appears when customers order the goods advertised and are told that the line has been sold out and substitutes are offered at higher prices.

On argument there was, and in Counsel's brief there is, a long discussion as to whether the Fair Sales Act, in prohibiting the selling of an article below cost, is contrary to public policy. Plaintiff relies upon cases in the Supreme Court of the United States, and State Reports, as follows:

"Lynch v. City of Long Branch, 167 Atl. 664; In re Merrill, 88 Eq. 261; 102 Atl. 400; Nebbia v. New York, 291 U. S. 502; State, ex rel. Doyle v. Newark, 34 N. J. L. 236; Miles Medical Co. v. Park, 220 U. S. 372; Park Sons Co. v. Hartman, 153 Fed. 24; Old Dearborn Dist. v. Seagram Distillers, 57 Sup. Ct. Rep. 139; Johnson & Johnson v. Weisbard, 191 Atl. 873; Boston Store v. Amer. Gramophone, 246 U. S. 8; Ingersoll v. Hahne, 88 N. J. E. 222; Tyson v. Banton, 273 U. S. 418."

I think that, at least, it is safe to say that the most enlightened judicial policy is to let people manage their own business in their own way, unless the ground for interference is very clear; as for example, the milk industry. I believe we cannot too greatly exaggerate the value and importance to the public of fixing a fair price in competition.

Fixing the price on all goods is a very different thing from fixing the price on one kind of article. The one means destruction of all competition and of all incentive to increase excellence of the product; the other means heightened competition and intensified incentive to increase quality.

Citing Wilentz v. Crown Laundry Service, Inc., 172 Atl. 332: "No common law right has been more firmly established or treasured than the right of the individual to sell his goods or his services at whatever price he and the purchaser might agree upon."

Although the Fair Sales Act might help a few selfish interests, it would be detrimental to the public as a whole. The buying public would be forced to purchase articles at higher prices, increasing the cost of living. The legislature fixing prices must be directed to articles which are affected with a public interest and not take away the common law rights of the people.

In Tinsman v. Belvidere Delaware Railroad Co., 26 N. J. L. 148, the Court stated that:

"Statutes in derogation of common law rights are to be strictly construed and we are not to infer that legislature intended to alter the common law practice any further than expressed, or any more than the case absolutely requires."

In the instant case, not only is the ground for interference by the legislature not "very clear," but no ground for any interference whatever has been shown, which in any manner whatsoever justifies the deprivations or limitations of the unquestioned rights of individuals. The Fair Sales Act, under the American concepts of government and economics, is a deprivation of clearly defined property rights without due process of law. It is not at all denied that there are many instances in which States do have the right to fix prices, or to state even more accurately, to limit or restrict the clear and unequivocal common law right of the individual to fix his own 118007 0-39-3

prices in free competition. The first and underlying question to settle is whether the defendant can be deprived of his common law right or even his constitutional right to fix his own prices. That this is so self-evident from the very words of Article IX, of the Federal Constitution, which states unequivocally:

"Rights reserved--the enumeration in the Constitution of certain rights, shall not be construed to deny or disparage other rights retained by the people."

The U. S. Supreme Court, in the case of Tyson v. Banton, 273 U. S. 418, at page 429, states:

"In the endeavor to reach a correct conclusion in respect to this inquiry, it will be helpful, by way of preface, to state certain pertinent considerations. The first of these is that the right of the owner to fix a price at which his property shall be sold or used is an inherent attribute of the property itself. Case of the State Freight Tax, 15 Wall. 232, 178 and, as such, within the protection of the due process of law clauses of the 5th and 14th Amendments. See City of Carrolton v. Bazzette, 159 Ill. 284, 294."

As previously stated, that it is not denied that there are instances in which the States can limit or restrict the right of the individual to fix his own prices. Those instances, as it is readily admitted by the plaintiff here, fall within a very narrow classification. In words so strong and clear that reasonable persons cannot possibly differ as to their meaning, the Supreme Court of the United States has given the formula. In Williams v. Standard Oil Co., 278 U. S. 235, the Court said, at page 239:

"It is settled by recent decisions of this Court that a State legislature is without constitutional power to fix prices at which commodities may be sold, services rendered, or property used, unless the business or property involved is "affected with a public interest." Wolff Co. V. Industrial Court, 262 U. S. 522; Tyson v. Banton, supra; Fairmont Co. v. Minnesota, 274 U. S. 1; Ribnik v. McBride, 277 U. S. 350. Nothing is gained by reiterating the statement that the phrase is indefinite. By repeated decisions of this Court, beginning with Munn v. Illinois, 94 U. S. 113, that phrase, however it may be characterized, has become the established test by which the legislative power to fix prices of commodities, use of property, or services, must be measured."

The question, "When is a business 'affected with a public interest," is answered in the same case at the bottom of pages 239 and 240, which state:

"As applied in particular instances, its meaning may be considered both from an affirmative and negative point of view. Affirmatively, it means that a business or property, in order to be affected with a public interest, must be such or be so employed as to justify the conclusions that it has been devoted to a public use and its use thereby in effect granted to the public. Tyson & Brother v. Banton, supra, p. 434. Negatively, it does not mean that a business is affected with a public interest merely because it is large or because the public is warranted in having a feeling of concern in respect

of its maintenance.

Id., p. 430. The meaning and application of the phrase are examined at length in the Tyson case, and we see no reason for restating what is there said."

It now becomes important in this case to inquire, "What business, if any, has been declared by the Fair Sales Act to be affected with the public interest.'" The Fair Sales Act declares not one single business enterprise to be so affected, and yet imposes restrictions upon all business. Under no sweeping conception of government or economics has there been such a sweeping deprivation of long cherished rights constitutionally reserved to the individuals, themselves, been justified under the law of the land. Even if the lebislature had declared in this Act that any business was so affected with a public interest as to justify the deprivation and right of the individual to fix his own prices that declaration would still be one for judicial decision. For, in the Tyson case, the Court said, at page 431:

"And, finally, the mere declaration by the legislature that a particular kind of property or business is affected with a public interest is not conclusive upon the question of the validity of the regulation. The matter is one which is always open to judicial inquiry. Wolff Co. v. Industrial Court, 262 U. S. 522, 536."

The plaintiff contends that this is not a price fixing bill, but is a bill only to put a floor under prices, and cites the 1935 Statutes of California, page 1546; Deering, Codes, Laws and Constitutional Amendments 1935, Supp. p. 2063, Act 8781, and in support thereof Miller v. Board of Public Works, 195 Cal. 477, 484; 234 page 381, 383; 38 A. L. R. 1479. Wholesale Tobacco Dealers Assn. v. National Candy & T. Co., 82 Pac. Rep., Second Series, p. 3. These cases cited are based upon the statute of California which is substantially different from our own; as well as Chapter 69 of the Acts of 1937 of Tennessee, citing Rust v. Griggs, 113 S. W., Second Series, 733 (Tenn.).

I, therefore, feel that the right of the individual to fix his own prices cannot be infringed or denied, except in certain cases falling in well defined limits, none of which are present here. Citing Ingersoll v. Hahne, 88 N. J. E. 222, affirmed 89 N. J. E. 332; Wilentz v. Crown Laundry, 116 N. J. E. 40; Tyson v. Banton, 273 U. S. 418; Ribnik v. McBride, 277 U. s. 350; Williams v. Standard Oil, 278 U. S. 355; Near v. Minnesota, 283 U. S. 697.

It is contended on the part of the plaintiff that the decision of the United States Supreme Court in the Nebbia case has altered the well established rules heretofore extended. Certainly all of the cases cited above, and many others too numerous to mention, have struck down as unconstitutional all price fixing statutes, except where the business subject to the operation of each such law was "affected with a public interest." Therefore, the question is, "Has the Nebbia case altered that firmly entrenched rule?" A study of the case will disclose that it has not. See the reported case of Nebbia v. New York, 291 U. S. 502, decided by the United States Supreme Court two days after the date on which the emergency statute there in question was to have expired by its own limitation.

The argument before the Highest Court disclosed that "The legislation is of a temporary nature" (at page 511) and that "the temporary and emergent character of the legislation being accepted, it is well within the police power." A reading of the case discloses the emergency, and the emergent character of the Act in all its details. Of greater importance, however, are two points: (1) The act was one relating, and limited, to one industry; milk. Nothing else was affected. (2) The milk industry was one very "vitally affected with the public interest." Those two points in and by themselves bring the Nebbia case squarely within the rules laid down and cases already cited, and by the same token, leave the Fair Sales Act under the same infirmities described in those cases. The defendant, stating excerpts from the Nebbia decision, discloses this to be clearly so. The Court said, at page 515:

"The question for decision is whether the Federal Constitution prohibits a State from so fixing the selling price of milk." And at page 521:

"Save the conduct of railroads, no business has been So thoroughly regimented and regulated by the State of New York as the milk industry."

And, further, at page 530:

"The milk industry in New York has been the subject of long standing regulation in public industry."

And, at the bottom of page 530:

"The industry disclosed destructive and demoralizing competitive conditions and unfair trade practices which resulted in retail price cutting and reduced the income of the farmer below the cost of production." (No such inquiry or disclosure

is shown in the instant case.)

And, at the bottom of page 536:

"The phrase 'affected with a public interest' in the nature of things, means no more than an industry for an adequate reason, is subject to control for the public good." Those words referring to only one industry, and not to all industries.

From examining the above cases, it is apparent that (1) the Act was a temporary emergency measure to cope with a hopelessly chaotic condition in one industry alone; (2) that the Act referred to and dealt with that one industry alone; and (3) that the one industry is as much if, indeed, not more than any other, vitally "affected with the public interest."

After careful consideration of the briefs filed in this matter, and examining the law pertinent to the question, I am of the opinion that the Act known as the Fair Sales Act is unconstitutional and I will, therefore, sustain the motion to dismiss the complaint filed in this case.

New Jersey is one of 28 states which thus far have enacted legislation commonly referred to as "Unfair Trade Acts." The other states include: Arizona, Arkansas, California, Colorado, Delaware, Florida, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, Pennsylvania, South Caroline, South Dakota, Tennessee, Utah, Wyoming, Connecticut (Retail Drug Control Act), Michigan (Unfair Practices · Bakery and Petroleum Products).

Act

At the present time there are in force in all but six states of the Union Statutes with respect to "Resale Price Maintenance." These are generally referred to as "Fair Trade Acts" and are to be distinguished from the "Unfair Trade Acts" referred to above. These State laws were discussed in detail in an article by the present writer entitled Resale Price Maintenance appearing in the February 1938 number of COMPARATIVE LAW SERIES. Although copies of the February number are exhausted, a reprint of the article was made and may be obtained for ten cents, or will be included free on request with new subscriptions or renewals to COMPARATIVE LAW SERIES.

BUREAU OF FOREIGN AND DOMESTIC COMMERCE

Analysis of Functions and Services

DIVISION OF ECONOMIC RESEARCH

XIII

The responsibilities of this Division, both the compilation of statistical data and the analysis of economic relationships, particularly in connection with domestic commercial and industrial problems are of a broad economic character. The present scope of its studies are arranged under the following sections: National Income Section Conducts research involving the evaluation of various income concepts, the development of methods of estimation, and the preparation of estimates of national and regional income.

Construction and Real Property Section - Compiles statistics upon the volume of activity and other aspects of construction. Also makes analytical studies of the trends in construction in terms of related economic factors.

Debt Section

Undertakes research in the field of public and private debt, in the United States. Especially concerned with historical studies of trends of different classes of debt and interest charges.

Industry Analysis Section Compiles analytical studies of the economic problems of particular industries.

Special Analysis Prepares special reports upon a wide range of studies such as national wealth, economic effects of particular forms of taxation and industrial relations.