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feel equally clear as to what machinery should be invoked or the specific provision by which that proposition could be enforced."

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"I am very clear that the maximum limit could not be properly fixed in dollars, because what would be just enough for one business would be far too much for many others."

Apparently he favored some standard which took account of the percentage of the market controlled. But even here he was vague as to what percentage would be illegal. He was clear that 10 per cent would be legal, but that 40 per cent might not.62 Mr. Brandeis' difficulties in dealing with the standard of size for business and industrial units where the power of the legislature was involved, are surely not diminished where the power of the court is invoked. The difficulty is not solved by being embalmed in any such phrase as "preponderant position in the business." It is clear that whether a business occupies such a position is a good deal like determining whether anyone has been guilty of negligence. No one can tell what the legal consequences of acts may be until the trial is had, and the courts are through. Can the control of property engaged in industrial and commercial pursuits and operating in a delicately adjusted field from day to day stand being faced at all times with such a test of legality? If such a test were adopted, the motive to err on the safe side in order to avoid indictment might so impede the shift from smaller to larger units as to result in positive public evil. Where the violation of a highly penal statute like the Sherman Act is involved, is it fair to subject business men to indictment for crime upon an issue which involved merely the size of the business which they went into together?

The courts have had at least one unfortunate experience in making property rights depend upon a question of size. When a nonexclusive power was created in A. to appoint among a class with a gift in default of appointment to the class, A. must appoint something to each one. If A. appointed too small an amount to one, it was treated in a court of equity as no appointment at all. It was called an illusory appointment. This was a very pretty doctrine sentimentally, but it made litigation every time any appointee got a

61 Report of hearing before the Senate Committee on Interstate Commerce, supra, 1175. 62 Ibid., 1175.

considerable amount less than the others, and no test of what was a substantial appointment could ever be worked out. It always depended on the size and character of the estate and surrounding circumstances. The doctrine was spoken of with contempt by judges and writers who had had any experience with it, and was finally abolished by act of Parliament.63 In this country courts have refused to recognize it. There are the same fundamental objections (many times magnified) against putting the invalidity of great business organizations upon any test of size alone.

It will be said, however, that if the line as to size can be drawn for the purpose of determining what is prima facie evidence of the intent to exclude others, it can be drawn as a test for illegality itself. It is not at all denied that such a line can be drawn. The argument is that when drawn as a test of illegality, it is one which the courts should not draw, but as evidence of an ultimate fact of excluding purpose, it may be considered alone or with other evidence for what it is worth, subject like other evidence to have the infer ences arising from it rebutted.

7. It is a fair inference from Mr. Brandeis' testimony that he did not draw any line between combinations of labor units and combinations of managing units, so far as illegal attempts at monop. oly were concerned. He was asked: 65

"Do you regard the closed shop in labor as a tendency toward monop oly, just as you do a combination of plants? "

to which he answered:

"Yes."

63 "Powers in Trust," John Chipman Gray, 25 HARV. L. REV. 1, 26: "But the rule as to illusory appointments is unique in the law. Other rules of doubtful character have found defenders or apologists, but no one has had a good word for this. It has been condemned in the most unmeasured terms by judge after judge; by Sir Richard Pepper Arden (afterwards Lord Alvanley), M. R., in Spencer v. Spencer, 5 Ves. 362 (1800); Kemp v. Kemp, ibid., 849 (1801); by Sir William Grant, M. R., in Butcher v. Butcher, 9 Ves. 382 (1804); and by Lord Eldon, C., in Bax v. Whitbread, 16 Ves. 15 (1809), and Butcher v. Butcher, 1 Ves. & B. 79, 94, 96 (1812).

"This state of things was so intolerably inconvenient and mischievous that a statute was passed abolishing the rule as to illusory appointments." [St. 11 Geo. IV. & 1 Wm. IV. c. 46 (1830).]

64 Graeff v. DeTurk, 44 Pa. 527 (1863); Hawthorn v. Ulrich, 207 Ill. 430, 69 N. E. 885 (1904).

65 Report of hearing before the Senate Committee on Interstate Commerce, supra,

It seems hardly conceivable that Mr. Brandeis would have made mere size and preponderant position in a labor market of a given labor union, in and of itself, a test of illegality. Indeed, it seems generally accepted that labor unions can be as large as possible and occupy as preponderant a position in the labor market as size can give, and that they only become illegal when they have the excluding purposes or indulge in unlawful excluding practices.66 Why, then, it may be asked, make the size of combinations of managers and their properties, or of the properties alone, in and of itself, illegal?

8. It will be argued, however, that if size is not in and of itself illegal, then if 100 per cent of all the property and managers engaged in a given industry unite and have no excluding purposes or indulge in no unlawful excluding practices, the combination would be valid, although, until others could come into the field, it would have an absolute monopoly.

In meeting the argument based upon this extreme case, we must first assume that there is no such control of natural resources or strategic points as practically to exclude others, or to make their entrance into the business unusually difficult. The case put must be looked at as one in which the field is really free to others to enter. With this condition properly emphasized the combination of 100 per cent of all those engaged in a given business presents no special feature except the fact that for some time, not at all clearly defined, but upon our assumption of a free field, comparatively short, the combination could, if it chose, fix such prices as it pleased. This is offset by Mr. Brandeis' view that size alone without any excluding purposes, practices, or surrounding conditions is quickly self-destructive by reason of the inefficiency of the combination and the resulting successful competition. It is also offset, in part at least, by the natural motive to sell cheaply enough to cause the public to buy, and at the same time not unduly to encourage others to come into the business. Such prices would be fair prices because they would be the highest possible, taking into account the proper reaction from the fact that the market was free to others.

Suppose, however, the 100 per cent combination did continue for an appreciable term and attempted, in disregard of these natural motives, to enter upon a debauch of exorbitant and monopoly prices,

66 See cases, supra, notes 47-49.

regardless of consequences, during such period as was possible. That would clearly be contrary to the public interest. Nevertheless, the more outrageous the conduct of the temporary monopoly the quicker would be the relief by the entry of others and the greater the load of unpopularity which the combination would have acquired. The question is: Should the public interest be left thus to suffer temporarily in this largely problematical case, rather than that every combination of capital which approached the vague standard of a preponderant position in the business should be subjected to the terrors of indictment and uncertainty as to the legality of its business organization, and that every combination which had a clear preponderant position in the business, because it had from 40 per cent to 80 per cent of the market should be ipso facto illegal when it had no such power over prices as in the hypothetical case put? It is submitted that the hypothetical case of the 100 per cent combination which used its position for however short a time to charge exorbitant prices, should be left to be dealt with by the legislature, or by the courts when that case arises. The result which the court might conceivably feel obliged to reach in such a case is no argument in favor of the court drafting a judicial test of illegality for all combinations based upon size and preponderant position in the business, and that alone.

In the same way many arguments in favor of mere size being made the test of illegality, founded upon some extraordinary hypothetical action of a combination with a preponderant position in the business, may be met. For instance, it is said that a trust might withdraw "temporarily from the market" so that prices would rise, or it might release "an unusual quantity of goods upon the market" so that prices would fall.67 There are limits to be observed by the courts in the placing of restrictions upon the legality of business organizations which certainly affect the freedom of action of all in order to take care of a few problematical and remotely probable situations.

9. The effort to make mere size a test of illegality always includes the argument that preponderant position in the business confers such power and opportunity for illegal excluding practices, and the danger of their being used is so great that the entire combination

67 Brief of the Government in International Harvester Co. v. United States (now pending in the United States Supreme Court), 86.

should be condemned on the basis of size only. Obviously, however, if the mere possession of the power to commit a wrongful act were itself a wrong, the number of unlawful status would increase to the extent of the number of possible natural and artificial persons multiplied by the number of possible offenses. Even to be guilty of an attempt to commit a crime, the mere power is not enough. The actor must take substantial steps in the direction of the criminal act. Certainly the mere possession of power to commit a wrongful act can only become a wrong when the wrongful use of the power is so likely to follow from its possession, and is so difficult to reach, in and of itself, that the mere possession of the power must be condemned as in itself illegal. No court has yet said, and it is believed no court should, in view of our recent experiences, undertake to say, that it is necessary to hold the mere possession of the power to exclude others by illegal practices itself illegal, in order to prevent the unlawful use of that power. It is enough to point to the combinations occupying a preponderant position in different industries which the government has recently investigated to make clear that since business has discovered that excluding purposes and practices are illegal, there has been an obvious tendency to abandon them entirely. This appears particularly in the case of United States v. Keystone Watch Case Co.,68 United States v. United States Steel Corporation,69 and United States v. American Can Co.70 The International Harvester Co." appears never to have indulged in any unlawful excluding practices, or to have had any excluding purposes.

10. In Mr. Brandeis' testimony only one suggestion has been found in support of his opinion that a combination occupying a preponderant position in the business may, by reason of its size alone, be "a menace to the community." It is as follows:

72

"I have considered and do consider that the proposition that mere bigness cannot be an offense against society is false, because I believe that our society, which rests upon democracy, cannot endure under such conditions. Something approaching equality is essential."

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72 Report of hearing before the Senate Committee on Interstate Commerce, supra,

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