clubs or retail co-operative buying organisations or any brokerage or other combinations or any firm claiming to be strictly wholesale, unless such firm's name is on the list attached hereto, or afterwards added by notice from the Price Committee of the Ontario Wholesale Grocers' Guild or Quebec Wholesale Grocers' Guild, except as provided for under a special agreement with the Price Committee.

"6th, that, subject to the conditions as herein set forth, our terms on grocery starches to the wholesale trade as per list B, will be list prices, with a trade discount of 8 per cent. 30 days net, or 10 per cent. for cash in 15 days, and

"7th, conditional upon the wholesale trade, as per list B, not having sold grocery starches at less than list prices or on better terms of time and cash discount than 30 days, or 1 per cent. 10 days, also conditional upon the wholesale trade, as per list B, not having purchased directly or indirectly grocery starches, except of Canadian manufacture, and conditional upon the other terms of this agreement being strictly observed and lived up to, we will allow a further trade discount, payable quarterly, of 7 per cent., upon the purchaser signing the declaration as set forth in clause 8.

"Declaration.

"8th. We, the undersigned wholesale grocers, having complied with the terms of agreement A No. 6, dated the 26th January, 1905, between the starch manufacturers and the Price Committee of Ontario and Quebec Wholesale Grocers' Guilds, declare as follows:

"We have not sold nor have we permitted our travellers or salesmen to sell in the Province of Ontario or Quebec starches to the retail trade at less than current list prices (as issued by the said manufacturers from time to time), or on better terms of time and cash discount than 30 days or 1 per cent. for cash in 10 days. We have not ourselves accepted, nor have we permitted our travellers or salesmen to accept or agree to accept, from the manufacturers parties to this agreement any inducement in the form of extra discounts, bonuses of free goods, or in any other unprovided for way, beyond the trade discounts as set forth in clauses 6 and 7 of

said agreement. We have not permitted our salesmen, directly or indirectly, to take any part in the making up of orders between two or more retailers for direct shipment, freight paid, in 10-box lots, nor have we offered or permitted our salesmen to offer to the retail trade any inducements, in the form of free goods or other bonuses, that would indirectly be equal to a concession in price to the retailer. And we are entitled, in the terms of said agreement, to the discounts agreed upon for quarter ending (Signed)

wholesale grocer.'

"9th. The undersigned hereby agree that no order for special label goods shall be accepted unless for a bonâ fide order for 100 cases or over. Such special label to be provided or paid for by the buyer.

"10th, that, in the event of its being satisfactorily established to the Standing Committee of the Dominion Grocers' Guild that any wholesale buyer on list B attached hereto has in any way violated the selling prices and terms to the retail trade, by the giving of rebates, extra cash or trade discounts, extra time without interest, or in any other underhand or unprovided for way, or has sold at less than list prices or on better terms of time and cash discount to any firm claiming to be strictly wholesale, but not on the list attached hereto, and not direct buyers of starches, we, the undersigned, agree, upon receiving notice of same from the president of the Ontario Wholesale Grocers' Guild, or president of the Quebec Wholesale Grocers' Guild, to cancel all rebates to which such firm would otherwise be entitled for the quarter ending the period in which such violation occurred, and also agree not to sell such firm in future except at list prices, and no trade discount allowed until such firm subscribes to an agreement to carry out the terms of purchases and sale as set forth in this agreement.

"11th. This agreement to take effect on the 26th January, 1905."

(Signed by the St. Lawrence Starch Co. Limited.)

The list (B) attached was the same as that appended to the cereal agreement.

[The above are only a few of the documents relied on by the Crown as establishing their case against the defendants.]

TORONTO, January 7, 8, and 9, 1909.

G. T. Blackstock, K.C., and S. F. Washington, K.C., for the Crown. The prosecution is under sec. 498 of the Code and under the three sub-sections (b), (c), and (d); (b) is to restrain or injure trade and commerce; (c) is the clause dealing with unreasonably enhancing prices; and (d) is unduly preventing or lessening competition in the purchase, barter, sale, and supply of articles of trade and commerce. We do not rely upon (a). The Dominion Wholesale Grocers' Guild is composed of ninety-five per cent. of the wholesalers throughout the Dominion, and the objects for which the Guild was instituted are set forth in the printed book of by-laws. [Counsel referred to several of the exhibits and the testimony of some of the witnesses as establishing that a combine existed among the wholesale grocers.] There are certain natural laws of trade which it is important to keep steadily in mind in considering the question of whether there has or has not been a restraint of trade. One is that it is the right of every person to buy where he pleases and sell to whom he pleases and at the best price he can get; another, that he should be permitted to sell his goods where he pleases, and especially for what he pleases. It is the right of every man to go into whatever business he pleases or to remain out of any business he pleases. Trade knows no geographical lines; trade in its natural state flows in all directions, so that any restriction, anything which interferes with the natural flow of trade in any direction, is a restraint of that trade, to a greater or less extent, depending upon the circumstances. Everything which interferes with the natural operation of these laws is a restraint; protection is a restraint; the protective tariff is a restraint. Why was this legislation passed? The reasons are shortly set out by Clute, J., in Wampole & Co. v. Karn Co. (1906), 11 O.L.R. 619, 628. It is quite clear, upon the evidence, that certain channels of trade, e.g., wholesale houses with retail counters, large retail stores, co-operative institutions, departmental stores, were open until the Guild made its appearance and closed

them or tried to close them. Coercive measures were in effect taken by the Guild. The defendants called their measures "suggestion." When a highwayman with a pistol suggests to a traveller that he give up his watch, the traveller usually accedes to the suggestion. The enhancement of prices is shewn by the evidence of the defendants-the reason for the formation of the Guild was that the wholesalers required and demanded increased profits; they succeeded in getting them. Whenever there is an increase in profit, it comes out of the consumer. The maintenance of fixed prices also tends to enhance prices. The statute says "unreasonably enhance the price." The word "unreasonably" has not been defined by the Court, but "unduly," which probably has a similar significance, has been defined in Rex v. Elliott (1905), 9 Can. Cr. Cas. 505, 9 O.L.R. 648, 661, per Osler, J.A. Now, what is conspiracy? See Regina v. Parnell (1881), 14 Cox C.C. 508, 513, for a definition. A conspiracy is proved in this case to prevent the retail grocers from getting goods as they had been accustomed to do: there is a conspiracy at common law, apart from this statute altogether. See Regina v. Gibson (1889), 16 O.R. 704, decided before this statute. See also Quinn v. Leathem, [1901] A.C. 495. While it may be said that in this case the object of the Guild was lawful, the means they adopted to attain their object were unlawful and criminal. This case is not distinguishable from Rex v. Elliott, supra. See also The King v. Gage (1907-8), 13 Can. Crim. Cas. 415, 428; The King v. Clarke (1908), 9 W.L.R. 243, 14 Can. Crim. Cas. 46, 57. The evidence shews that the Guild had the power to do what they pleased with the manufacturers. and that they have done it. It is for the Court to say whether that is to continue or not. The conduct and design of the defendants contravene almost every sub-section of sec. 498. What these defendants have done is in restraint of and injury to trade. The central idea in the whole of their arrangements is that they should have an entire monopoly of this particular branch of trade. The Guilds decide who are the persons entitled to the benefit of the arrangements they are making. The defendants have unduly prevented the manufacture and production of articles and commodities, and also have un

reasonably enhanced the price thereof. The correspondence shews that the very idea which they had in mind was to prevent competition. Instead of the manufacturer being approached by a great crowd soliciting him to come down in his price, he now has a complacent body who allow him to fix his price; no protest against it as long as he does not advance to a point where it is absolutely prohibitive. There is a monopoly in the manufacture, there is a monopoly in the distribution, and therefore there is no competition, no aggressive assailing of the manufacturer, as there would be if he were open to the ordinary influences of trade. There is no competition among the wholesalers; the prices are fixed. The retailer is to some extent regarded in these arrangements, but not the public. If the Court reaches the conclusion, on this evidence, that the general arrangements made by these defendants are on the whole free from objection, informed by a proper spirit, conceived with proper idea, and aimed at the accomplishment of proper results, the Crown does not desire to see some details of their conduct which are objectionable fastened upon them for the purpose of finding them guilty of the charges that are preferred against them.

E. F. B. Johnston, K.C., E. H. Ambrose, and Eric N. Armour, for the defendants. In arriving at what is the true principle upon which a matter of this kind may be approached, and in dealing with it from a standpoint of either a legal or judicial character, the Court is not to be governed by technical rules of law as in ordinary cases: Jolly on Contracts in Restraint of Trade, pp. 1, 2, 3; Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co., [1894] A.C. 535, 552, 553, 556. The natural trade argument can have no application at the present moment. The whole state of trade, the whole condition of our law, the whole complex condition of society, are purely artificial. We cannot accept the doctrine that there should be absolutely a free right to trade and barter as between man and man; there must be regulation— reasonable regulation, we admit; or without it trade would be demoralised and the country bankrupt. The tariff itself, imposed by Act of Parliament, creates a highly artificial state of trade,