On appeals under the Criminal Appeals Act of 1907, this Court
has no jurisdiction to review the interpretation of the indictment
by the lower court, United States v. Patten, 226 U.
, and if that court has construed the count as
alleging a combination of a particular date to be in violation of
the Sherman Law, without regard to subsequent acts, this Court
cannot pass upon the validity of those acts.
A combination for greater efficiency does not necessarily
violate the Sherman Anti-Trust Act.
Where each of several groups is carrying on a legal business of
making patented machines which do not compete with each other,
although the machines of all the groups are used by manufacturers
of the same article, such as shoes, a combination of the several
groups does not violate the Sherman Anti-Trust Act.
Exclusion of competitors from making the patented article is of
the very essence of the right conferred by the patent.
Where the share in interstate commerce does not appear in the
record, and the machines in question are not alleged to be types of
all the machines used in manufacturing the article for which they
are made, the government cannot claim that a specified proportion
of the business was put into a single hand.
The disintegration aimed at by the Sherman Anti-Trust Act does
not extend to reducing all manufacture to isolated units of the
The Criminal Appeals Act of March 2, 1907, c. 2564, 34 Stat.
1246, is a special provision and, as it is not mentioned in the
repealing section of the Judicial Code of 1911 and is not
superseded by any other regulation of the matter, it was not
repealed by the Judicial Code. United States, Petitioner,
226 U. S. 420
The district court rightly held that the counts under review of
the indictment against various persons for combining their
Page 227 U. S. 203
manufacturing patented machines for making different parts of
shoes, and not competing with each other, did not constitute an
offense under the Sherman Anti-Trust Act.
195 F. 578 affirmed.
The facts, which involve the construction of the Sherman
Anti-Trust Act and determining whether the combination charged in
an indictment thereunder of various manufacturers of patented shoe
machinery constituted a violation thereof, are stated in the
Page 227 U. S. 214
MR. JUSTICE HOLMES delivered the opinion of the Court.
Page 227 U. S. 215
This is a writ of error to determine whether two counts in an
indictment, as construed by the district court, charge offenses
under the Sherman Act of July 2, 1890, c. 647, 26 Stat. 209. They
were held bad, on demurrer, by the district court.195 F. 578. The
two counts allege substantially the same facts, the first laying
them as a combination in restraint of the trade of the defendants
themselves, the second as a conspiracy in restraint of the trade of
others, shoe manufacturers.
The facts alleged are as follows: for the last twenty-five
years, practically all the shoes worn in the United States have
been made by the help of machines, grouped as lasting machines,
welt-sewing machines, and outsole-stitching machines, heeling
machines, and metallic fastening machines, there being a large
variety of machines in each group. (These machines, of course, are
not alleged to do all the work of making finished shoes.) There is
a great number of shoe factories, and because the machines are
expensive and the best of them patented, the manufacturers have had
to get them principally from the defendants. Before and up to
February 7, 1899, the defendants Winslow, Hurd, and Brown, through
the Consolidated and McKay Lasting Machine Company, under letters
patent, made sixty percent of all the lasting machines made in the
United States; the defendants Barbour and Howe, through the
Goodyear Shoe Machinery Company, in like manner made eighty percent
of all the welt-sewing machines and outsole-stitching machines, and
ten percent of all the lasting machines, and the defendant Storrow
(against whom the indictment has been dismissed), through the McKey
Shoe Manufacturing Company, made seventy percent of all the heeling
machines and eighty percent of all the metallic fastening machines
made in the United States. The defendants all were carrying on
commerce among the states with such of the
Page 227 U. S. 216
shoe manufacturers as are outside Massachusetts, the state where
the defendants made their machines.
On February 7, 1899, the three groups of defendants above named,
up to that time separate, organized the United Shoe Machinery
Company, and turned over to that company the stocks and business of
the several corporations that they respectively controlled. The new
company now makes all the machines that had been made in different
places at a single new factory at Beverly, Massachusetts, and
directly, or through subsidiary companies, carries on all the
commerce among the states that had been carried on independently by
the constituent companies before. The defendants have ceased to
sell shoe machinery to the shoe manufacturers. Instead, they only
let machines, and on the condition that, unless the shoe
manufacturers use only machines of the kinds mentioned, furnished
by the defendants, or if they use any such machines furnished by
other machinery makers, then all machines let by the defendants
shall be taken away. This condition they constantly have enforced.
The defendants are alleged to have done the acts recited with
intent unreasonably to extend their monopolies, rights, and control
over commerce among the states, to enhance the value of the same at
the expense of the public, and to discourage others from inventing
and manufacturing machines for the work done by those of the
defendants. The organization of the new company and the turning
over of the stocks and business to it are alleged to constitute a
breach of the Sherman Act.
It is to be observed that the conditions now inserted in the
leases are not alleged to have been contemporaneous with the
combination, or to have been contemplated when it was made. The
district court construed the indictment as confined to the
combination of February 7 -- that is, simply to the merger of the
companies, without regard to the leases subsequently made, 195 F.
Page 227 U. S. 217
and we have no jurisdiction to review this interpretation of the
indictment. United States v. Patten, 226 U.
. Hence, the only question before us is whether
that combination, taken by itself, was within the penalties of the
Sherman Act. The validity of the leases, or of a combination
contemplating them, cannot be passed upon in this case.
Thus limited, the question does not require lengthy discussion,
and a large part of the argument addressed to us concerned matters
not open here. On the face of it, the combination was simply an
effort after greater efficiency. The business of the several groups
that combined, as it existed before the combination, is assumed to
have been legal. The machines are patented, making them is a
monopoly in any case, the exclusion of competitors from the use of
them is of the very essence of the right conferred by the patents,
Paper Bag Patent Case, 210 U. S. 405
210 U. S. 429
and it may be assumed that the success of the several groups was
due to their patents having been the best. As, by the
interpretation of the indictment below (195 F. 591) and by the
admission in argument before us, they did not compete with one
another, it is hard to see why the collective business should be
any worse than its component parts. It is said that from seventy to
eighty percent of all the shoe machinery business was put into a
single hand. This is inaccurate, since the machines in question are
not alleged to be types of all the machines used in making shoes,
and since the defendants' share in commerce among the states does
not appear. But taking it as true, we can see no greater objection
to one corporation manufacturing seventy percent of three
noncompeting groups of patented machines collectively used for
making a single product than to three corporations making the same
proportion of one group each. The disintegration aimed at by the
statute does not extend to reducing all manufacture to isolated
units of the lowest degree.
Page 227 U. S. 218
It is as lawful for one corporation to make every part of a
steam engine, and to put the machine together, as it would be for
one to make the boilers and another to make the wheels. Until the
one intent is nearer accomplishment than it is by such a
juxtaposition alone, no intent could raise the conduct to the
dignity of an attempt. See Virtue v. Creamery Package
Manufacturing Co. ante,
p. 8; Swift & Co. v. United
States, 196 U. S. 375
196 U. S.
It was argued as an afterthought that the Act of March 2, 1907,
c. 2564, 34 Stat. 1246, under which the United States took this
writ of error was repealed by the Judicial Code of March 3, 1911,
c. 231, 36 Stat. 1087, 1168. But it is not mentioned among the
statutes expressly repealed by § 297 of the latter act, it is not
superseded by any other regulations of the matter, it is a special
provision, and on principles similar to those discussed in Ex
Parte United States, 226 U. S. 420
must be held not to have been repealed. See further Johnson v.
United States, 225 U. S. 405
225 U. S. 419
Petri v. Creelman Lumber Co., 199 U.
, 199 U. S.