among the producing elements, and if interference in that division shows a readjustment of rates to be necessary, to grant such. Only an understanding and regulation of the fair demands of the elements working the railroads can enable Congress to determine what the railroads should receive for their commodity. The power now assumed by Congress is therefore a condition precedent to the fair exercise of the power to regulate rates. It is the rescue of the railroads from their impossible position between the upper and nether millstones a dilemma long familiar to

the public mind.

But Congress has intrusted one millstone to the Interstate Commerce Commission. If it retains the other one itself the grinding may go on. It cannot be questioned that if the combination prevents the roads from earning a fair income, power has been exceeded somewhere.13 But is it the raising of the wage by Congress, or a supposed refusal to raise rates by the Commission, that is unconstitutional? Presumably the latter. Where safety appliances are prescribed by statute, the assumption apparently has been that they must be applied regardless of cost,14 and the rates advanced if necessary. So probably of wages. The confiscation indeed does not happen until the last remedy has been exhausted, i.e., until an advance has been refused. Of course, the reliance of the Commission on Congress for existence, and the probability that finally the wage question too will be left in the hands of the Commission, make highly improbable any such clash as that supposed.

THE CASE Of The Zamora. The decision of the Privy Council in the case of The Zamora1 does not justify the excitement which it caused in contemporary newspapers. It does not hold that Order XXIX, Rule I, of the English Prize Court Rules, which is repugnant to the law of nations as recognised by England and administered in English courts, is invalid because of any dominant quality of the law of nations, but because the Order in question was made without authority.

The case arose from the desire of the English war authorities, at a time of moderate necessity, to use part of the cargo of a neutral ship held by the prize court, pending suit for condemnation as contraband. The King in Council, in contravention of international law,2 amended the Prize Court Rules so as to require the prize court to allow such action, but the Privy Council refused to countenance the alteration.

The sole question was the authority of the King in Council to enact the law. This might arise from either of two sources, the Royal Prerogative, or Parliamentary delegation. The Prize Court Act, 1894, is the only Parliamentary grant at all applicable to the case. That simply permitted the Executive to regulate the procedure and practice of the court. There 13 Cf. Smyth v. Ames, 169 U. S. 466.

14 Baltimore & Ohio R. Co. v. Interstate Commerce Commission, 221 U. S. 612; New York, N. H. & H. R. Co. v. New York, 165 U. S. 628.

1 32 T. L. R. 436.

"International law" is used throughout the text to mean the body of rules formulated by the nations of the world to govern their relations inter se, as those rules are recognized by an individual sovereign and administered by its courts.

was no authority therefore from this source to make an order changing the rules of substantive law upon which the court based its decisions. Nor could such an order as the one in question issue by virtue of the Prerogative, which, though it has tended to expand of late, has not for centuries been a source of change in the rules of law that courts administer. That it was international law which the Executive here sought to change cannot produce a different result. The order therefore which alone could sustain the contention of the Crown was unauthorized and void; and the Privy Council so found. Unfortunately for popular interpretation, the language of the court is in many passages misleading, apparently invoking some inherent superiority of international law to add sanction to the holding.

There are some dicta in several of the older cases, notably by Lord Stowell, that seem to insist that when international law conflicts with a direct enactment of the legislature, the former should be followed by the court. This doctrine has much support from the older text writers,5 who apparently reach their conclusion by the easy method of confusing wish with power. Such a view is clearly without analytical foundation. The rules formulated by the nations of the world to govern their relations inter se live as actual laws, at any rate at present, only through their recognition and adoption by individual municipalities. A prize court is today a municipal court, administering these rules to the extent that it is authorized to do so. Its administration of the rules rests upon such authorization and tacit or expressed recognition of them by the sovereign, and when this recognition ceases in whole or in part, to that extent the court must cease to administer the rules. Modern authority supports this view.

However, though the law as to direct legislative acts is settled, the attitude of the English courts toward Orders in Council is less clear. In many of the older cases and texts a greater emphasis is laid on the dominant quality of international law when the conflict is with an Order in Council than when it is with a direct legislative act." When the Order in question is one resting solely on Prerogative the difference is justified, for, as we have seen above, Prerogative can no more change the rules administered by prize courts than it can any other rules of law. It was with reference to this kind of an order that the court in the case of The Zamora used the language that has misled the newspapers. Perhaps a court in war time, making a decision on sound constitutional grounds,

3

3 Ipse autem rex, non debet esse sub homine, sed sub deo et sub lege, quia lex facit regem. BRACTON, Bk. I, Ch. 8. See 12 Co. Rep. 63; 12 id., 74.

See The Maria, 1 C. Rob. 340; The Walsingham Packet, 2 C. Rob. 77; The Recovery, 6 C. Rob. 341; The Fox, Edw. Adm. 311; The Lucy, Edw. Adm. 122; The Ostsee, 9 Moore P. C. 150.

3 PHILLIMORE, INTERNATIONAL LAW, §§ 433-436; 2 HALLECK, INTERNATIONAL LAW, Ch. 32, § 19.

"Mortensen v. Peters, 14 Scot. L. T. 227. See The Zamora, 32 T. L. R. 436, 440; Regina v. Keyn, 2 Ex. Div. 63, 160; Maisonnaire v. Keating, 2 Gall. (U. S.) 325; The Amy Warwick, 2 Sprague 123, 130. WESTLAKE, INTERNATIONAL LAW, Part II, 318; 1 SCOTT, HAGUE PEACE CONFERENCES OF 1899 & 1907, 466 et seq.; W. E. Wilkinson, "The Law Administered by Prize Courts," 36 CAN. L. T. 530. But see TAYLOR, INTERNATIONAL PUBLIC LAW, § 32.

'See The Fox, Edw. Adm. 311; The Lucy, Edw. Adm. 122; 3 PHILLIMORE, 654657.

but still one that pleases neutrals, may be forgiven if it draws a little of the holy sanction of the law of nations to its aid.

The same thing may explain the language of the early cases that we have spoken of. Until well into the last century "Order in Council" meant an Order by the King; the delegation of legislative power to His Majesty in Council is, in anything like its present prevalence, quite modern. Faced with an order strictly by Prerogative, the older courts, like the Privy Council now, refused to follow it, and relied on the Law of Nations or the Law of Nature as one reason for their holding. It cannot be doubted that a modern court, faced with an Order in Council made under real legislative delegation of authority, would follow out the Order.

PRICE MAINTENANCE AT COMMON LAW AND UNDER PROPOSED LEGISLATION. A movement has long been on foot to secure to manufacturers of trade-marked articles the statutory right to fix by contract the prices at which their products shall pass through the channels of distribution down to the ultimate consumer. The promoters of this legislation contend, and some cases support their view,2 that such right exists on common law principles.3 Whatever restraint is laid on competition among distributors by this policy they maintain is not injurious, but beneficial to the public, and necessary under modern methods of business to protect the quality of, and market for, the manufacturer's trade-marked product. At first glance, the manufacturer's alignment with jobber and retailer to secure this legislation seems anomalous, for what profits distributors receive apparently should not concern him. According to traditional economic theory, the smaller the retail price the larger the volume of sales, with correspondingly increased profits to the manufacturer. But practice finds the manufacturer allied with jobber and retailer for reasons psychological and pecuniary. By nature he is prone to support the existing system of distribution against the innovations of price-cutters, and moreover, he may believe that his valuable trade-mark loses on the cheap bargain counter respectability and prestige. To self-interest, however, he ascribes his position. Trade-marked or "identified" goods, it is asserted, are advertised by nation-wide campaigns conducted by their 8 See MAITLAND, CONSTITUTIONAL HISTORY OF ENGLAND, 387 et seq.

1 Stephens Bill, 64th Congr., 1st Sess. H. R. 13568.

2 Grogan v. Chaffee, 156 Cal. 611, 105 Pac. 745; Park v. National Wholesale Druggists' Ass'n, 175 N. Y. 1, 67 N. E. 136; Fisher Flouring Mills Co. v. Swanson, 76 Wash. 649, 137 Pac. 144; Walsh v. Dwight, 40 App. Div. (N. Y.) 513; Commonwealth v. Grinstead, 111 Ky. 203, 63 S. W. 427; National Phonograph Co., Ltd. v. Edison-Bell Consolidated Phonograph Co., Ltd., [1908] 1 Ch. 335. See Report of Committee on Maintenance of Prices, 4th Annual Meeting, Chamber of Commerce of the United States. Contra, W. J. Shroder, "Price Restriction on the Re-Sale of Chattels," 25 HARV. L. REV. 59.

3 See R. G. Brown, "The Right to Refuse to Sell," 25 YALE L. J., 194.

See G. H. Montague, "Should the Manufacturer have the Right to Fix Selling Prices?" 63 ANNALS OF THE AM. ACAD. OF POL. & Soc. Sci. 55. W. H. Ingersoll, "The Answer to Macy's," PRINTER'S INK, May 6, 1915. E. S. Rogers, "Predatory Price Cutting as Unfair Trade," 27 HARV. L. REV. 139. Hearings on H. R. 13568, May 30 and June 1,1916.

F. W. Taussig, “Price-Maintenance,” Am. Ec. Rev., Mar., 1916, p. 170.

makers, and become standard articles universally known by name and price. For a department store to cut to eighty-nine cents the watch that made the dollar famous means that all retailers have to follow suit, whereupon they are killed off one by one or, at least, bring price-reducing pressure on the manufacturer through the jobber, and moreover push other articles in place of the less profitable "leaders." Deterioration in the quality of trade-marked goods is said to result, and with no compensating gain, because the aim of the piratical price-cutter is asserted to be merely to lure the gullible public into a bad bargain on unknown goods. The opponents of price maintenance, who find their leaders among the large department stores and the chain retail store concerns, contend that an artificial uniformity of prices prevents the operation of forces, such as differences in location, business acumen and adventurousness, and suppresses economic advantages flowing from large scale operations. This agitation they dub an attempt by a vested system to defend itself against the experiments being made to develop a goods-distributing mechanism more in conformity with social needs.7

8

What is the result of judicial attempts to adjudicate these conflicting interests? Diametrically opposed decisions. State courts have reasoned that the common law permits price agreements framed through necessity to enable manufacturers to maintain the standard of their goods and to protect consumers from the deception of unscrupulous traders, even though the cost may be a limitation of competition among distributors. The United States Supreme Court, in the case of Dr. Miles Medical Co. v. Park & Sons Co., decided that a system of price-maintenance contracts, to control the price of a monopolized commodity, was illegal, at common law and under the Sherman Act. There are experts, both in law and economics, who have given intensive study to the subject, and they too take opposing sides.10 The conclusion is inevitable that a solution one way or the other of this problem by sitting in banc is impossible; eclectic experimentation seems to be the way to reach a just social arrangement that will combine the advantages and eliminate the evils of both systems. This means that the problem cannot be solved on the basis of known facts, by an absolute declaration of rights one way or the other, but by an adjusting and harmonizing of manufacturing and distributing elements so that they may work, not as conflicting forces, but as parts of a single social organism.

The chief merit in the Stevens Price Maintenance Bill is its embodiment of this attitude. It aims to secure the right to maintain prices, but it does not raise adequate safeguards against the dangers of the system. A manufacturer may obtain the right by filing with the Federal Trade

• See Fisher Flouring Mills Co. v. Swanson, 76 Wash. 649, 669; 137 Pac. 144, 151. See also, Ingersoll, Montague, and Rogers, supra, note 4.

7 See Minority Report of the Committee on Maintenance of Prices, supra, note 2. 8 See note 2, supra.

9220 U. S. 373. Attempts have been made to distinguish this case on the ground that the commodity involved was a monopoly and that where that element was lacking price maintenance was legal. See R. G. Brown, note 3, supra. A more logical deduc tion, however, would be that if price maintenance were illegal in the case of a lega monopoly it would be so a fortiori in case of an ordinary article.

10 See Taussig, note 2, supra. Hearings on H. R. 13568, May 30 and June 1, 1916.

Commission a list of prices and complying with these conditions: first, the commodity must be available to all on equal terms; second, it must be in competition with other similar articles; and third, there must have been no collusive price-setting with competitors. Of course the Sherman Act provides the last two conditions. Other details provide for practical flexibility." Stiff, unreasonable prices, however, the danger of this price-maintenance system and the bugbear of its opponents, are not guarded against.12 The assumption that publicity will bring fairness seems unwarrantable. Instead of being a bureau for the burial of price lists, the Commission should have the power to refuse registration to goods unduly dear. Protection to the public is the price manufacturers and distributors should pay for protection to themselves. Under the proposed bill equity would probably refuse specific performance of a filed price-maintenance contract should the price-cutter prove that his vendor was mulcting the public, but the more desirable arbiter of reasonableness, both for the sake of uniformity and for the sake of expertness, is the administrative commission.13 Under this system a palpably unfair refusal on the score of unreasonable price, monopoly, or collusive pricesetting by the Commission would be subject to correction by the courts.14 Apart from this check the findings of the Commission should be conclusive in any suit to enforce rights under the bill.

Securing the right to maintain prices through contract is by no means the only object sought by the bill. In an obscure way it seeks to apply the doctrine of equitable servitudes to branded articles, that is, to compel all to sell the goods at the set price though they may not have purchased them under a price-fixing contract but had notice of the price restrictiona necessary concomitant of the contractual right if the latter is to be effectual.15 The common law has always opposed restrictions on chattels, and it is not clear that equity would enforce such on the view that the statute under discussion, by legalizing contractual restrictions on price, has overthrown the common law antipathy.16 Therefore the bill provides

"The bill provides for (1) seasonal disposal sales; (2) procedure in case of winding up business of manufacturer or dealer; (3) disposal of deteriorated goods. In all cases the manufacturer is given the opportunity to repurchase before the set price may be departed from.

12 See Taussig, supra.

13 Texas & Pac. Ry. Co. v. Abilene Cotton Oil Co., 204 U. S. 426.

14 For the assumption of rightness of legislative conduct, where the court is uninformed, see Hadacheck v. Sebastian, 239 U. S. 394, 413.

15 The bill is not explicit on this point, which is allotted space in inverse proportion to its importance. Really the constitutionality of the bill turns on this element. However, the only intimation of its inclusion comes in the section relating to the retail price of the articles registered. At the set price must the articles be sold "from whatever source acquired." This strikes one as an attempt to make the weakest link look like no link.

16 An analogy on this point is sometimes drawn from the right to impose restrictions on articles manufactured under a patent, the argument being that society's interest in the progress of invention overrides the common law antipathy to restraints on personalty. This policy overruled, the theory of equitable servitudes is held to apply to chattels. The patent cases, however, rest upon quite a different theory. A patentee has the exclusive rights to make, use, and sell the embodiments of his invention. Since these rights are separable and may be granted independently of one another, Dorsey Revolving Harvester Co. v. Bradley Mfg. Co., 12 Blatchf. (U. S.) 202, 204, he may sell a patented article and grant a limited right of user - for example, a license to use