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in that other clause of the Constitution which provides that no person shall be deprived of life, liberty, or property without due process of law. It has been held that the word liberty, as used in the Constitution, was not to be confined to the mere liberty of person, but included, among others, a right to enter into certain classes of contracts for the purpose of enabling the citizen to carry on his business. (Allgeyer v. Louisiana, 165 U. S., 578; United States v. Joint Traffic Association, 171 id., 505, 572.) But it has never been, and in our opinion ought not to be, held that the word included the right of an individual to enter into private contracts upon all subjects, no matter what their nature, and wholly irrespective (among other things) of the fact that they would, if performed, result in the regulation of interstate commerce and in the violation of an act of Congress upon that subject. "The provision in the Constitution does not, as we believe, exclude Congress from legislating with regard to contracts of the above nature while in the exercise of its constitutional

right to regulate commerce among the states. On the contrary, 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 power of Congress to regulate interstate commerce comprises the right to enact a law prohibiting the citizen from entering into those private contracts which directly and substantially, and not merely indirectly, remotely, incidentally, and collaterally, regulate to a greater or less degree commerce among the states."

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"If certain kinds of private contracts do directly limit or restrain, and hence regulate interstate commerce, why should not the power of Congress reach those contracts just the same as if the legislature of some state had enacted the provisions contained in them? The private contracts may in truth be as far-reaching in their effect upon interstate commerce as would the legislation of a single state of the same character."

"The power of Congress over this subject seems to us much more important and necessary than the liberty of the citizen to enter into contracts of the nature above mentioned, free from the control of Congress, because the direct results of such contracts might be the regulation of commerce among the states possibly quite as effectually as if a state had passed a statute of like tenor as the contract. * * * We conclude

that the plain language of the grant to Congress of power to regulate commerce among the several states includes power to legislate upon the subject of those contracts in respect to interstate or foreign commerce which directly affect and regulate that commerce, and we can find no reasonable ground for asserting that the constitutional provision as to the liberty of the individual limits the extent of that power."

Arbitrary increase in price is a restraint.

"If iron pipe cost $100 a ton instead of the prices which the record shows were paid for it, no one, we think, would contend that the trade in it would amount to as much as if the lower prices prevailed. The higher price would operate as a direct restraint upon the trade, and therefore any contract or combination which enhanced the price might in some degree restrain the trade in the article. It is not material that the combination did not prevent the letting of any particular contract. Such was not its purpose. On the contrary, the

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more contracts to be let the better for the combination. was formed not for the object of preventing the letting of contracts, but to restrain the parties to it from competing for contracts and thereby to enhance the prices to be obtained for the pipe dealt in by those parties. And when by reason of the combination a particular contract may have been obtained for one of the parties thereto, but at a higher price than would otherwise have been paid, the charge that the combination was one in restraint of trade is not answered by the statement that the particular contract was in truth obtained and not prevented. The parties to such a combination might realize more profit by the higher prices they would secure than they could earn by doing more work at a much less price. The question is as to the effect of such combination upon the trade in the article, and if that effect be to destroy competition and thus advance the price, the combination is one in restraint of trade."

Contract may be in restraint of trade among states though articles are subject to taxation in one state.

"Decisions regarding the validity of taxation by or under state authority, involving sometimes the question of the point of time that an article intended for transportation beyond the state ceases to be governed exclusively by the

domestic law and begins to be governed and protected by the national law of commercial regulation, are not of very close application here. The commodity may not have commenced its journey and so may still be completely within the jurisdiction of the state for purposes of state taxation, and yet at that same time the commodity may have been sold for delivery in another state. Any combination among dealers in that kind of commodity which in its direct and immediate effect forecloses all competition and enhances the purchase price for which such commodity would otherwise be delivered at its destination in another state, would, in our opinion, be one in restraint of trade or commerce among the states, even though the article to be transported and delivered in another state were still taxable at its place of manufacture."

But commerce within a state can not be interfered with by the statute.

"The views above expressed lead generally to an affirmance of the judgment of the court of appeals. In one aspect, however, that judgment is too broad in its terms-the injunction is too absolute in its directions—as it may be construed as applying equally to commerce wholly within a state as well as to that which is interstate or international only. This was probably an inadvertence merely. Although the jurisdiction of Congress over commerce among the states is full and complete, it is not questioned that it has none over that which is wholly within a state, and therefore none over combinations or agreements so far as they relate to a restraint of such trade or commerce. It does not acquire any jurisdiction over that part of a combination or agreement which relates to commerce wholly within a state by reason of the fact that the combination also covers and regulates commerce which is interstate. The latter it can regulate, while the former is subject alone to the jurisdiction of the state. The combination herein described covers both commerce which is wholly within a state and also that which is interstate.

"In regard to such of these defendants as might reside and carry on business in the same state where the pipe provided for in any particular contract was to be delivered, the sale, transportation, and delivery of the pipe by them under that contract would be a transaction wholly within the state, and the statute would not be applicable to them in that case.

They might make any combination they chose with reference to the proposed contract, although it should happen that some nonresident of the state eventually obtained it.

"The fact that the proposal called for the delivery of pipe in the same state where some of the defendants resided and carried on their business would be sufficient, so far as the act of Congress is concerned, to permit those defendants to combine as they might choose in regard to the proposed contract for the delivery of the pipe, and that right would not be affected by the fact that the contract might be subsequently awarded to some one outside the state as the lowest bidder. In brief, their right to combine in regard to a proposal for pipe deliverable in their own state could not be reached by the Federal power derived from the commerce clause in the Constitution.

"To the extent that the present decree includes in its scope the enjoining of defendants thus situated from combining in regard to contracts for selling pipe in their own state it is modified and limited to that portion of the combination or agreement which is interstate in its character. As thus modified, the decree is affirmed."

79 Fed. Rep., 627.

Statement.

In re Grice.

February 22, 1897.

The Texas anti-trust law of 1889 makes it a crime for two or more persons to unite to raise or lower prices or limit the production of an article. It provides that persons outside of the state who commit these acts within the state are guilty of a violation of the act. It exempts from its operation agricultural products and live stock while in the hands of the raiser or producer.

John D. Rockefeller and several others, including the relator Grice, were indicted for violating this statute. Grice was imprisoned, and brought habeas corpus proceedings in the circuit court of the United States claiming that the statute is unconstitutional.

Opinion.

Swayne, district judge, who heard the case, held that the law was unconstitutional because it could not affect people outside of the state; that the state can not pass a law prohibiting reasonable restriction of trade, and reasonable combinations; that these rights are guaranteed by the federal

constitution, and that reasonable combinations are by this law prohibited; that four-fifths of the people in Texas are farmers and cattle raisers, and that a law which exempts four-fifths of the people from its operation is unreasonable class legislation, and is void under the constitutional clause that provides that no state shall deny to any person within its jurisdiction the equal protection of the laws.

The relator is discharged.

United States v. Trans-Missouri Freight Association.

166 U. S., 290. Statement.

March 22, 1897.

Defendants are a large number of railroad companies which entered into an agreement to establish and maintain rates on all freight traffic. The United States brings suit to enjoin defendants on the ground that the agreement is in violation of the Trust Act. Defendants claim:

1. That Congress did not intend the Trust Act to apply to railroads, because the Interstate Commerce Act impliedly gave railroads the right to fix rates; and if Congress had intended to change the Commerce Act by the Trust Act it would have said so.

2. The Trust Act does not apply to reasonable restraint of trade, and the agreement in question provides for only reasonable restraint of trade.

Opinion.

1. The Commerce Act and the Trust Act are consistent with each other and, therefore, the Trust Act applies to railroads just as if there were no Commerce Act.

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2. The Trust Act says every contract in restraint of trade. Therefore, the courts have no right to confine the scope of the Act to contracts in unreasonable restraint of trade. includes all contracts in restraint of trade whether reasonable or unreasonable.

The agreement violates the Trust Act, and an injunction is proper.

Pierre V. A. Brett v. Martin C. Ebel et al.

29 N. Y. App. Div., 256. Statement.

May, 1898.

Plaintiff and defendants were engaged in the business of ship brokers, chartering vessels from various ports in the West Indies and South America. Plaintiff sold defendants

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