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March 13, 1908 (Session Laws, 1908, c. 8, p. 38), not only was the legality of these last mentioned combinations reaffirmed, but they were protected by injunction, and the sale by or purchase from the owner contrary to his agreement was punished by a fine.
When the Court of Appeals came to deal with the act of 1890, the constitution of 1891, and the act of 1906, it reached the conclusion, which now may be regarded as the established construction of the three taken together, that by interaction and to avoid questions of constitutionality, they were to be taken to make any combination for the purpose of controlling prices lawful unless for the purpose or with the effect of fixing a price that was greater or less than the real value of the article. Owen County Burley Tobacco Society v. Brumback, 128 Kentucky, 137, 151. Commonwealth v. International Harvester Co. of America, 131 Kentucky, 551, 568, 571-573. International Harvester Co. of America v. Commonwealth, 137 Kentucky, 668. The result seems to be that combinations of tobacco growers are held to do no more than restore an equilibrium that has been disturbed by a combination of buyers, Owen County Burley Tobacco Society v. Brumback, 128 Kentucky, 137, 152; Collins v. Commonwealth, 141 Kentucky, 564, whereas if prices rise after a combination of manufacturers it very nearly is presumed that the advance is above the real value and that there is a crime. International Harvester Co. of America v. Commonwealth, 144 Kentucky, 403, 410, 411.
The plaintiff in error contends that the law as construed offers no standard of conduct that it is possible to know. To meet this, in the present and earlier cases the real value is declared to be 'its market value under fair competition, and under normal market conditions.' 147 Kentucky, 566. Commonwealth v. International Harvester Co. of America, 131 Kentucky, 551, 576. International Harvester Co. of America v. Commonwealth, 137
Kentucky, 668, 677, 678. We have to consider whether in application this is more than an illusory form of words, when nine years after it was incorporated, a combination invited by the law is required to guess at its peril what its product would have sold for if the combination had not existed and nothing else violently affecting values had occurred. It seems that since 1902 the price of the machinery sold by the plaintiff in error has risen from ten to fifteen per cent. The testimony on its behalf showed that meantime the cost of materials used had increased from 20 to 25 per cent. and labor 27 per cent. Whatever doubt there may be about the exact figures we hardly suppose the fact of a rise to be denied. But in order to reach what is called the real value, a price from which all effects of the combination are to be eliminated, the plaintiff in error is told that it cannot avail itself of the rise in materials because it was able to get them cheaper through one of the subsidiary companies of the combination, and that the saving through the combination more than offset all the rise in cost.
This perhaps more plainly concerns the justice of the law in its bearing upon the plaintiff in error, when compared with its operation upon tobacco raisers who are said to have doubled or trebled their prices, than on the constitutional question proposed. But it also concerns that, for it shows how impossible it is to think away the principal facts of the case as it exists and say what would have been the price in an imaginary world. Value is the effect in exchange of the relative social desire for compared objects expressed in terms of a common denominator. It is a fact and generally is more or less easy to ascertain. But what it would be with such increase of a never extinguished competition as it might be guessed would have existed had the combination not been made, with exclusion of the actual effect of other abnormal influences, and, it would seem with exclusion also of any increased
efficiency in the machines but with inclusion of the effect of the combination so far as it was economically beneficial to itself and the community, is a problem that no human ingenuity could solve. The reason is not the general uncertainties of a jury trial but that the elements necessary to determine the imaginary ideal are uncertain both in nature and degree of effect to the acutest commercial mind. The very community, the intensity of whose wish relatively to its other competing desires determines the price that it would give, has to be supposed differently organized and subject to other influences than those under which it acts. It is easy to put simple cases; but the one before us is at least as complex as we have supposed, and the law must be judged by it. In our opinion it cannot stand.
We regard this decision as consistent with Nash v. United States, 229 U. S. 373, 377, in which it was held that a criminal law is not unconstitutional merely because it throws upon men the risk of rightly estimating a matter of degree-what is an undue restraint of trade. That deals with the actual, not with an imaginary condition other than the facts. It goes no further than to recognize that, as with negligence, between the two extremes of the obviously illegal and the plainly lawful there is a gradual approach and that the complexity of life.makes it impossible to draw a line in advance without an artificial simplification that would be unjust. The conditions are as permanent as anything human, and a great body of precedents on the civil side coupled with familiar practice make it comparatively easy for common sense to keep to what is safe. But if business is to go on, men must unite to do it and must sell their wares. To compel them to guess on peril of indictment what the community would have given for them if the continually changing conditions were other than they are, to an uncertain extent; to divine prophetically what the reaction of only partially deter
minate facts would be upon the imaginations and desires of purchasers, is to exact gifts that mankind does not possess.
MR. JUSTICE MCKENNA and MR. JUSTICE PITNEY dissent.
KEOKEE CONSOLIDATED COKE COMPANY v.
SAME v. KELLY.
ERROR TO THE SUPREME COURT OF APPEALS OF THE STATE OF VIRGINIA.
Nos. 372, 373. Submitted May 7, 1914.-Decided June 8, 1914.
This court does not go behind the construction given to a state statute by the state courts.
A state statute aimed at an evil and hitting it presumably where experience shows it to be most felt is not unconstitutional under the equal protection provision of the Fourteenth Amendment because there might be other instances to which it might be equally well applied.
It is for the legislature to determine to what classes a police statute shall apply; and unless there is a clear case of discrimination the courts will not interfere.
Section 3 of Chapter 391, Virginia Laws of 1888, reënacting the act of 1887 aimed at the evil of payment of labor in orders redeemable only at the employers' shops and forbidding certain classes of employers of labor to issue any order for payment thereto unless purporting
234 U. S.
Argument for Plaintiff in Error.
to be redeemable for its face value in lawful money of the United States, is not an unconstitutional denial of equal protection of the law because it does not apply to other classes of employers who also own shops and pay with orders redeemable in merchandise.
THE facts, which involve the constitutionality of a statute of Virginia providing for method of payment of employés of certain industries, are stated in the opinion.
Mr. J. F. Bullitt and Mr. R. T. Irvine for plaintiff in
The Virginia act is repugnant to the Fourteenth Amendment of the Constitution of the United States, nor is it a valid exercise of police power.
The act is not constitutional; it does not embrace all of a class.
The act is class legislation even though it should be held to be a police regulation.
If an act is repugnant to the Constitution, it is not saved by the police power doctrine. The usual statement of the doctrine is too broad.
The burden is on plaintiffs to show that the act is within the police power.
The act would injure rather than benefit employés as well as employers.
In support of these contentions, see Virginia Code (Pollard), § 3657-d, cl. 1, 2, 3; Avent-Beattyville Coal Co. v. Commonwealth, 28 L. R. A. 273; Braceville Coal Co. v. People, 147 Illinois, 66; Frorer v. People, 141 Illinois, 171; Lockner v. New York, 198 U. S. 45; Millett v. People, 117 Illinois, 294; Peal Coal Co. v. State, 36 W. Va. 802; State v. Goodwell, 10 S. E. Rep. 285; State v. Loomis, 115 Missouri, 307; State v. Missouri Tie Co., 181 Missouri, 536; Cooley's Const. Lim. (7th Ed.) 561; Connolly v. Union Sewer Pipe Co., 184 U. S. 540; State v. Froehlich, 115 Wisconsin, 32; S. C., 91 N. W. 115; People v. Jackson Road Co., VOL. CCXXXIV-15