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By the Act 12: Geo. III., chap. 71, A.D. 1772, the statutes as to forestalling, regrating, and engrossing were repealed. The intention evidently was both to repeal them, and to abolish the offenses.
The reason given for the repeal in the preamble of the Act is as follows: “Whereas it hath been found by experience, that the restraints laid by several statutes upon the dealing in corn, meal, flour, cattle, and sundry other sorts of victuals, by preventing a free trade in the said commodities, have a tendency to discourage the growth, and to inhance the price of the same ; wł
which statutes, if put in execution, would bring great distress upon the inhabitants of many parts of this Kingdom, and in particular upon those of the cities of London and Westminster.”
Although it was evidently the intention of the legislature, by this statute not merely to repeal the former statutes as to forestalling, regrating, and engrossing, but also to abolish the offenses, Lord Kenyon nevertheless held in Rex v. Waddington, 1 East, 167, that those offenses had been offenses at common law; and consequently that the offenses had not been abolished by the mere repeal of the statutes. To meet this situation, a later statute was passed, 7 & 8 Victoria, Cap. XXIV., A.D. 1844, which in express terms abolished the offenses. No authority exists, so far as I have been able to fir for this decision of Lord Kenyon. It is somewhat singular, too, that the original statutes creating those offenses should have been passed, if the offenses existed already. It is also very clear, that the lawyers who drafted the repealing act would have abolished the offenses, if they had supposed that the offenses still continued to exist at common law.
In Rex v. Waddington there was a remarkable array of counsel, including Erskine, for the prosecution ; and the indications are very strong, that the prosecution was merely the work of business rivals. The prosecution was not for conspiracy, but for the mere offense of engrossing, by a single individual. Lord Kenyon, in his opinion, dilated on the dreadful dangers from such practices on the part of single individuals. With the exception of this Waddington case, my examinations have failed to find any cases of trials for either of those antiquated offenses. It is, therefore, an accurate statement, that the statutes creating these offenses by individuals were virtually ignored, almost from the time of their passage. That fact admits of only one explanation, which is, that no practical injury ever resulted from the business of buying and selling at wholesale, which is invariably conducted with the intent of selling at an advanced price.
The same thing can be said as to combinations to put up the prices of merchandise on the part of several individuals in combination. Without doubt there were numberless instances of such combinations. Such combinations, too, under the statutes above mentioned were criminal offenses. But we find no records in the reports, of prosecutions for such offenses, unless Rex v. Norris, before cited, be such a case.(a) The evident reason is that such combinations did no harm.
With these repealing and abolishing statutes, the law in England was finally established, permitting any and all efforts to merely raise prices, whether of labor or merchandise, whether on the part of single individuals or individuals in combination, provided those efforts were limited to the prices of the labor and merchandise of the parties making the attempts, and provided also that the efforts were accompanied by no legal injury to others. Contracts of combination, to raise or maintain prices, or to prevent competition, were not enforced by the courts. But they were never held to be criminal. Nor were they held to be violations of the legal rights of other individuals.
As to such combinations, the most important and instructive case in the English reports, so far as my read
(a) Rex v. Norris, 2 Ld. Kenyon, 300.
ing goes, is the case of Mogul Steamship Company v. McGregor,(a) wherein the law as to contracts in restraint of trade had a more thorough discussion than in any other which has coine within my knowledge.
The action was brought against the combining parties as defendants, by the Mogul Steamship Company, the owner of a line of steamships which had been driven out of a contested field by the combination, to enjoin the further operation of the combination to the injury of the plaintiff. The cause came on for hearing in the first in. stance before Lord Chief Justice Coleridge, on a motion for an injunction. The injunction was refused, after elaborate argument by the leaders of the English bar, the present Lord Chief Justice Russell being leading counsel for the defense, Sir Henry James being the leading counsel for the complainant. Lord Coleridge's judgment was affirmed in the Court of Appeal, and afterward in the House of Lords. In the Court of Appeal the case was heard before Lord Esher, Master of the Rolls, with Judges Bowen and Fry, each of whom delivered an opinion. In the House of Lords opinions were delivered by Lord Halsbury, Lord Watson, Lord Bramwell, Lord Morris, Lord Field, and Lord Hannen; and there was a memorandum of concurrence by Lord Macnaghten. The Master of the Rolls alone dissented.
In all there were ten opinions, by the first jurists in England. It is seldom that any case has received a consideration so exhaustive. The principles and authorities of the English law bearing on the case were thoroughly examined, and carefully stated.
The point decided was the legality, under the English law, of a combination of shipowners, formed for the avowed purpose of controlling prices, and preventing competition-of preventing all competition between the parties combining, and destroying all competition by outsiders. It was, too, the case of a combination of com
(a) Law Rep. 21 Q. B. Div. 544, 23 Q. B. Div. 598, App. Cas. 1892, 25.
mon carriers, for the avowed purpose of absorbing, and controlling, the entire transportation of tea from Canton, and all the ports on the Hankow River, in China. The means to be used to accomplish that purpose included the fixing of rates by one common authority for all the combining owners, the boycotting of all outside competitors, the refusal to do business with parties who did business with any outside competitors, and the putting down of freights to any figure that might be necessary to drive away those competitors, with the intent to subsequently restore rates to a profitable figure after the suppression of the outside competition.
A few extracts from the opinions are here selected, in order to give an authoritative statement of the facts and the decision of the court.
The opinion of Lord Coleridge, C. J., was in part:
“ The plaintiffs are a company of shipowners trading, or desirous of trading, between Australia and this country, taking China by the way; and desirous in particular of sharing in the transport of what has been called the 'tea harvest,' the time of which is in the late spring and early summer months, and the places for loading which, as far as this case is concerned, are Shangbai at the mouth of the Yangtze-kiang and Hankow, a place about 600 miles up the stream of that great river. The defendants are a number of great shipowners, companies, and private partnerships, trading for the most part from this country to China and from China to this country direct, and who, being desirous to keep this very valuable trade in their own hands, and to prevent, if they can, the lowering of freights (the ruinous lowering as they contend), which must follow, as they say, from absolutely unrestricted competition, entered into what they call a conference for the purpose of working the homeward trade, by offering a rebate of 5 per cent. upon all freights paid by the shippers to the conference vessels, such rebate not to be paid to any shipper who shipped any tea at Shanghai or Hankow (the rebate was not confined to these ports, but I think that an immaterial circumstance) in any vessels but those belonging to the conference.
“The complaint, then, is this, that the defendants unlawfully combined or conspired to prevent the plaintiffs from carrying on their trade, that they did prevent them by the use of unlawful means in furtherance of such unlawful combination or conspiracy, and that from such unlawful combination or conspiracy therefore damage has resulted to the plaintiffs.
“ The defendants answer that reither was their combination unlawful in itself, nor were any unlawful means used in furtherance of it ; but that the damage, if any, to the plaintiffs was the necessary and inevitable result of the defendants carrying on their lawful trade in a lawful manner.
" These are the contentions on the two sides. Is there anything in the law applicable to this subject in which they are agreed ? In the statement of the law, as might be expected from the counsel who argued the case, there was often a close apparent agreement ; but when it came to the application of it, the same words were evidently not always used on both sides in the same sense. I have carefully read over again and considered the arguments, and it seems to me it will be better that I should endeavour to state what I conceive to be the law upon the matter in dispute, and then apply it to the facts before me, which, as most of them depended upon written documents, can hardly be said to have been much disputed.
“ It cannot be, nor indeed was it, denied that in order to found this action there must be an element of unlawfulness in the combination on which it is founded, and that this element of unlawful. ness must exist alike whether the combination is the subject of an indictment or the subject of an action. But in an indictment it suffices if the combination exists, and is unlawful, because it is the combination itself which is mischievous, and which gives the public an interest to interfere by indictment. Nothing need be actually done in furtherance of it. In the Bridgewater Case(1), referred to at the bar, and in which I was counsel, nothing was done in fact ; yet a gentleman was convicted because he had entered into an unlawful combination from which almost on the spot he withdrew, and withdrew altogether. No one was harmed, but the public offence was complete. This is in accordance with the express words of Bayley, J., in Rex v. De Berenger. (2) It is otherwise in a civil action : it is the damage which results from the unlawful combination itself with which the civil action is concerned. It is not every combination which is unlawful, and if the combination is lawful, that is to
(2) 3 M. & S. 67, at p. 76.