§ 126. Agreement to fix wages.-In connection with agreements to fix price we may profitably consider the true basis of the doctrine of the invalidity of agreements to fix wages, that is, the price of labor. The doctrine was originally established as an application of the general law of conspiracy. So far as it rests on the ground, it has, as we have elsewhere seen, been repudiated, if indeed it is to be regarded as ever having existed. But there seems to be ground for saying that the validity of an agreement to fix wages, that is, the price of labor, should be determined by whatever test is applicable to other agreements to fix price.47 In this view, there is nothing inherently illegal in

an agreement to fix wages, though it may be otherwise where the agreement is an incident of an illegal restriction upon competition. That is to say, the employees or other parties to the agreement may be in substantial control of the supply of the particular kind of labor affected by the agreement, 18 thus of an agreement among all the railroad employees within a given district.

48

§ 127. Deterioration in quality.-What has just been said as to fixing of price as an element of illegality of a restriction upon competition is applicable to the second so-called “inseparable incident," deterioration in quality. That is to say, while deterioration in quality is doubtless sometimes an incident, it certainly is not an inseparable incident of a monopoly resulting from the acts of individuals. And not only is deterioration in quality not a necessary incident of an illegal restriction upon competition, but it furnishes no adequate test of the legality of such a restriction.

§ 128. Forcing out of, or preventing from entering employment. What has just been said as to two so-called “inseparable incidents" is applicable to a third not commonly relied on, but still one on which considerable stress has been laid, that is, the injury to those forced out of or prevented from entering the same line of business. 50 It may be a question for the econo

combinations universal. It is true

that no great danger is to be apprehended, on account of the impracticability of such universal combinations. But if universally, or even generally, entered into, they would be prejudicial to trade and to the public, they are wrong in each particular case." See articles in 16 Harv. Law Rev. 236 (19023) by E. F. McClennen; 20 Id. 253, 345, 428 (1907) by Jeremiah Smith.

48 See, under Mich. (§ 217), Hunt v. Riverside Co-operative Club, 140 Mich. 538; 104 N. W. 40; 112 Am. St. Rep. 420 (1905). Compare under Iowa (§ 211).

49 In Darcy v. Allein, 11 Coke, 84b, it was said that, as another "inseparable incident," "after the monopoly granted, the commodity is not so good and merchantable as it was before; for the patentee, having the sole trade, regards only his private benefit, and not the common wealth." See also People ex rel. v. American Sugar Refining Co., 7 Ry. & Corp. L. J. 83 (Super. Ct. San Francisco, 1890).

50 In Darcy v. Allein, 11 Coke, 84b, it was said that, as another "inseparable incident," "it tends to the impoverishment of divers artificers and others, who be

mist, rather than the jurist, whether, from the standpoint of the public interest, this injury is outweighed by benefits. With reference to such incident it has been said: 51 "The third objection, though frequently overlooked, is none the less important. A society in which a few men are the employers and the great body are merely employees or servants, is not the most desirable in a republic; and it should be as much the policy of the laws to multiply the numbers engaged in independent pursuits or in the profits of production, as to cheapen the price to the consumer. Such policy would tend to an equality of fortunes among its citizens, thought to be so desirable in a republic, and lessen the amount of pauperism and crime."

§ 129. Combination as element of illegality.-It scarcely needs pointing out that the existence of the element of combination in no way necessarily involves the existence of an illegal restriction upon competition. Otherwise every partnership, indeed, co-operation under any form, would be illegal.52 But it

fore, by the labor of their hands in their art or trade, had maintained themselves and their families, who now will of necessity be constrained to live in idleness and beggary; and the common law agrees also with the civil

law."

51 State ex rel. v. Standard Oil Co., 49 Ohio St. 137, 187; 30 N. E. 279, 290; 15 L. R. A. 145, 159; 34 Am. St. Rep. 541, 554 (1892), referring to the ground as stated in Darcy v. Allein, supra. Similar views were expressed in Lufkin Rule Co. v. Fringeli, 57 Ohio St. 596; 49 N. E. 1030; 41 L. R. A. 185; 63 Am. St. Rep. 736 (1898). So, in U. S. v. Trans-Missouri Freight Assoc., 166 U. S. 290, 324; 17 Supm. 540, 552; 41 L. Ed. 1007 (1897), was emphasized the public misfortune caused by the loss of the "services of a large number of small but independent dealers." See Harding v. Amer

ican Glucose Co., 182 Ill. 551, 604; 55 N. E. 577, 595; 64 L. R. A. 738, 759; 74 Am. St. Rep. 189 (1899); Chesapeake & O. Fuel Co. v. U. S., 115 Fed. 610, 623; 53 C. C. A. 256, 269 (6th C., 1902). For prohibition against acts designed to compel competitors "to go out of business," see under Ind. (§ 210).

52 See Fechteler v. Palm, 133 Fed. 462, 471; 66 C. C. A. 336, 345 (6th C., 1904). Thus a contract for exchange of freight was held not illegal, in Graham v. Macon, Dublin, etc., R. R. Co., 120 Ga. 757; 49 S. E. 75 (1904). The difficulty of establishing a sharp line of distinction in such cases, was seen in Marsh v. Russell, 66 N. Y. 288 (1876), where a distinction was taken between a partnership formed for the honest purpose of carrying on a joint business, with the incidental effect of preventing competition, and a partnership the primary

is not so generally and clearly understood that the element of combination is in no sense a necessary incident of such an illegal restriction. What is undoubtedly a prevalent impression to the contrary, fostered by the common use of the terms "combination," "conspiracy" and the like, as applicable to such restrictions, seems to result from the circumstance that such restrictions upon competition as have hitherto been subjected to judicial scrutiny, have ordinarily actually resulted from "combinations" or "conspiracies" among individuals, partnerships or corporations. But suppose the case of a corporation or mere individual obtaining the substantial control of the supply of a given commodity, the restriction thus produced is, in the view here taken, just as illegal as if it had resulted from a "combination" or "conspiracy." 53

object of which is to prevent competition. But this introduces the uncertain test of intent, as to which see § 9. In Ontario Salt Co. v. Merchants' Salt Co., 18 Grant (Ontario), 540, 544 (1877), the court answered the objection that an agreement among manufacturers of salt for sale of their stock through a common agency, tended to create a monopoly, by saying: "If the effect was to constitute a partnership, there can be nothing objectionable in the stipulation that all the salt produced-which is to form the partnership stock-should be sold through the agency of the trustees." Compare as to "pools," § 137. But that a secret partnership is illegal, if there is maintained the appearance of competition among the partners for the purpose of deceiving the public, see F irbank v. Leary, 40 Wis. 637, 643 '1876). See State v. Adams Lumber Co., 116 N. W. 302 (Supm. Ct. Neb., 1908), as to liability of association as a whole for acts of its members in restriction upon competition.

53 Thus in State v. Eastern Coal Co., 70 Atl. 1, 4 (Supm. Ct. R. I., 1908), in holding not illegal a combination to fix the price of coal, certain decisions discussed were distinguished on the ground of it there appearing that "the objects of the combinations criticised, if they could have been attained by individuals, would have been unlawful. the combination to secure these objects was criminal." See, however, opinions of Holmes and White, J.J., in Northern Securities Co. v. U. S., 193 U. S. 197; 24 Supm. 436; 48 L. Ed. 679 (1904); also BobbsMerrill Co. v. Straus, 139 Fed. 155, 191 (C. C. N. Y., 1905).

Hence

The assumption that combination is an essential element of an illegal f restriction upon competition is frequently manifest in the anti-trust acts. Thus in the frequent definition of a "trust" as a "combination," etc., for specified purposes; so in the use of such words as "confederation," "conspiracy," "contract,” “arrangement," and the like. See c. XX. For a good illustration of the

§ 130. What may be subject of illegal restriction; e. g., tangible commodities; services.-The doctrine of the illegality of restrictions upon competition has been more commonly applied to tangible commodities. In the anti-trust acts such commodities have been variously characterized, not only as "commodi-. ties," but as "merchandise," "produce," "products," "articles," "property," "article of trade," "article of commerce," "article of manufacture" and the like.54 And, although the doctrine has been more commonly applied to what is strictly or in a narrower sense a mere sale, it has a broader application.55 In the antitrusts acts have been characterized as within the doctrine "manufacture," "making," "mining," "exchange," "traffic," "production," "importation," "constructing," etc. But the doctrine is applicable not only to tangible commodities, but to services,56 thus notably that of transportation. The prohibition

effect of such assumption, see under Mich. (§ 217). As to meaning of "combination," see under Tex. (§ 232); of "combining," under N. Y. (§ 224). As to application of prohibition against "combination," etc., to mere arrangement between employer and employee, see Whitwell v. Continental Tobacco Co., 125 Fed. 454, 460; 60 C. C. A. 290, 296; 64 L. R. A. 689, 697 (8th C., 1903).

54 In some instances special classes of articles, agricultural, manufactured, or the like, are specified; so in some instances, articles of domestic production, in others imported articles. So frequently are specified particular commodities such as live-stock, grain, lumber, coal, machinery, etc. See c. XX.

55 That it is not confined to "transactions of trade and commerce strictly so called," see McCarter (Attorney General) v. Firemen's Ins. Co., 70 N. J. Eq. 291; 61 Atl. 705 (1905), where the question was as to rates of premium for insurance. In People v. Aachen & Munich

Fire Ins. Co., 126 Ill. App. 636 (1906), it was applied to a combination to fix rates of insurance.

56 Thus professional services. It was, however, said in Lohse Patent Door Co. v. Fuelle, 114 S. W. 997, 1002 (Supm. Ct. Mo., 1908), citing State ex rel. Star Publishing Co. v. Associated Press, 159 Mo. 410, 456; 60 S. W. 91, 104; 51 L. R. A. 151, 166; 81 Am. St. Rep. 368 (1901), that "at common law personal service-an occupation-could not be the subject of a monopoly." See under Iowa (§ 211). Compare the numerous prohibitions against combinations among railroad and other carriers, thus pooling combinations; so prohibitions relating to particular kinds of business, such as the express or insurance business, or that of gathering news items, loaning money, etc. See c. XX.

As to whether "commodity" as the term is used in a statute, includes service of transmission by telegraph, see under N. Y. (§ 224).