The Board of Trade of Chicago, a commercial center through which most of Chicago’s grain trade occurred, passed a “call rule,” requiring that all trades of grain “to arrive” after hours be at the “call price” (the last bid at the close of the market).
The Court ruled that the true test of a restraint is whether it regulates and promotes competition or suppresses and destroys competition. The “call rule” was a reasonable regulation of business consistent.
- Baker suggests that the Court saw this as the government attempting to remove the “reasonable” from Sherman § 1 after Standard Oil.
- Prior to the enactment of the call rule, sales of grain “to arrive” were dominated by a four or five warehouse owners.
- Grain “to arrive” was a very small percentage of all business.
- The Court required consideration of three categories of factors: nature, scope, & effects.
- Factors laid out:
- Facts particular to the business
- Conditions of business before and after restraint imposed
- Nature of the Restraint
- Effect, actual or probable
- History and purpose of the restraint
- Evil believed to exist
- Reason for adopting particular remedy
- Purpose or end sought to be attained
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