THE SHERMAN LAW An almost opposite contention was that a contract regulating transportation only was not a regulaion of trade. This was first made in the Trans-Missouri case (supra), where it was argued that Congress did not intend to include a regulation of railroads and transportation, and also that the con tention is born out by the fact that rail road regulation was embraced in a previous statute, the Interstate Commerce Act. But the answer is as simple as it is conclusive, that persons engaged in the business of transportation were, on principal and author ity, engaged in commerce; therefore an agreement between them as to rates was an agreement directly and immediately affect ing commerce. " Railroad companies are instruments of commerce and their busi ness is commerce itself " (p. 312.) Since the Act of 1890 was expressly aimed at restraints of commerce, it was held imma terial that transportation companies clearly included within its terms were also affected by the previous statute. This doctrine is so briefly stated not because of minor im portance but because it is so indubitably sound in principle. Most often the question of whether or not the element of restraint of trade is so involved in a contract as to bring it within the statute arises and is discussed with the constitutional objection, that the contract does not affect interstate trade. Particularly was this true in Hopkins v. United States {171 U.S. 578), where a combination of com mission merchants, dealing in live stock at Kansas City, was held not in restraint of interstate commerce, because their busi ness was local; they performed services upon an article of interstate commerce, but were not themselves engaged therein. The court laid down this doctrine as decisive of the case — " There must be some direct or immediate effect upon interstate com merce in order to come within the act" (p. S92)- A like conclusion was reached in Anderson v. United States (171 U. S. 604), upon very similar facts.
193
The two cases last cited are to be contrasted with that of Montague & Co. v. Lowry (193 U. S. 38). Leading dealers in tiles, principally in California, entered into a combination with manufacturers of these articles, without the state, by which all persons not members of the association were practically excluded from trade with mem bers. The association had power of arbi trary refusal of applications for membership, and by its by-laws excluded the smaller dealers, of which the plaintiff was one. The plaintiff sued a member of the association for threefold damages under the Act of 1890. The Court again applied the test we have suggested, that of the directness of effect upon commerce, and held that by narrowing the market open to the plaintiff, " the agree ment directly affected and restrained inter state commerce" (p. 48). Upon the authority of this and other cases above discussed, the Supreme Court on the 3rd of February, 1908, held a com bination of union hatters and other labor unionists to boycott a manufacturer of hats who refused to unionize his shop, to be within the condemnation of the Act. The Court were unanimous in holding that since the combination " essentially obstructs the free flow of commerce between the States, or restricts in that regard, the liberty of a trader to engage in business " it was clearly and without further demonstration made illegal by the Act. (Loewe v. Lawlor, "Danbury Hatters Case," not yet reported.) This case well exemplifies a large class of cases arising under the Act, in that the gist of the wrong complained of here was the concerted action, the " combination," rather than a contract. ANCILLARY CONTRACTS IN RESTRAINT OF TRADE. Recalling the distinction at common •law between ancillary contracts in restraint of trade, such as that protecting the vendee of a business with its goodwill, and those having 'for their chief or only purpose a
