LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 83 
In a few instances the courts have attached some significance to 
the fact that the association was formed under a cooperative statute 
that contained a provision in effect expressly exempting associations 
formed thereunder from the antitrust laws of the State. 65 
In 1890 the Sherman Anti-Trust Act 66 was passed by Congress, 
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 in any Territory of the United States or of 
the District of Columbia, or in restraint of trade between any such Territory 
and another, or between any such Territory or Territories and any State or 
States or the District of Columbia, or with foreign nations, or between the Dis- 
trict of Columbia and any State or States or foreign nations, is hereby declared 
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. 
In construing this statute the United States Supreme Court has 
repeatedly held that only unreasonable restraints are prohibited 
thereby. 67 
In the cases last cited the Supreme Court announced the so-called 
" rule of reason." It is now settled that under the Federal anti- 
trust acts the courts will look largely to how a defendant employs its 
power and strength, and the legality of a large industrial unit de- 
pends on its acts and conduct and not on its size. During the past 
decade and more, courts have shown an increasingly liberal attitude 
toward large-scale organizations. Bigness which has come about 
through development along normal lines and without unfair prac- 
tices or wrongful acts does not constitute illegality. 
In the case of the United States v. United States Steel Corpora- 
tion, 68 the legality of this corporation, a combination of approxi- 
mately 180 separate units, was involved, but the court applied the 
principles referred to, and although the corporation controlled 50 per 
cent of the steel industry of the United States it was held not to be in 
restraint of trade. 
In the case of the Chicago Board of Trade v. United States 69 
the legality of a rule adopted by the Board of Trade of Chicago 
which prohibited its members from purchasing or offering to pur- 
chase, during the period between the session of the board termed the 
" call " and the opening of the regular session of the next business 
day, grain " to arrive " at a price other than the closing bid at the 
" call " was held not to violate the Sherman Act. In this case it was 
said, " The true test of legality is whether the restraint imposed is 
such as merely regulates, and perhaps thereby promotes competition, 
or whether it is such as may suppress or even destroy competition." 
A case which well illustrates the " rule of reason " is that of the 
National Window Glass Manufacturers v. United States, 70 in which 
the Supreme Court of the United States passed upon a situation in 
which all the manufacturers of hand-blown glass and all the labor 
65 Lee v. Clearwater Growers' Ass'n, Fla. , 111 So. 722 ; Tobacco Growers' 
Co-op. Ass'n v. Jones, 185 N. C. 265, 117 S. E. 174, 33 A. L. R. 231. 
66 26 Stat. 209, U. S. Coinp. Stat. sec. 8820. 
67 Standard Oil Co. of New Jersey v. United States, 221 U. S. 1 ; "United States v. 
American Tobacco Co.. 221 U. S. 106. 
cs United States v. United States Steel Corporation et at, 251 U. S. 417. 
69 Board of Trade of the City of Chicago et al. v. United States, 246 U. S. 231. 
70 National Association of Window Glass Manufacturers v. United States, 263 U. S. 403. 
