free the interest of the public was safe. The laws of trade, in connection with the rigor of competition, was all the guaranty the public required, but the secret combination created by the contract destroyed all competition and created a monopoly, against which the public interest had no protection.' The possibility that other business enterprises in the same pursuit may be set on foot to counteract the effect of a combination to control the market in a commodity will not relieve such combination of illegality. 'Craft v. McConoughy, 79 Ill. 346. People v. North River Sugar Ref. Co. 5 L. R. A. 387, 54 Hun, 354. CHAPTER XI. COMBINATIONS TO MONOPOLIZE. 55. Combinations in Various Disguises to Monopolize the Market 56. Union of Corporations in a Partnership to Suppress Competi tion. 57. Combination between Corporations without Partnership. -- 55. Combinations in Various Disguises to Monopolize the Market. These combinations assume various disguises. In some instances an association is formed for the manufacture of an article of ordinary domestic use. An enormous amount of capital is aggregated to purchase and absorb all manufactories of the article in the country and to prevent any other person or corporation from engaging in or carrying on the same, thereby preventing all competition in the sale of the article monopolized. Those manufacturers who will not enter into the scheme are bought out or crushed by temporarily supplying the market they cater to at prices below the cost of production. All who unite in the combination and all who are bought out are required to enter into bonds to the effect that they will not even indirectly engage in the production or sale of the article, nor aid nor encourage any one else to do so. All trade secrets are to be kept from the public and apprentices excluded from learning the art. Others proposing to engage in the production are frightened or bought off and the result is that one vast combination controls the production and sale of an article which may be used in every family, and perhaps necessary to the comfort and convenience of the people. Its price is thereafter to be fixed by the selfish greed of the combination. This price must not only pay an extravagant profit on production, but it must also reimburse the combination for all the money spent in the purchase of plants, and machinery, which the neces sity of paralyzing competition has induced, and which will thereafter be idle, if not destroyed. It must also repay the money expended to induce active labor to live thereafter in idleness, or in less remunerative occupation, and thus the public must pay not only an unreasonable profit upon the manufacture of the monopolized article, but must pay for the costly destruction of the implements of honest industry and the support of enforced idleness, and of an increased non-producing class. It must pay for the destruction of all the means it possessed to relieve itself from the impositions of the monopoly. When such a case was presented in the Supreme Court of Michigan in Richardson v. Buhl, 6 L. R. A. 457, 77 Mich. 632, and counsel on each side refused to raise the question of illegality, the court on its own motion took notice of the crime against the community and denied relief, declaring that courts will take notice on their own motion of illegal contracts which come before them for adjudication, and will leave the parties where they have placed themselves; that the organization of a corporation for the purpose of controlling the manufacture and trade in matches in the United States and Canada, by inducing all manufacturers of matches to enter into a combination securing to such corporation the whole control of the business, or by buying out those who would not so enter, and buying off any others who might propose to engage in the business, is an unlawful enterprise, being an attempt to create a monopoly; and that an agreement intended to aid in the formation and organization of an illegal corporation designed to secure a monopoly of a certain business by which, in consideration of indorsements and other financial aid to a shareholder to enable him to raise funds necessary to join the enterprise, the indorsers are to have a share of the net earnings of his stock, is void on grounds of public policy. It is true that the tendency of the union of private capital in corporate freedom, has been to promote competition in great undertakings, where combined wealth and energy are demanded. Vast enterprises, with attending risks and perils, are ventured on when the extreme limit of loss is only the corporate capital invested, with no hazard to private fortunes, and neither the fear of physical death, nor commercial or moral ruin deter the artificial being, if the prize at stake be sufficient. The results of such corporate activity and courage are the vast development of manufacturing, farming and mining interests and of carrier transportation. Working in harmony, the carrier transfers the product of the farm, the loom and the furnace to the most profitable market, and millions thus enjoy what, if individual enterprise were alone acting, the few only could share.' Universal distribution of production enlarges the market and promotes consumption. It reduces cost and it opens fields of new activity. It is to the freedom of corporate existence that much of the present commercial prosperity is owing. Like individual combination for lawful pursuit, corporate combination for like purposes is to be approved, and it is followed by equally beneficent results. Connecting lines of transportation by union in running arrangements, cheapens the tariff of charges. So long as competition is open, combination of individuals in partnership or corporateeffort is harmless to the public. But even competition may become in itself an evil, and pooling the earnings of competing roads, where the sole purpose is to prevent ruinous competition, and not attempting to increase the rate for transportation beyond a reasonable amount for the service rendered, is not in any true sense inimical to public policy. The charges for freight do not generally in fact seem to be regulated by the cost of the road or its equipment, but rather by the rate that can be paid profitably by the article transported to market. Where the purpose is honest and to save from destruction valuable property, through reckless competition, there can be no legitimate complaint against pooling the earnings of competing roads or of rival manufacturers.” But courts decline to enforce such pooling contracts, leaving the East India Co. v. Sandys, 10 How. St. Tr. 371; Ontario Salt Co. v. Merchants Salt Co. 18 Grant, Ch. U. C. 540; Mogul S. S. Co. v. McGregor, L. R. 15 Q. B. Div. 476; Wickens v. Evans, 3 Young & J. 318. Leslie v. Lorillard, 1 L. R. A. 456, 110 N. Y. 519. Manchester & L. R. Co. v. Concord R. Co. (N. H.) 9 L. R. A. 689; Kelsey v. Pfaudler P. F. Co. 45 Hun, 15; Gloucester I. & G. Co. v. Russia Cement Co. (Mass.) 12 L. R. A. 563; Letter of Blanchard, Chairman Central Traffic Asso. to Chairman U. S. Senate Committee on Interstate Commerce, 8 Ry. & Corp. L. J. 1; Benedict v. Western U. Teleg. Co. 9 Abb. N. C. 214; Union Mut. Ins. Co. v. Union Mills Plaster Co. 3 L. R. A. 90, 37 Fed. Rep. 286; Hare v. London & N. W. R. Co. 2 Johns. & H. 80; Lancaster &C. R. Co. v. North Western R. Co. 2 Kay & J. 293; Opinion Clarence A. Seward, 7 Ry. & Corp. L. J. 261, 5 Ry. & Corp. L. J. 213; Leslie v. Lorillard, 1 L. R. A. 456, 110 N. Y. 519; Ives v. Smith, 28 N. Y. S. R. 917: Pittsburg Carbon Co. v. McMillin, 53 Hun, 67: Metropolitan Teleph. & Teleg. Co. v. Domestic Teleph. & Teleg. Co. 44 N. J. Eq. 568; Facific Factory Co. v. Adler, 90 Cal. 110. Note to National Benefit Co. v. Union Hospital Co. (Minn.) 11 L. R. A. 437. parties to work out their own delivery from an engagement liable to abuse, and to be used as an instrument of oppression against the public.' The court will not assist the plaintiff to get payment for efforts to accomplish what the law declares should not be done." While it is justly urged that those rules which say that a given contract is against public policy, should not be arbitrarily extended so as to interfere with the freedom of contract,' yet, in the instance of business of such character that it presumably cannot be restrained to any extent whatever without prejudice to the public interest, courts decline to enforce or sustain contracts imposing such restraint, however partial, because in contravention of public policy. sor, An agreement or combination between sugar refining companies, creating a partnership for the purpose of monopolizing the manufacture and sale of refined sugar, being an illegal contract created for an unlawful object, will not be enforced by the courts.“ "Cases must be judged according to their circumstances," remarked Mr. Justice Bradley in Oregon Steam Nav. Co. v. Win87 U. S. 20 Wall. 64, 68, 22 L. ed. 315, 318, "and can only be rightly judged when the reason and grounds of the rule are carefully considered. There are two principal grounds on which the doctrine is founded that a contract in restraint of trade is void as against public policy. One is the injury to the public by being deprived of the restricted party's industry; the other is the injury to the party himself, by being precluded from pursuing his occu'Hoffman v. Brooks, 11 Week. L. Bul. 258; Texas & P. R. Co. v. Southern Pac. R. Co. 41 La. Ann. 970; Woodstock Iron Co. v. Richmond & D. Ertension Co. 129 U. S. 644, 32 L. ed. 819; Jackson v. McLean, 36 Fed. Rep. 213; Arnot v. Pittston & E. Coal Co. 68 N. Y. 558; Santa Clara Valley M. & L. Co. v. Hayes, 76 Cal. 387; Morris Run Coal Co. v. Barclay Coal Co. 68 Pa. 173; Craft v. McConoughy, 79 Ill. 346. Gibbs v. Consolidated Gas Co. 130 U. S. 396, 32 L. ed. 979. 'Stanton v. Allen, 5 Denio, 434; Grasselli v. Lowden, 11 Ohio St. 349; Hilton v. Eckersley. 6 El. & Bl. 47; Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666; McBernie v. White Lead Co. 9 Week. L. Bul. 310; Crawford v. Wick, 18 Ohio St. 190. This subject is much considered, and the authorities cited in West Virginia Transp. Co. v. Ohio River P. L. Co. 22 W. Va. 600; Chicago Gaslight & C. Co. v. People's Gaslight & C. Co. 11 West. Rep. 63, 121 Ill. 530; Western U. Teleg. Co. v. American U. Teleg. Co. 65 Ga. 160. 'Gray v. Oxnard Bros. Co. 31 N. Y. S. R. 968. |