monopoly in the strict sense of sole control, increases the exercise of the police power. This opposition is expressed in decisions under the common law against monopoly; in constitutions and in statutes.

General or unreasonable contracts in restraint of trade are void at common law. (a) Contracts with restrictive. associations binding not to buy or not to sell are void. Thus in the case of Raymond vs. Leavitt the plaintiff was told that he must use other than legal means to recover money loaned to a combination for the purpose of controlling the Detroit wheat market.1 (b) Agreements between competitors to avoid competition by limiting business or fixing prices are void. New York (1847-8) held such agreements among canals illegal. Such agreements to control coal supplies were held illegal in Pennsylvania and Ohio.3 Combinations of corporations to place their shares in trust with a managing board, were held illegal because ultra-vires, corporations having no right to form partnerships. Accordingly the Sugar trust and the Standard Oil trust were declared illegal. The stockholding corporation which followed the trust is also illegal. "There is no magic in a corporate organization which can purge the trust scheme of its illegality."

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Many state constitutions declare against monopolies. Thus the Maryland constitutions from 1776 to the present declare that monopolies are "odious and contrary to the genius of a free government.' Massachusetts said in 1780: "No man or corporation or association of men have any other title to obtain advantage or particular and exclusive privileges distinct from those of the community

1 Freund, op. cit., p. 337.

3 Ibid., p. 343.

2 Ibid., p. 342.

4 Ibid., p. 345.

5 Distilling and Cattle Feeding Co. vs. People, 156 Ill., 448.

than what rises from the consideration of services rendered to the public." Democracy instinctively opposed these subversions of popular privilege. These declarations were followed by the prohibition of hereditary emoluments, honors and privileges. In that time men wanted freedom from control, not freedom to control as they did later when they forgot English tyranny.

Since 1870 the new state constitutions forbid combination of competing railroad and telegraph lines. Before 1870 only one constitution, that of Michigan, contained an antitrust clause such as is now common. After the Inter State Commerce Act prohibiting pooling by railroads, about seventy laws were passed from 1889 to 1899 in twentyseven states for the suppression and punishment of monopoly. These statutes were directed against the creation or carrying out of monopolies in trade, the reduction of production or of price, the prevention of competition, the fixing of standard prices, the making of contracts not to sell below a certain price. Twenty-one states made it criminal for two or more to enter into any agreement-regardless of whether it were reasonable or unreasonable-whereby free competition in production and sale was prevented. Seventeen states made it criminal conspiracy for two or more persons to agree to regulate the quantity or price of any article to be manufactured, mined, produced or sold, regardless of whether prices were raised or lowered. The courts generally uphold such legislation. Most of these acts were nullified, in spite of a few enforcements, by the rule

1 Horack, Industrial Corporations, p. 18.

2 Freund, op. cit., p. 331.

3 Montague, Trusts, pp. 131-2.

4 Jenks, in Industrial Commission Report, ii, p. 87.

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of comity whereby the corporations of the liberal states could do business in spite of the law. The federal antitrust law of 1890 sought to check this, making attempts to monopolize interstate trade punishable by fines and imprisonment, with three-fold damages to the aggrieved party. The federal attorney can institute proceedings against the corporation and restrain it by injunction. Most of the suits under this law have failed. The Supreme Court in the first case refused to restrain the Sugar Trust as being engaged in production and not in interstate trade.1 But the law was applied to an association of railroads to "maintain reasonable and just rates," "to prevent unjust discrimination" and to establish joint traffic agencies, "to secure to each road an equitable proportion of the competitive traffic." Six companies engaged in the manufacture of cast iron pipe, made an agreement that there should be no competition between them in any of the states and territories mentioned in the agreement, thirty-six in all. This was enjoined as a contract in restraint of trade.3 An attempt to combine the Great Northern and Northern Pacific railroads under a New Jersey "holding corporation" dating from 1901, in order to avoid competition was finally frustrated by the Supreme Court (March 14, 1903), although similar railroad combinations have been left unchanged.

2

Standard Oil has had much legal attention. Thus suit was brought in Kansas (1905) to appoint a receiver to oust the corporation from the state. The legislature passed bills aimed at the trust: one to build a branch penitentiary

1 U. S. vs. E. C. Knight Co., 156 U. S., I (1894).

2 U. S. vs. Trans-Missouri Freight Association, 166 U. S., 290 (1897), and U. S. vs. Joint Traffic Association, 171 U. S., 505 (1899).

3 Addyston Pipe and Steel Co. vs. U. S., 175 U. S., 211 (1899).

for the refining of oil (declared unconstitutional); another declaring pipe lines common carriers and a third prohibiting discrimination in rates by railway and pipe lines. Illinois investigated the pipe lines. The attorney general of Missouri obtained a temporary injunction restraining the company from doing business in Missouri.

A bill in equity accused the "beef trust" of an alleged illegal combination, perpetrating fraud on the people by exercising their power to raise unduly the price of dressed beef; declaring that they were oppressing and grievously injuring the farmer by forcing him to sell his livestock at prices unprofitable to him and by issuing instructions to their agents not to compete in bidding after prices have been unduly bid up at various points and the owners of livestock have been induced to make large shipments to those points, and declaring that independent packers were being forced to the wall by the lowering of prices where competition was keen, the losses there being recouped by raising prices where the field had been conquered. This accusation was sustained and the trust was enjoined. Upon disobedience an investigation was ordered and indictments were brought against twenty-six officials. The Bureau of Corporations having made an investigation collecting information from the packers, they escaped on the ground of "immunity," through the compulsion to testify against themselves. In a recent ruling (March 12, 1906) the Supreme Court has decided that no corporation as such is entitled to any of the immunity of natural persons from furnishing evidence. against itself by producing or giving access to its books, accounts, etc. Congress also restricted the benefits of immunity to those who are compelled to testify under oath or produce evidence, and the information derived from them. may be used in securing the indictment or prosecution of others who have violated the law or of corpora

tions with which they are connected or whose affairs they have revealed.

"Liberty of contract does not imply liberty in a corporation or individuals to defy the national will, when legally expressed." In the sentiment and legislation on this subject two prevalent ideas seem to be, that the possibility of inordinate accumulation must be preserved, while by some magic no one shall be oppressed by it; the other is a pretty settled conviction that most combinations may be expected to take unfair advantage of weaker competitors, without personal dishonor to the men composing the corporation. This covetousness and this cynicism are the fruits of unrestrained individualism.

2

Besides the opposition to monopoly as such the police power is much engaged in regulation of the business of corporations. "No legislature can bargain away the public health or public morals. The people themselves cannot do it, much less their servants. The police power of the state which rests largely on legislative discretion cannot be parted with." 1 A state may compel a railroad to operate its franchise. The state may dissolve it for the misuse or the nonuse of its powers. Contracts disabling a corporation from performing its duty to the public are void.* "When one devotes his property to a use in which the public has an interest he in effect grants to the public an interest in that use and must submit to be controlled by the public for the common good to the extent of the interest he has thus created." " This was in sustaining the control of

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3

1 Stone vs. Miss., 101 U. S., 819.

2 Cook, W. W., Corporations, p. 790.

8 Ibid., p. 703.

Clark, W. L., Corporations, p. 288.

Munn vs. Ill., 94 U. S., 113. Freund, op. cit., p. 380.