No CrossRef data available.
Article contents
The Effect of Business Conditions on Early Judicial Decisions Concerning Restraint of Trade*
Published online by Cambridge University Press: 03 February 2011
Extract
It appears to legal historians that the Supreme Court of the United States must have gone off the main track in 1933 when it handed down the celebrated Appalachian Coals decision upholding a joint selling agency. Only six years before, the Court had condemned a similar collective arrangement maintained by the Trenton Potteries; and seven years later, in 1940, the Court rendered a decision in the Socony-Vacuum Oil Case that revealed an abrupt return to its generally firm attitude toward collective action on the part of business concerns. Indeed, it is difficult if not impossible to reconcile the 1933 Appalachian Coals decision with the 1940 Socony-Vacuum Oil decision, and, as prices rose and shortages developed during the 1940's, the judicial attitude toward restraint of trade in various forms became progressively stiffer and stiffer. A parallel shift in the climate of court opinion against trade associations can be noted in the 1920's by comparing the decisions near the beginning of the decade, when trade was lax and prices were soft, with those a few years later when prosperity was again in evidence. One might even pose the question: Do the courts follow business conditions, as they are alleged to follow the election returns?
- Type
- Articles
- Information
- Copyright
- Copyright © The Economic History Association 1950
References
1 Trenton Potteries Co. et al. v. United Slates, 273 U. S. 392; Appalachian Coals, Inc. v. United States, 288 U. S. 344; United States v. Socony-Vacuum Oil Co., 310 U. S. 150.
2 See, for example, Ethyl Gasoline Corp. et al. v. United States, 309 U. S. 436 (1940); Fashion Originators' Guild of America et al. v. Federal Trade Commission, 312 U. S. 457 (1941); and the following 1942 cases: Morton Salt Co. v. G. S. Suppiger Co., 314 U. S. 488; 62 Sup. Ct. 402; United States v. Masonite Corp. et al., 62 Sup. Ct. 1070; and United States v. Univis Lens Co., 62 Sup. Ct. 1088.
3 Opinion by Chancellor Stricker of the Mississippi Court in W. A. Shaeffer Pen Co. v. Ray Barrett, handed down March 12, 1949: Old Dearborn Distributing Corp. v. Seagram Distillers Corp., 57 Sup. Ct. 139 (1936). This decision is remarkable in that it distinguished between the trade-mark or brand on an item and the item itself with respect to property rights. The Strieker decision came after argument calling attention to the lack of protection of the consuming public against extortionate prices under the guise of “fair trade.” See also the press reports on decisions favoring price cutters in New York, New Orleans, and Florida.—Time, April 18, May 23, 1949.
4 Berry, T. S., Western Prices before 1861 (Cambridge: Harvard University Press, 1943), pp. 286–317.Google Scholar
5 Andrew Donnally (assignee Wm. & R. M. Steele) v. John Cabell & Walter Trimble (debt); Wm. & R. M. Steele, use of Andrew Donnally v. John B. Crocket & John D. Shrewsbury (breach of covenant). See Law Record, Sup. Ct. of Kanawha County (1821–1826) 514 (July 25, 1825). I am indebted to Messrs. James H. McClung of Charleston and Ernest E. Morris of Morgantown, West Virginia, for this information. In a concurrent suit the defendant was awarded $5.00 and $8.83 costs. In Donnally v. Wilson, which resembles the Cabell-Trimble Case above, the question of the legality of the Steele agreements is not mentioned.—5 Leigh 329, 32 Va. Rep. 129–31.
6 “Virtually the same state of facts has in different courts led to opposite decisions” (regarding to what extent competition may be suppressed or bought off without contravening public policy). —Spelling, T. S., A Treatise on Trusts and Monopolies (N.p., 1893), p. 74Google Scholar. See also Greenhood, Elisha, “General Restrictions on Business Freedom,” Central Law Journal, XIX (1884), 62Google Scholar; Dwight, T. W., “The Legality of Trusts,” Political Science Quarterly, III (1888), 592–632CrossRefGoogle Scholar; F. J. Goodnow, “Trade Combinations at Common Law,” ibid., XII (1897), 212–45; Dodd, S. C. T., “The Present Legal Status of Trusts,” Harvard Law Review, VII (1893), 157–69CrossRefGoogle Scholar; and Taft's opinion in United States v. Addyston Pipe & Steel Co. et al., 85 Fed. 271 (C. C. A. Tenn.).
7 “Historical Development of the Law of Business Competition,” Yale Law Journal, XXXV (1925–1926), 905–38Google Scholar; ibid., XXXVI (1926–27), 42–55, 207–34, 351–83.
8 “Price-fixing Agreements under the Sherman Anti-trust Law,” University of California Law Review, XXVIII (1940), 297–351, 667–732.Google Scholar
9 See also Purdy, Harry L., Lindahl, Martin L., and Carter, William A., Corporate Concentration and Public Policy (New York: Prentice-Hall, Inc., 1942), pp. 291 ff. Here the authors adopt an approach similar to that of Peppin.Google Scholar
10 Greenhood, “General Restrictions on Business Freedom,” Central Law Journal, XIX (1884), 62.Google Scholar
11 The possibility of an oscillation in the attitude of the public, the executive departments, and the legislatures toward price agreements and other restraints of trade, which is primarily dependent on general changes in the trade and price atmosphere, forms the subject of another article.
12 See Purdy, Lindahl, and Carter, Corporate Concentration, pp. 285 ff.
13 1 P. Wms. 181; 24 Eng. Rep. 347.
14 2 Kenyon 300; 96 Eng. Rep. 1189.
15 Beveridge, William and Others, Prices and Wages in England from the Twelfth to the Nineteenth Century (London: Longmans, Green & Co., 1939), I, 704 ff.Google Scholar
16 Brightly, Digest of Decisions, Courts of Pennsylvania (Philadelphia, 1877), I, 36.Google Scholar
17 14 Wend. 9.
18 19 Pick. 51.
19 Cole, A. H., Wholesale Commodity Prices in the United States, 1700–1861 (Cambridge: Harvard University Press, 1938), Supp., pp. 256 ff.CrossRefGoogle Scholar
20 21 Wend. 157.
21 Berry, Western Prices, p. 184; Cole, Wholesale Commodity Prices, Supp., pp. 310 ff.
22 4 Denio 349 (N. Y. Sup. Ct.). One party to the agreement failed to make the agreed payment into the earnings pool. The agreement was held “injurious to commerce” within the meaning of 2 Rev. Stat. 691, § 8.
23 5 Denio 434. The action concerned a note discounted and a bill of exchange drawn by John Tefft, agent of the association.
24 6 Calif. 258 (July 1856).
25 Alta California, August 2, 1849.
26 Sloat's Price Current, December 14, 1850.
27 San Francisco Prices Current and Shipping List, December 30, 1854.
28 Ibid., June 19, 27, August 27, 1856.
29 Alta California, December 1, 15, 31, 1849; San Francisco Prices Current and Shipping List, August 17, 1855, to September 12, 1856.
30 Berry, Western Prices, pp. 517–21, 541.
31 San Francisco Prices Current and Shipping List, August 27, 1856.
32 36 Calif. 342.
33 Mercantile Gazette, January 12, 1864; January 12, 1865.
34 Ibid., January 9, 1866; January 9, 1867.
35 Commercial Herald, January 11, 1868.
36 “I believe universal observation will attest that for the last quarter of a century, competition in trade has caused more individual distress, if not more public injury, than the want of competition ….” The phrase, “competition is the life of trade,” was termed a “shibboleth.”—3 Pin. 123; 56 Am. Dec. 180.
37 Berry, Western Prices, p. 184; Cole, Wholesale Commodity Prices, Supp., pp. 310 ff.
38 14 La. 168.
39 Berry, Western Prices, p. 186.
40 18 Grant's Ch. Rep. 540; United States Bureau of Labor Statistics, Index Numbers of Wholesale Prices in the United States and Foreign Countries (Bulletin No. 284; Washington, D. C.; The Bureau, 1921), pp. 158, 189, 273Google Scholar; Silberling, N. J., The Dynamics of Business (New York: McGraw-Hill Book Co., 1943), pp. 98, 133Google Scholar. The Sauerbeck Index for Great Britain shows much less decline in English prices than the Economist Index for the same years.
41 35 Ohio St. 666 (1880).
42 United States Bureau of Labor Statistics, Index Numbers, pp. 158, 189, 273; Silberling, Dynamics of Business, p. 157.
43 The Ohio court case has been cited frequently since it was rendered. For further information on the Ohio-West Virginia salt combinations after the Civil War, see the Annual Reports of the Cincinnati Chamber of Commerce (1871), p. 97Google Scholar; (1872), pp. 116–17; (1875), pp. 167–68; (1876), pp. 169–70; (1877). PP. 176–77; (1878), pp. 182–83; (1879), pp. 187–88; (1880), pp. 198–99; and (1885), pp. 259–60. See also the Cincinnati Daily Gazette, September 17, 1870Google Scholar; October 11, 1870; December 2, 1872; et passim.
44 Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. 173 (1871).Google Scholar
45 Warren, G. F. and Pearson, Frank, Wholesale Prices in the United States, 1797 to 1932 (Ithaca: Cornell University Agricultural Experiment Station, 1932), pp. 70, 80, 95Google Scholar. Memoir 142, Part I.
46 Taking the years 1910–14 as a base, Warren and Pearson's fuel and lighting index was up to 152 in 1871, compared with 134 in the year preceding. All commodities declined from 135 to 130 per cent of the same base.—Warren, and Pearson, , Prices (New York: John Wiley and Sons, Inc., 1933), p. 26.Google Scholar
47 Craft, R. C. et al. v. Jas. O. McConoughy, 79 Ill. 346 (September 1875).Google Scholar
48 Silberling, Dynamics of Business, p. 50.
49 Commodity Research Bureau, Commodity Year Book, 1948 (New York: The Bureau, 1948), p. 179.Google Scholar
50 Wm. Skrainka v. Diettrich Scharringhausen, 8 Mo. App. 522 (April 6, 1880). Pep. grouped this with nine other American cases involving price agreements before 1890, in whist seven were held valid (of the three others, one was overruled). Of the seven valid agreements, five involved opinions that the prices asked by the sellers were not unreasonable or extortionate, the implication being that if the prices had been unreasonable or extortionate the agreements would not have been upheld.—Peppin, , “Price-fixing Agreements under the Sherman Anti-trust Law,” University of California Law Review, XXVIII (1940), 336–37.Google Scholar
51 Silbcrling, Dynamics of Business, p. 157.