THE SHERMAN LAW ponding degree to restrain commerce; but surely no such identity will be pretended. Commerce is the interchange of commodities. Competition is one of its incidents only, and but an occasional incident. To identify anything with one of its occasional incidents would be an error. ... A restraint upon competition does not of necessity restrain trade, but may even promote trade. . . ." (43 L. ed. 267.) This contention, that a restraint of com petition is not necessarily a restraint of trade, is but a corrollary to the attempt to fasten the common law test of reasonableness upon the anti -trust legislation. Under the latter contention it had been argued that a restricting agreement to abate the evils of unrestrained competition imposed but a reasonable restraint on trade, under the former it was now argued that a restraint of competition merely was no (or no direct) restraint of trade. The same (alleged) economic facts were introduced under guise of this new contention as had been under the old. It is the theory of the writer that this change of the form of the monopolists' contention was induced, first, by the decisive disallowance of the test of reasonableness, and, second, by the intimation by the Supreme Court that the statute would not be applied unless the element of restraint of trade entered directly into the contract (vide infra). Ergo, said the monopolist, let us argue that our contract only in directly restrains trade. Therefore it was, in the writer's opinion, that Mr. Carter renovated and rechristened the old argu ment in favor of " reasonable restraints " to meet the supposed views of the court. The holding of the Supreme Court that this contention had necessarily been nega tived by the Trans-Missouri decision is consistent with this theory. Directly answering the contention we have quoted, the Court said : "The natural, direct and immediate effect of competition is, however, to lower rates, and to thereby increase the demand for
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commodities, the supplying of which in creases commerce, and an agreement whose first and direct effect is to prevent the play of competition restrains instead of pro moting trade and commerce. . . . An agree ment of the nature of this one, which directly and effectually stifles competition, must be regarded under the statute as one in restraint of trade, notwithstanding there are possi bilities that a restraint of trade may also follow competition. ..." (p. 577.) Thus it is, that however open to argu ment as a question of political economy may be the wisdom of unrestrained competi tion, the Supreme Court has made it a rule of law that any interference with the free play of competition in interstate trade, is an illegal restraint of trade under the anti trust Act of 1890. Another interesting phase of this question was presented in the case of United States v. Addyston Pipe and £teel Company (175 U. S. 211). The contract sought to be dissolved by the government divided among the six defendant corporations, manufactur ers, transporters and vendors of iron pipe, the territory of the United States for the purpose of bidding for contracts, and es tablished a system of determining among these six companies which one should be allowed to successfully bid for each contract offered. It was most ingeniously urged by the defendants that since but one contract could be awarded for the work proposed at any one place, and therefore but one person could in any event secure it by virtue of being the lowest bidder, the selection by the defend ants of- one of their number to make the lowest bid as among themselves could not operate as a restraint of trade, tha't the com bination affected only the selection of the lowest bidder and did not limit the number of contracts. Obviously, however, this argument ad mitted a restraint of competition, and the court therefore held it a restraint of trade. Said the court : "It is the effect of the combination, in limiting and restricting the right of each of
