COMBINATION IN TRADE is found in its main examples in joint stock companies, co-operative societies, and partnerships. Apart from these, however, are those trade combinations, the object of which is either the control of the production of certain commodities with a view to obtaining a monopoly, or the restriction in the buying and selling prices of commodities so as to maintain profits, or a monopoly of carriage and traffic. In all cases of combination, care has to be taken that the objects for which they arc created are not illegal, as being in restraint of trade and against public policy. 'In some cases, as in dealings with public stocks, an equal' care must be taken not to come within the purview of the criminal law. The control of production and distribution may be efFecated by combinations known as Pools, Syndicates, or Trusts ; but very frequently a particular combination exists under the form of an ordinary trading company. General forms of combination are not always necessary, for special agreements are often used, as where wholesale firms restrict their customers not to sell except under certain conditions, e.e. over the counter to bond fide retail purchasers, or only at a certain specified price. In order to enforce freedom of trade, the law will not punish those who make a perfectly honest agreement with a belief that it is fairly required for their protection. Suppose that in a small town there are two shops, sufficient for the wants of the neighbourhood, making only a small profit. They are threatened with a third. The two shopkeepers agree to warn the intending shopkeeper that if he comes they will lower prices, and can afford it longer than he. May they be indicted for conspiracy ? They certainly have conspired. If he, being warned, does not set up his shop, has he a cause of action ? He might be able to prove that he has suffered damage ; that alone would not be sufficient for him to succeed. Would a shipowner who had intended to send his ship to Shanghai, but had desisted owing to a combination amongst other shipowners to lower their freights to such a figure as would prevent the merchants using his ship, be entitled to maintain an action against such combination ? If he would be so entitled, why not every shipowner who could say he had a ship fit for the trade, but was deterred from using it ? To draw a line between fair and unfair competition, between what is reasonable and unreasonable, would pass the power of any Court.
Whatever one trader may do in respect of competition, may be done with equal lawfulness by a body or set of traders. If the rule were otherwise, a large capitalist could do what a number of small capitalists, combining together, could not do, and thus a blow would be struck at the very principle of co-operation and joint-stock enterprise. If the combination were in restraint of trade, it would be illegal, and the result would be that the agreements between the parties to it could not be enforced. This fact alone would prevent the continued existence of a combination in restraint of trade for none of the parties to it could sue each other. But they would not be necessarily committing any crime, even if parties to an illegal combination ; for agreements which are merely void and unenforceable would hardly be the basis of a crime. There is a great difference between illegality in agree ment and a criminal illegality.
For a combination to be in restraint of trade, its objects would be required to be against public policy. Public policy has been said by a learned judge to be an unruly horse, and one dangerous to ride ; and accord ingly it is a question which judges hesitate to decide. As one of their number has well said, they are more trusted as interpreters of the law than as expounders of what is called public policy. In these cases of public policy, there is never sufficient evidence as to the effect and consequences of the action complained of. To exclude others from a trade may be, in general, beneficial for a time to the public; but whenever a monopoly is likely to arise, with a consequent rise in prices, competition naturally arises also. See RESTRAINT OF ' DE. •