case where the court, referring to the Standard Oil decision, said:

... it was pointed out that the generic designations of the first and second sections of the law, when taken together, embraced every conceivable act which could possibly come within the spirit or purpose of the prohibitions of the law, without regard to the garb in which such acts were clothed. That is to say, it was held in view of the general language of the statute and the public policy which it manifested there was no possibility of frustrating that policy by resorting to any disguise or subterfuge of forms, since resort to reason rendered it impossible to escape by any indirection the prohibition of the statute.

Under this view many practices, not only perfectly legal in themselves, but constituting part of a man's civil rights, have been held illegal when they caused or threatened results prohibited by the statute." Thus it is part of a man's civil rights

United States v. American Tobacco Co., 221 U. S. 106, at p. 180. Italics are author's.

'That the intent (as distinguished from the mere motive) may render otherwise innocent acts or practices illegal under the Sherman law is well established. Leading cases on this point are: Swift & Co. v. United States, 196 U. S. 375, at p. 396; United States v. Terminal Railroad Association St. Louis, 224 U. S. 383, at pp. 394395. United States v. Union Pacific R. R., 226 U. S. 61. In the Swift case Mr. Justice Holmes, speaking for the court, said (p. 396): “It is suggested that the several acts charged are lawful and that intent can make no difference. But they are bound together as the parts of a single plan. The plan may make the parts unlawful."

In the St. Louis Terminal R. R. case Mr. Justice Lurton, who wrote the opinion, said: "It is not contended that the unification of the terminal facilities of a great city where many railroad systems center is, under all circumstances and conditions, a combination in restraint of trade or commerce. Whether it is a facility in aid of interstate commerce or an unreasonable restraint forbidden by this court in the cases of The Standard Oil Company v. The United States, 221 U. S. I, and the United States v. The American Tobacco Company, 221 U. S. 106, will depend upon the intent to be inferred from the extent of the control thereby secured over instrumentalities which such commerce is under compulsion to use, the method by which such control has been brought about and the manner in which that control has been exerted."

In the United States v. Union Pacific R. R. Co., Mr. Justice Day, speaking for the court, said (p. 193): "In determining the validity of this combination we have a right to look also to the intent and purpose of those who conducted the transactions from which it arose and to the object had in view." The same point is made in

to dispose of his property in such assortments or selections and usually on such conditions as he sees fit. In the decree against the Tobacco Company, however, each of the fourteen companies created from the original was enjoined from making the sale to any jobber of any brand of any tobacco product manufactured by it conditional upon the purchase from the vendor of some other brand or product also manfactured or sold by the vendor "where the effect would be unduly to restrain or or monopolize commerce." To dispose of one's products at whatever price one sees fit is also part of one's civil rights, yet the defendants in the Powder Trust case were enjoined from offering customers of rival manufacturers better prices or terms of sale than they offered their established trade, where the purpose was unfairly to cripple or destroy the business of the rivals. Finally in the case of United States v. Keystone Watch Case Company 3 the right to select one's own customers was itself involved. In that case the Keystone Watch Case Company issued a circular announcing its intention to refuse to sell to jobbers who handled its competitors' goods. The court held that the effect of the threat in depriving competitors of their channels of distribution was an unlawful restraint of trade and that, in spite of the fact that the Keystone Company had a right to select its own customers, the discrimination for the above reason might be enjoined. This case is particularly important because it is a concrete illustration of the manner in which the right to select one's own customers may be used to restrain trade. By the simple method of refusing business relations with distributers who handle the goods of competitors, a well known and long established manufacturer may impose serious obstacles to a new competitor gaining access to the market.

Nash v. United States, in which the court, referring to the Standard Oil and American Tobacco Company cases, said: "Those cases may be taken to have established that only such contracts and combinations are within the act as by reason of intent or the inherent nature of the contemplated acts, prejudice the public interests by unduly restricting competition or unduly obstructing the course of trade." (Italics are author's.)

1 Reprinted in Stevens, Industrial Combinations and Trusts, p. 459.

* Ibid., p. 469.

218 Fed. 502.

It will be objected that the above interpretation of the statute brings it in conflict with the Fifth Amendment forbidding the deprivation of property without due process of law. Since the common law holds contracts and combinations in undue restraint of trade and monopolies contrary to public policy, it may be questioned whether the due-process clause protects the exercise of individual freedom when the intent or necessary effect of such exercise is to impose undue restraints of trade. The power of Congress over commerce necessarily gives Congress the authority to prohibit the exercise of individual liberty when the effect is directly and substantially, and not merely incidentally and collaterally, to interfere with interstate commerce.' To hold otherwise would be to permit individuals to restrain trade and thus to subordinate the power of Congress over commerce to that of private individuals. The cases of Adair v. United States and of Coppage v. Kansas,3 which may be cited as authority for the proposition that the right to refuse business relations may not be restricted, are not in point since they decide merely that the protection of union members from discrimination is not sufficiently an object of the public welfare to validate the restriction on the right to select one's own employees. It is well settled,

1 For a discussion of the power of Congress to restrict private rights under the commerce clause see United States v. Joint Traffic Association, 171 U. S. 505, at p. 572, and especially Addystone Pipe and Steel Company v. United States, 175 U. S. 221, at pp. 228-230. Although these cases had reference primarily to the right of freedom of contract, the language is equally applicable to the right to select one's customers since both rights are part and parcel of the same general right of liberty and the Fifth Amendment applies equally to them both. In the Addystone Pipe and Steel Co. case the court (at p. 230) said: ". . . we think the provision regarding the liberty of the citizen is, to some extent, limited by the commerce clause of the Constitution, and that the right to enact a law prohibiting the citizen from enter. ing into those private contracts, which directly and substantially and not merely indirectly, remotely, incidentally and collaterally regulate in a greater or lesser degree commerce among the States.

...

"We cannot so enlarge the scope of the language of the Constitution regarding the liberty of the citizen as to hold that it includes or that it was intended to include a right to make a contract which in fact restrained and regulated interstate commerce, notwithstanding Congress, proceeding under the constitutional provision giv ing to it the power to regulate that commerce, had prohibited such contracts." 2 208 U. S. 161.

3236 U. S. 1.

however, that the protection of trade from restraints and monopolistic practices is within the authority to regulate commerce.'

II

The case raises another question which was not discussed by the circuit court of appeals, and that is whether a combination, or attempted combination, to maintain the resale price is not created, when, as a result of a manufacturer's refusal to sell to jobbers who sell to price cutters or who themselves refuse to maintain a standard wholesale price, the jobbers refuse to sell to price cutters and refuse to cut the standard wholesale price. The Supreme Court has decided on several occasions that a concerted refusal of business relations may be an undue restraint of trade, even where an individual refusal would be permissible. and even though the refusal be a primary boycott such as in itself is not ordinarily a tort. Since it is a frequent if not an almost universal practice among manufacturers who wish their

The objection may be made that the prohibition of the Sherman Act against restraints of trade applies only to contracts and combinations in restraint of trade and that an individual refusal involves neither a contract nor a combination. If the purpose of the refusal be illegal, however, the refusal is but an indirect way of forcing on the other party a restriction that could not be imposed by contract. It is well settled, however, that the statute may not be evaded by indirection. The principle is well stated by Judge McPherson in United States v. Keystone Watch Case Company, 218 Fed. 502, whose opinion is quoted with approval by Judge Hazen in United States v. Eastman Kodak Company, 226 Fed. 62, at p. 66: "If it [the restraint of trade] be both direct and undue, no disguise will save it; the courts will search for the substance and actual effect of the transaction, and, if trade be unlawfully restrained thereby, will grant the needful relief."

It is also settled (Standard Oil Company v. United States, 221 U. S. 1, at p. 61) that the term "monopolize" in the second section of the act is synonymous with "restraint of trade" in so far as the effect of restraint of trade upon the public is concerned and that the section prohibits all acts by individuals which, on account of their effect on the public, would be illegal under the first section if done by combinations. It is unnecessary, therefore, that there be a combination, providing the actual effect is unduly to restrain trade.

The leading cases on the point are Grenada v. Mississippi, 217 U. S. 440, and Eastern Retail Lumber Dealers' Association v. United States, 234 U. S. 600, both of which involved concerted action on the part of retail lumber dealers to refuse to purchase from wholesalers or manufacturers selling directly to consumers in competi tion with the members of the combine. It will be noticed that the boycott was "primary" in that it was aimed directly against those whom it was intended to injure. The fact that the refusal was to buy instead of sell is of course immaterial,

price maintained to refuse to sell to jobbers who sell to price cutters and often also to jobbers who refuse themselves to maintain a standard wholesale price, it is particularly important to know whether such a practice creates a combination, which may be illegal irrespective of the legality of an individual refusal to sell.

It is well settled that an express agreement is not necessary to create a combination within the meaning of the Sherman law. A tacit understanding is sufficient. The essential thing is that there must be concerted action toward a uniform object. By concerted action is meant not coincident independent action, but conscious coöperative action in aid of a joint undertaking.

Under the above rule it is difficult to see how a conclusion of concerted action within the meaning of the law can be avoided. The individual refusals of the distributers and manufacturer to sell at cut prices or to price cutters are not unrelated, independent acts, but are part of a general plan to maintain the resale prices, both wholesale and retail, to which each distributer is compelled by the manufacturer's threats to become a party. Although there is no express contract or agreement to maintain wholesale prices and to prevent price-cutting retailers from procuring goods, the threat of the manufacturer to cut off supplies brings about a concert of action as surely as would an express agreement. In the Dr. Miles Medical Company case a contract embodying the above conditions was held "in effect" to create a "combination for the prohibited purposes" (referring to the purposes prohibited by the Sherman Act). In view of the rule that the act may not be avoided by "any disguise or subterfuge of form" it would seem impossible for the concerted action, produced by the manufacturer's threat, to escape the prohibitions of the act, providing its purposes come within the

act.

III

The issue both in the case of the individual discrimination by the manufacturer and of the concerted discrimination by distributers induced by the manufacturer appears to narrow down to the question: Is the purpose in aid of which the discrimination is practiced illegal within the Sherman Act? It may seem