EDWIN BURRITT SMITH.

"(4.) This grant is primae impressionis, for no such was ever seen to pass by letters patents under the great seal before these days, and therefore it is a dangerous innovation, as well without any precedent or example as without authority of law or reason."

The court went on to say that monopolies have, as inseparable incidents, the following:

"(a.) That the price of the same commodity will be raised; for he who has the sole selling of any commodity may and will make the price as he pleases.

"(b.) That after the monopoly granted, the commodity is not so good and merchantable as it was before; for the patentee, having the sole trade, regards only his private benefit, and not the commonwealth.

"(c.) It tends to the impoverishment of divers artificers and others, who before, by the labor of their hands in their art or trade, had maintained themselves and their families, who now, will of necessity be constrained to live in idleness and beggary."

It appears from the conclusion of the original report of this great case that "Our Lord, the king that now is, in a book which he in zeal to the law and justice, commanded to be published Anno 1610, entitled 'A Declaration of His Majesty's Pleasure, etc.' p. 13, has published that monopolies are things against the laws of this realm; and therefore expressly commands that no suitor presume to move him to grant any of them."

A few years later, in 1623, in order to deliver the crown as well as suitors for patents from all further temptation in this direction, Parliament by statute against "monopolies❞ provided, in part, as follows:

"That all monopolies, and all commissions, grants, licenses, charters and letters patents heretofore made or granted or hereafter to be made or granted, to any person or persons, bodies politic or corporate whatsoever, of or for the

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sole buying, selling, making, working or using of anything within this realm or the dominion of Wales, or of any other monopolies, or of power, liberty, or faculty to dispense with any others, are altogether contrary to the laws of this realm and so are and shall be utterly void and of none effect and in no wise to be put in use or execution."

Parliament had, by statute of 5 & 6 Edward VI., prohibited "engrossing." To engross, was to get possession or control, by buying, contracting or promise-taking, of the whole or a considerable portion of any necessary of life in the nature of provisions, with intent to resell in the same form. The purpose of the statute was to do away with middlemen, on the assumption that they enhanced the price of the necessaries of life. By the same statute the similar offenses of "forestalling" and "regrating" were made penal.

Under these and subsequent statutes the line between what was legal and what was criminal became exceedingly vague and uncertain. The fear of combinations to increase prices led to the enactment of hundreds of general and special statutes. The statute of George I., known as the Bubble Act, made it a crime, punishable with death and confiscation of goods, to form voluntary associations and issue transferable shares therein. By statute of 17 George III., combinations by partnership or otherwise for the purchase or sale of brick were declared illegal; and by that of 28 George III., it was inade unlawful for five or more persons to unite in covenant or partnership to buy coals for sale. Similar statutes made criminal all kinds of associations of business and workingmen, on the theory that by association prices and wages would be increased and the industry of individuals injured. Had it been possible strictly to enforce these acts, middlemen would have been suppressed and all association of effort and capital destroyed. The failure of such legislation to take "good effect" is confessed in the preamble to the act of 5 & 6 Edward VI., in these words:

EDWIN BURRITT SMITH.

"Albeit divers good statutes heretofore have been made against forestallers of merchandise and victuals, yet for that good laws and statutes against regrators and ingrossers of the same things have not been heretofore sufficiently made and provided, and also for that it hath not been perfectly known what person should be taken for a forestaller, regrator or ingrosser, the said statutes have not taken good effect, according to the minds of the makers thereof."

The public policy which it was sought to express by these enactments was then, and still remains, difficult of exact definition. From that day to this the limits of combination and the extent of business enterprise under a single management within the line of legality have depended on the individual views of public policy held by the judges. In early days it was held illegal to contract for 258 acres out of 30,000 acres of growing hops. The purchase of 8,000 bushels of corn, of 3,200 bushels of wheat, of 1,600 bushels of oats, of 672 pounds of butter, of 18,432 pounds of cheese, of 100 bushels of salt, of "a great number of wild fowl," and of "a great quantity of straw and hay" were held by the courts to be violations of the statutes. From these early judgments, affecting small and usually local transactions, there is a long line of decisions against acts held to be in contravention of public policy. While the courts have never been able to fix the limits of public policy, and while complaint is sometimes made of the supposed increasing frequency with which they resort to it as authority for refusing to give effect to contracts, the rule is finally fixed that undertakings which have a tendency to be, or are clearly injurious to the public shall be held void and refused the sanction of the courts. The element of public policy in the law of contracts has its origin in the very sources of the common law.

The rule of public policy upon which rests the numerous decisions in both England and America, pronouncing illegal or criminal combinations and agreements for monopolies or in

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restraint of trade, is of necessity a flexible and changing rule of decision. In the words of Lord St. Leonards, “it has been restrained and limited and qualified up to this very hour." Egerten v. Brwnlow, 4 H. L. Cas., 237. The purchase of a few thousand bushels of grain, a few hundred pounds of butter, or even "a great quantity of straw and hay," is no longer illegal anywhere. Free trade, even in the necessaries of life, has been found conducive to lower rather than higher prices. But, both by legislation and judicial decisions in the United States, the attempt is still strenuously made to place limits upon combinations to monopolize industry and trade.

The tendency in England has long been towards greater toleration of combinations for business purposes. Corporations and joint stock companies, organized to conduct business on a large scale, are now regarded as legitimate enterprises. Many of the old statutes in regard to trade and espe cially that of 5 & 6 Edward VI., prohibiting "engrossing" and "regrating" have been repealed. The recent case of Mogul Steamship Company vs. McGregor, L. R. 23, Q. B. Div., 598, 617, is regarded as a departure from the earlier authorities and in favor of a greater toleration of combinations to monopolize industry and trade. The defendants, who were firms of ship owners, engaged in the China trade, formed themselves into an association to control the trade and maintain rates. The plaintiffs, being ship owners, engaged in the same trade, were excluded from the association. The court held that the association was not illegal, although it appeared that it gave rebates to merchants who dealt exclusively with its members, sent ships to compete with plaintiff's ships, temporarily lowered freights, indemnified others to compete with plaintiffs and dismissed agents who had acted for both parties. As was said by the court: "The means adopted were competition carried to the bitter end." Lord Morris, on the hearing in the House of Lords, said:

EDWIN BURRITT SMITH.

"What one trader may do in respect of competition, a body or set of traders can lawfully do; otherwise, a large capitalist could do what a number of smaller capitalists, combining together, could not do, and thus a blow would be struck at the very principle of co-operation and joint stock enterprises. I entertain no doubt that a body of traders, whose motive object is to promote their own trade, can combine to acquire, and thereby in so far to injure the trade of competitors, provided they do no more than is incident to such motive object, and use no unlawful means."

This great case has settled the law of England and made it there "perfectly legitimate to combine capital for all the mere purposes of trade, for which capital may, apart from combination, be legitimately used."

Fry, J., pronounces the repeal in 1772 of the early statutes against engrossing and regrating "a confession of failure in the past, the indication of a new policy for the future;" and adds "Thus the stream of modern legislation runs strongly in favor of allowing great combinations of persons interested in trade, and intended to govern or regulate the proceedings of large bodies of men, and thus necessarily to interfere with what would have been the course of traffic if unaffected by such combinations."

The legal pathway of the monopoly combination has not been made so straight and plain in America as it thus appears to be in England. In our several jurisdictions, Federal and State, by the common law and numerous statutes, we still seek to suppress monopolies and conspiracies in restraint of trade. The courts when called upon have pronounced invalid all combinations that would have been illegal at common law. Trusts, associations and agreements have been declared void in almost every jurisdiction. The results have not been satisfactory. Great enterprises have been conducted in defiance of law. Adverse decisions have usually led to evasions, often to the formation of monopoly corporations. With decisions and statutes in endless profusion and hopeless confusion, the trust has flourished here as nowhere else in the world. It is