State of the Union AddressesTaft, William H. (William Howard)
History
State of the Union Addresses
Taft, William H. (William Howard)
Presidents -- United States -- Messages; United States -- Politics and government -- Sources
In two early cases, where the statute was invoked to enjoin a
transportation rate agreement between interstate railroad companies, it was
held that it was no defense to show that the agreement as to rates
complained of was reasonable at common law, because it was said that the
statute was directed against all contracts and combinations in restraint of
trade whether reasonable at common law or not. It was plain from the
record, however, that the contracts complained of in those cases would not
have been deemed reasonable at common law. In subsequent cases the court
said that the statute should be given a reasonable construction and refused
to include within its inhibition, certain contractual restraints of trade
which it denominated as incidental or as indirect.
These cases of restraint of trade that the court excepted from the
operation of the statute were instances which, at common law, would have
been called reasonable. In the Standard Oil and Tobacco cases, therefore,
the court merely adopted the tests of the common law, and in defining
exceptions to the literal application of the statute, only substituted for
the test of being incidental or indirect, that of being reasonable, and
this, without varying in the slightest the actual scope and effect of the
statute. In other words, all the cases under the statute which have now
been decided would have been decided the same way if the court had
originally accepted in its construction the rule at common law.
It has been said that the court, by introducing into the construction of
the statute common-law distinctions, has emasculated it. This is obviously
untrue. By its judgment every contract and combination in restraint of
interstate trade made with the purpose or necessary effect of controlling
prices by stifling competition, or of establishing in whole or in part a
monopoly of such trade, is condemned by the statute. The most extreme
critics can not instance a case that ought to be condemned under the
statute which is not brought within its terms as thus construed.
The suggestion is also made that the Supreme Court by its decision in the
last two cases has committed to the court the undefined and unlimited
discretion to determine whether a case of restraint of trade is within the
terms of the statute. This is wholly untrue. A reasonable restraint of
trade at common law is well understood and is clearly defined. It does not
rest in the discretion of the court. It must be limited to accomplish the
purpose of a lawful main contract to which, in order that it shall be
enforceable at all, it must be incidental. If it exceed the needs of that
contract, it is void.
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