the sum of values of goods for most men is diminished.  All citizens thus that are the victims of an artificially created scarcity look upon monopoly as “bad,” just as they do upon the evils of nature—­drought, locusts, fires, and pestilence.  A monopoly has an indirect and more distant effect upon the spirit of all those trading with it.  If they are producers selling at prices depressed by monopoly, their money incomes are reduced; if they are consumers buying at monopoly prices, their real-incomes are reduced; in either case their psychic incomes, the motives of all industry, are diminished, and their industrial energies are relaxed.

Sec. 4. #Common law on restraint of trade.# The first recorded case in English law, wherein the courts sought to prevent the limiting of competition by agreement, runs back to the year 1415, in the reign of Henry V. This was a very simple case of a contract in restraint of trade, whereby a dyer agreed not to practise his craft within the town for half a year.  The court declared the contract illegal (and hence unenforceable in a court) and administered a severe reproof to the craftsman who made it.  Thus was set forth the doctrine of the moral and legal obligation of each economic agent to compete fully, freely, and without restraint upon his action, even restraint imposed upon himself by a contract voluntarily entered into for his own advantage.

Not until the eighteenth century was this rigid doctrine somewhat relaxed so as to permit the sale of the “good will” of a business under limited conditions, and some “reasonable” contracts in restraint of trade.  Later the emphasis was somewhat further shifted, by judicial interpretations, from the notion of free competition to that of “fair” competition, so as to permit contracts involving moderate restraint of trade, if the essential element of competition was retained.  Thus it was said that a piano manufacturer might by contract grant an exclusive agency to a dealer in a certain territory, there being many other competing makes of pianos, and such a contract “does not operate to suppress competition nor to regulate the production or sale of any commodity."[4] But with such moderate limitations the courts in cases under the common law have steadily disapproved contracts in restraint of trade that would appear to be to the disadvantage of third parties, whether producers or consumers.

Sec. 5. #Growing disapproval of combination.# The attitude of the courts became in one respect stricter.  Some earlier cases involved the doctrine that what is lawful for an individual to do alone is lawful if done in combination with others.  Indeed, a comparatively recent case[5] declared regarding a group of dealers, agreeing not to deal with another, that “desire to free themselves from competition was a sufficient excuse” for such action.  But the general trend has been to the doctrine that a combination of men “has hurtful powers and influences not possessed by the individual.”