compensation, saying that these agreements would enhance the cost of interstate commerce, but only indirectly and incidentally.

In Anderson v. United States, supra, the defendants were not commission men, but were themselves purchasers of cattle on the market. The members bore the same relation to the

Association and they had carried on the same business as they carried on in the Hopkins case. The court said it was not called upon to decide whether the defendants were or were not engaged in interstate commerce, because the agreement was not one in restraint of trade, nor was there any combination to monopolize or attempt to monopolize such trade within the meaning of the Act.

The Court in this latter case laid down the general rule that where the subject-matter of the agreement does not directly relate to and act upon and embrace interstate commerce, and where the anticipated facts clearly show that the purpose of the agreement was not to regulate, obstruct or restrain that commerce, but that it was entered into with the object to properly and fairly regulate the transaction of the business in which the parties to the agreement were engaged, such agreement will be upheld as not within the statute, where it can be seen that the character and terms of the agreement are all calculated to attain the purposes for which it was formed and where the effect of its formation and enforcement upon interstate trade and commerce is in any event indirect and incidental, and not its purpose or object. These cases were decided with only one dissent, that of Mr. Justice Harlan.

See also Field v. Barber Asphalt Co., 194 U. S. 618, 48 L. Ed. 1142, where the Court held that the specification in an ordinance, that a particular kind of asphalt produced only in a foreign country should be used in a city pavement, was valid under the laws of the state and did not violate the Act of 1890, or any Federal right.

$324. Agreements not within the Act.-Agreements of manufacturers or dealers with their customers for the preven tion of dealing with competitors by such customers through the payment of rebates to them conditioned on their not so dealing (Whitwell v. Continental Tobacco Co., 60 C. C. A. 290, 125 Fed. Rep. 454), and agreements with customers restricting sales to certain territory (Phillips v. lola Portland Cement Co., 61 C. A. A. 19, 25 Fed. Rep. 593), nor the incidental restraint of trade resulting from the purchase of competitors (In re Greene, 52 Fed. Rep. 104), are not within the Act. See also In re Corning, United States v. Greenhutt, 51 Fed. Rep. 205, and In re Tyrrell, 51 Fed. Rep. 213.

An agreement between all the lumber dealers of a city to

raise and maintain the price of lumber to local customers and to refuse to sell to consumers who purchased supplies from outside mills, some of such mills supplying the local market being situated in another state, was held in Ellis v. Inman, 124 Fed. Rep. 956, not to be in violation of the Anti-Trust Act, as the effect upon interstate commerce was indirect and incidental only.

In Dueber Watch Case Manufacturing Company v. Howard Watch & Clock Co., 55 Fed. Rep. 851 (S. Dist. of N. Y.), affirmed, though on different grounds and with dissent, by the Circuit Court of Appeals in 66 Fed. Rep. 637, an agreement by a number of manufacturers and dealers in watch cases to fix an arbitrary price on their goods, and not to sell the same to any one buying watches of the plaintiff, was held not violative of the statute, there being no averment of absorbtion, or intention to absorb or control the entire market or any large part thereof.

This case it will be observed was decided prior to the definite construction of the Act by the Supreme Court.

§ 325. Certain agreements not to enter into competition not within the Act.- In Booth v. Davis, 127 Fed. Rep. 875, the Circuit Court for the eastern district of Michigan held that the act of July 2, 1890 had no application to a contract by which the stockholders of a corporation engaged in dealing in fish at different places in consideration of the business and good will of the company agreed not to enter into competition in such business for a term of ten years. The Court said the contract was based upon a good consideration and was lawful, and the right of the purchaser to enforce it could not be effected by the question whether he had conducted such business lawfully or not since its purchase. The purchaser therefore, the court ruled, had the right to enforce this covenant by injunction although the co-defendant had hired the defendant in ignorance of the contract and would suffer damages if deprived of his services.

§ 326. Labor combinations.-The act prohibits any combination or conspiracy in restraint of interstate commerce. It was held In re Debs, 64 Fed. Rep. 724, U. S. Cir. Ct. N. Dist. of Ill., in an exhaustive opinion, that the original design in the Act was to suppress trusts and monopolies in the form of trusts, which of course would be of a contractual character,

but that it was equally clear that a further and a more comprehensive purpose came to be entertained and was embodied. in the final form of the enactment. Combinations were condemned not only when they took the form of trusts, but in whatever form found, if they be in restraint of trade, and that was the effect of the words " or otherwise."

The Debs case was taken to the Supreme Court, where the judgment of the Circuit Court was affirmed, 158 U. S. 564, 39 L. Ed. 1092, on the broader ground of the general power of the Federal Government in respect to interstate commerce. The court said however that this was not because it differed from the Circuit Court in its construction of the statute of 1890.

In United States v. Workingmen's Amalgamated Council of New Orleans, 54 Fed. Rep. 994, the United States Circuit Court of Louisiana held that combinations of laborers as well as of capitalists in restraint of interstate commerce was violative of the Act, and that it was no defense that the origin and general purpose of a strike were innocent and lawful, if they had been turned into an unlawful purpose for the restraint of interstate and foreign commerce, and that a general strike for the discontinuance of labor in all departments of business, including interstate and foreign commerce, enforced by violence and intimidation for the sake of enforcing the employment of none but union men, was unlawful and properly enjoined. See also Waterhouse v. Comer, 55 Fed. Rep. 149; United States v. Elliott, 64 Fed. Rep. 27, Phillips, J. in western district of Missouri; United States v. Agler, 62 Fed. Rep. 826, Baker, J., in District of Indiana; Thomas v. Railroad Co., 62 Fed. Rep. 803, Taft, J., in southern district of Ohio; Toledo, etc. R. Co. v. Pennsylvania Co., et al, 54 Fed. Rep. 730, Taft, J., in northern district of Ohio; Same v. Same, 54 Fed. Rep. 746, Ricks, J. Charge to Grand Jury by Grosscup, J., 62 Fed. Rep. 828 and by Ross J., 62 Fed. Rep. 834. See supra, chapter IV; also sections 8 and 10 Interstate Commerce Act.

The contrary view was taken in United States v. Patterson, 55 Fed. Rep. 605; but with the exception of this decision the ruling in the Debs case was followed by the other Circuit Courts.