LEGAL PHASES OF COOPERATIVE ASS0CIATI02TS. 37 



its breach. The courts are practically unanimous in holding unlaw- 

 ful all agreements and combinations by and between independent 

 and separate dealers for the purpose of controlling or fixing the 

 prices of commodities.-® A combination to fix the price of an 

 article of prime necessity was a criminal conspiracy at common 

 law.^'' Many of the cases which have come before the courts involv- 

 ing the propositions discussed under this heading are difficult to 

 reconcile, and many of them are undoubtedly in conflict. The whole 

 subject of monoplies and restraint of trade and allied matters is 

 now more or less comprehensively dealt with by statutes. 



SHERMAN AND CLAYTON ACTS. 



In 1890 Congress passed the Sherman Act, the first section of 

 which reads as follows : 



Every contract, combination in the form of trust or otherwise, or conspiracy 

 in restraint of trade or commerce among the several States, or with foreign 

 nations, is hereby dechared to be illegal. Every person who shall make any 

 such contract or engage in any such combination or conspiracy shall be deemed 

 guilty of a misdemeanor and on conviction thereof shall be punished by fine 

 not exceeding $5,000 or by imprisonment not exceeding one year, or by both 



said punishments, in the discretion of the court. 



The Clayton Act, which supplements the Sherman Act, was passed 

 by Congress in 1914. The Sherman Act was construed in the Stand- 

 ard Oil case in 1910, and it was held that it prohibited all contracts 

 and combinations which amount to an unreasonable or undue re- 

 straint of trade in interstate commerce.-^ This conclusion was reached 

 on the theory that the term restraint of trade had a settled meaning 

 at the time this statute was passed and that Congress used the ex- 

 pression in the same sense as that in which it was then commonly 

 employed. Under the antitrust acts referred to, the Supreme Court 

 of the United States in determining whether a defendant is engaged 

 in illegally restraining trade will look largely to how it employs its 

 power and strength. 



It was upon this theory that the Supreme Court refused to order 

 the dissolution of the United States Steel Corporation,^^ although it 

 controlled approximately 50 per cent of the steel business of the 

 country. In the opinion in this case the court enumerates some of 

 the practices which had been employed by other combinations and 

 which operated to bring them within the condemnation of the stat- 

 ute. The offending combinations referred to include the American 



^ 16 R. C. L. 38. 



2^16 R. C. L. 40; State v. Brickson, (Wash.) 103 Pac. 796. 



« Standard Oil Co. v. United States, 221 U. S., 1. 



» United States v. U. S. Steel Corp., 251 U. S. 417. 



