The monopoly and restraint denounced by the Act of July 2, 1890,
c. 647, 26 Stat. 209, "to protect trade and commerce against
unlawful restraints and monopolies," are a monopoly in interstate
and international trade or commerce, and not a monopoly in the
manufacture of a necessary of life.
The American Sugar Refining Company, a corporation existing
under the laws of the New Jersey, being in control of a large
majority of the manufactories of refined sugar in the United
States, acquired, through the purchase of stock in four
Philadelphia refineries, such disposition over those manufactories
throughout the United States as gave it a practical monopoly of the
business.
Held that the result of the transaction was the
creation of a monopoly in the manufacture of a necessary of life,
which could not be suppressed under the provisions of the Act of
July 2, 1890, c. 647, 26 Stat. 209, "to protect trade and commerce
against unlawful restraints and monopolies," in the mode attempted
in this suit, and that the acquisition of Philadelphia refineries
by a New Jersey corporation, and the business of sugar refining in
Pennsylvania, bear no direct relation to commerce between the
states or with foreign nations.
Page 156 U. S. 2
This was a bill filed by the United States against E. C. Knight
Company and others, in the Circuit Court of the United States for
the Eastern District of Pennsylvania, charging that the defendants
had violated the provisions of an Act of Congress approved July 2,
1890, c. 647, entitled, "An act to protect trade and commerce
against unlawful restraints and monopolies," 26 Stat. 209,
providing that
"[e]very contract, combination in the form of trust, or
otherwise, or conspiracy in restraint of trade and commerce among
the several states is illegal, and that persons who shall
monopolize or shall attempt to monopolize, or combine or conspire
with other persons to monopolize trade and commerce among the
several states, shall be guilty of a misdemeanor."
The bill alleged that the defendant the American Sugar Refining
Company was incorporated under and by virtue of the laws of New
Jersey, whose certificate of incorporation named the places in New
Jersey and New York at which its principal business was to be
transacted, and several other states in which it proposed to carry
on operations, and stated the objects for which said company was
formed were "the purchase, manufacture, refining, and sale of
sugar, molasses, and melads, and all lawful business incidental
thereto;" that the defendant E. C. Knight Company was incorporated
under the laws of Pennsylvania "for the purpose of importing,
manufacturing, refining, and dealing in sugars and molasses" at the
City of Philadelphia; that the defendant the Franklin Sugar Company
was incorporated under the laws of Pennsylvania "for the purpose of
the manufacture of sugar and the purchase of raw material for that
purpose" at Philadelphia; that the defendant Spreckels Sugar
Refining Company was incorporated under the laws of
Pennsylvania
"for the purpose of refining sugar, which will involve the
buying of the raw material therefor, the selling the manufactured
product, and of doing whatever else shall be incidental to the said
business of refining"
at the City of Philadelphia; that the defendant the Delaware
Sugar House was incorporated under the laws of Pennsylvania
"for the purpose of the manufacture of sugar and syrups, and
preparing the same for
Page 156 U. S. 3
market, and the transaction of such work or business as may be
necessary or proper for the proper management of the business of
manufacture."
It was further averred that the four defendants last named were
independently engaged in the manufacture and sale of sugar until or
about March 4, 1892; that the product of their refineries amounted
to thirty-three percent of the sugar refined in the United States;
that they were competitors with the American Sugar Refining
Company; that the products of their several refineries were
distributed among the several states of the United States, and the
all the companies were engaged in trade or commerce with the
several states and with foreign nations; that the American Sugar
Refining Company had, on or prior to March 4, 1892, obtained the
control of all the sugar refineries of the United States with the
exception of the Revere of Boston and the refineries of the four
defendants above mentioned; that the Revere produced annually about
two percent of the total amount of sugar refined.
The bill then alleged that in order that the American Sugar
Refining Company might obtain complete control of the price of
sugar in the United States, that company, and John E. Searles, Jr.,
acting for it, entered into an unlawful and fraudulent scheme to
purchase the stock, machinery, and real estate of the other four
corporations defendant, by which they attempted to control all the
sugar refineries for the purpose of restraining the trade thereof
with other states as theretofore carried on independently by said
defendants; that in pursuance of this scheme, on or about March 4,
1892, Searles entered into a contract with the defendant Knight
Company and individual stockholders named for the purchase of all
the stock of that company, and subsequently delivered to the
defendants therefor in exchange shares of the American Sugar
Refining Company; that on or about the same date, Searles entered
into a similar contract with the Spreckels Company and individual
stockholders, and with the Franklin Company and stockholders, and
with the Delaware Sugar House and stockholders. It was further
averred that the American Sugar Refining Company monopolized the
manufacture and
Page 156 U. S. 4
sale of refined sugar in the United States, and controlled the
price of sugar; that in making the contracts, Searles and the
American Sugar Refining Company combined and conspired with the
other defendants to restrain trade and commerce in refined sugar
among the several states and foreign nations, and that the said
contracts were made with the intent to enable the American Sugar
Refining Company to restrain the sale of refined sugar in
Pennsylvania and among the several states, and to increase the
regular price at which refined sugar was sold, and thereby to exact
and secure large sums of money from the State of Pennsylvania, and
from the other states of the United States, and from all other
purchasers, and that the same was unlawful, and contrary to the
said act.
The bill called for answers under oath, and prayed:
"1. That all and each of the said unlawful agreements made and
entered into by and between the said defendants on or about the 4th
day of March, 1892, shall be delivered up, cancelled, and declared
to be void, and that the said defendants the American Sugar
Refining Company and John E. Searles, Jr., be ordered to deliver to
the other said defendants respectively the shares of stock received
by them in performance of the said contracts, and that the other
said defendants be ordered to deliver to the said defendants the
American Sugar Refining Company and John E. Searles, Jr., the
shares of stock received by them respectively in performance of the
said contracts."
"2. That an injunction issue preliminary until the final
determination of this cause, and perpetual thereafter, preventing
and restraining the said defendants from the further performance of
the terms and conditions of the said unlawful agreements."
"3. That an injunction may issue preventing and restraining the
said defendants from further and continued violations of the said
act of Congress approved July 2, 1890."
"4. Such other and further relief as equity and justice may
require in the premises."
Answers were filed, and evidence taken, which was thus
Page 156 U. S. 5
sufficiently summarized by Judge Butler in his opinion in the
circuit court:
"The material facts proved are that the American Sugar Refining
Company, one of the defendants, is incorporated under the laws of
New Jersey, and has authority to purchase, refine, and sell sugar;
that the Franklin Sugar Refinery, the E. C. Knight Company, the
Spreckels Sugar Refinery, and the Delaware Sugar House were
incorporated under the laws of Pennsylvania, and authorized to
purchase, refine, and sell sugar; that the four latter Pennsylvania
companies were located in Philadelphia, and, prior to March, 1892,
produced about thirty-three percent of the total amount of sugar
refined in the United States, and were in active competition with
the American Sugar Refining Company, and with each other, selling
their product wherever demand was found for it throughout the
United States; that prior to March, 1892, the American Sugar
Refining Company had obtained control of all refineries in the
United States excepting the four located in Philadelphia and that
of the Revere Company in Boston, the latter producing about two
percent of the amount refined in this country; that in March, 1892,
the American Sugar Refining Company entered into contracts (on
different dates) with the stockholders of each of the Philadelphia
corporations named whereby it purchased their stock, paying
therefor by transfers of stock in its company; that the American
Sugar Refining Company thus obtained possession of the Philadelphia
refineries and their business; that each of the purchases was made
subject to the American Sugar Refining Company's obtaining
authority to increase its stock $25,000,000; that this assent was
subsequently obtained, and the increase made; that there was no
understanding or concert of action between the stockholders of the
several Philadelphia companies respecting the sales, but that those
of each company acted independently of those of the others, and in
ignorance of what was being done by such others; that the
stockholders of each company acted in concert with each other,
understanding and intending that all the stock and property of the
company should be sold; that the contract of sale in each instance
left the sellers free to establish other refineries
Page 156 U. S. 6
and continue the business if they should see fit to do so, and
contained no provision respecting trade or commerce in sugar, and
that no arrangement or provision on this subject has been made
since; that since the purchase, the Delaware Sugar House Refinery
has been operated in conjunction with the Spreckels Refinery, and
the E. C. Knight Refinery in connection with the Franklin, this
combination being made apparently for reasons of economy in
conducting the business; that the amount of sugar refined in
Philadelphia has been increased since the purchases; that the price
has been slightly advanced since that event, but is still lower
than it had been for some years before, and up to within a few
months of the sales; that about ten percent of the sugar refined
and sold in the United States is refined in other refineries than
those controlled by the American Sugar Refining Company; that some
additional sugar is produced in Louisiana and some is brought from
Europe, but the amount is not large in either instance."
"The object in purchasing the Philadelphia refineries was to
obtain a greater influence or more perfect control over the
business of refining and selling sugar in this country."
The circuit court held that the facts did not show a contract,
combination, or conspiracy to restrain or monopolize trade or
commerce "among the several states or with foreign nations," and
dismissed the bill. 60 F. 306. The cause was taken to the Circuit
Court of Appeals for the Third Circuit, and the decree affirmed. 60
F. 934. This appeal was then prosecuted. The Act of Congress of
July 2, 1890, is as follows:
"An act to protect trade and commerce against unlawful
restraints and monopolies."
"SEC 1. Every contract, combination in the form of trust or
otherwise, or conspiracy, in restraint of trade or commerce among
the several states, or with foreign nations is hereby declared to
be illegal. Every person who shall make any such contract or engage
in any such combination or conspiracy shall be deemed guilty of a
misdemeanor, and, on conviction thereof, shall be punished by a
fine not exceeding five thousand dollars, or by imprisonment not
exceeding one
Page 156 U. S. 7
year, or by both said punishments, in the discretion of the
court."
"SEC. 2. Every person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person or
persons, to monopolize any part of the trade or commerce among the
several states or with foreign nations shall be deemed guilty of a
misdemeanor, and on conviction thereof shall be punished by fine
not exceeding five thousand dollars, or by imprisonment not
exceeding one year, or by both said punishments, in the discretion
of the court."
"SEC. 3. Every contract, combination in form of trust or
otherwise, or conspiracy in restraint of trade or commerce in any
territory of the United States or of the District of Columbia, or
in restraint of trade or commerce between any such territory and
another, or between any such territory or territories and any state
or states or the District of Columbia, or with foreign nations, or
between the District of Columbia and any state or states or foreign
nations, is hereby declared illegal. Every person who shall make
any such contract or engage in any such combination or conspiracy
shall be deemed guilty of a misdemeanor, and, on conviction
thereof, shall be punished by a fine not exceeding five thousand
dollars or by imprisonment not exceeding one year, or by both said
punishments, in the discretion of the court."
"SEC. 4. The several circuit courts of the United States are
hereby invested with jurisdiction to prevent and restrain
violations of this act, and it shall be the duty of the several
district attorneys of the United States, in their respective
districts, under the direction of the Attorney General, to
institute proceedings in equity to prevent and restrain such
violations. Such proceedings may be by way of petition setting
forth the case and praying that such violation shall be enjoined or
otherwise prohibited. When the parties complained of shall have
been duly notified of such petition, the court shall proceed as
soon as may be to the hearing and determination of the case, and
pending such petition and before final decree, the court may at any
time make such temporary
Page 156 U. S. 8
restraining order or prohibition as shall be deemed just in the
premises."
"SEC. 5. Whenever it shall appear to the court before which any
proceeding under section four of this act may be pending, that the
ends of justice require that other parties should be brought before
the court, the court may cause them to be summoned, whether they
reside in the district in which the court is held or not, and
subpoenas to that end may be served in any district by the marshal
thereof."
"SEC. 6. Any property owned under any contract or by any
combination, or pursuant to any conspiracy (and being the subject
thereof) mentioned in section one of this act, and being in the
course of transportation from one state to another, or to a foreign
country, shall be forfeited to the United States, and may be seized
and condemned by like proceedings as those provided by law for the
forfeiture, seizure, and condemnation of property imported into the
United States contrary to law."
"SEC. 7. Any person who shall be injured in his business or
property by any other person or corporation by reason of anything
forbidden or declared to be unlawful by this act may sue therefor
in any circuit court of the United States in the district in which
the defendant resides or is found, without respect to the amount in
controversy, and shall recover threefold the damages by him
sustained, and the costs of suit, including a reasonable attorney's
fee."
"SEC. 8. That the word 'person,' or 'persons,' wherever used in
this act, shall be deemed to include corporations and associations
existing under or authorized by the laws of either the United
States, the laws of any of the territories, the laws of any state,
or the laws of any foreign country."
26 Stat. 209, c. 647.
Page 156 U. S. 9
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
By the purchase of the stock of the four Philadelphia refineries
with shares of its own stock the American Sugar Refining Company
acquired nearly complete control of the manufacture of refined
sugar within the United States. The bill charged that the contracts
under which these purchases were made constituted combinations in
restraint of trade, and that in entering into them, the defendants
combined and conspired to restrain the trade and commerce in
refined sugar among the several states and with foreign nations,
contrary to the Act of Congress of July 2, 1890.
The relief sought was the cancellation of the agreements under
which the stock was transferred, the redelivery of the stock to the
parties respectively, and an injunction against the further
performance of the agreements and further violations of the act. As
usual, there was a prayer for general relief, but only such relief
could be afforded under that prayer as would be agreeable to the
case made by the bill and consistent with that specifically prayed.
And as to the injunction asked, that relief was ancillary to and in
aid of the primary equity, or ground of suit, and, if that failed,
would fall with it. That ground here was the existence of contracts
to monopolize interstate or international trade or commerce, and to
restrain such trade or commerce which, by the provisions of the
act, could be rescinded, or operations thereunder arrested.
In commenting upon the statute, 21 Jac. I. c. 3, at the
commencement of chapter 85 of the third institute, entitled
"Against Monopolists, Propounders, and Projectors," Lord Coke, in
language often quoted, said:
"It appeareth by the preamble of this act (as a judgment in
Parliament) that all grants of monopolies are against the ancient
and fundamental laws of this kingdome. And therefore it is
necessary to define what a monopoly is."
"A monopoly is an institution, or allowance by the King by his
grant, commission, or otherwise to any person or persons, bodies
politique, or corporate, of or for the sole
Page 156 U. S. 10
buying, selling, making, working, or using of anything, whereby
any person or persons, bodies politique, or corporate, are sought
to be restrained of any freedome or liberty that they had before or
hindred in their lawfull trade."
"For the word 'monopoly,'
dicitur [Greek phrase] (i.
solo,) [Greek phrase] (i.
vendere)
quodest
cum unus solus aliquod genus mercaturae universum vendit, ut solus
vendat, pretium and suum libitum statuens: hereof you may read
more at large in that case. Trin. 44 Eliz. Lib. 11, f. 84, 85;
le case de monopolies."
3 Inst. 181.
Counsel contend that this definition, as explained by the
derivation of the word, may be applied to all cases in which "one
person sells alone the whole of any kind of marketable thing, so
that only he can continue to sell it, fixing the price at his own
pleasure," whether by virtue of legislative grant or agreement;
that the monopolization referred to in the act of Congress is not
confined to the common law sense of the term as implying an
exclusive control, by authority, of one branch of industry without
legal right of any other person to interfere therewith by
competition or otherwise, but that it includes engrossing as well,
and covers controlling the market by contracts securing the
advantage of selling alone or exclusively all or some considerable
portion of a particular kind or merchandise or commodity to the
detriment of the public, and that such contracts amount to that
restraint of trade or commerce declared to be illegal. But the
monopoly and restraint denounced by the act are the monopoly and
restraint of interstate and international trade or commerce, while
the conclusion to be assumed on this record is that the result of
the transaction complained of was the creation of a monopoly in the
manufacture of a necessary of life.
In the view which we take of the case, we need not discuss
whether, because the tentacles which drew the outlying refineries
into the dominant corporation were separately put out, therefore
there was no combination to monopolize; or because, according to
political economists, aggregations of capital may reduce prices,
therefore the objection to concentration of power is relieved, or,
because others were theoretically left
Page 156 U. S. 11
free to go into the business of refining sugar, and the original
stockholders of the Philadelphia refineries, after becoming
stockholders of the American Company, might go into competition
with themselves, or, parting with that stock, might set up again
for themselves, therefore no objectionable restraint was
imposed.
The fundamental question is whether, conceding that the
existence of a monopoly in manufacture is established by the
evidence, that monopoly can be directly suppressed under the act of
Congress in the mode attempted by this bill.
It cannot be denied that the power of a state to protect the
lives, health, and property of its citizens, and to preserve good
order and the public morals, "the power to govern men and things
within the limits of its dominion," is a power originally and
always belonging to the states, not surrendered by them to the
general government nor directly restrained by the Constitution of
the United States and essentially exclusive. The relief of the
citizens of each state from the burden of monopoly and the evils
resulting from the restraint of trade among such citizens was left
with the states to deal with, and this Court has recognized their
possession of that power even to the extent of holding that an
employment or business carried on by private individuals, when it
becomes a matter of such public interest and importance as to
create a common charge or burden upon the citizen -- in other
words, when it becomes a practical monopoly, to which the citizen
is compelled to resort, and by means of which a tribute can be
exacted from the community -- is subject to regulation by state
legislative power. On the other hand, the power of Congress to
regulate commerce among the several states is also exclusive. The
Constitution does not provide that interstate commerce shall be
free, but, by the grant of this exclusive power to regulate it, it
was left free except as Congress might impose restraints. Therefore
it has been determined that the failure of Congress to exercise
this exclusive power in any case is an expression of its will that
the subject shall be free from restrictions or impositions upon it
by the several states, and if a law passed by a state in the
exercise of its acknowledged powers comes into conflict
Page 156 U. S. 12
with that will, the Congress and the state cannot occupy the
position of equal opposing sovereignties, because the Constitution
declares its supremacy, and that of the laws passed in pursuance
thereof, and that which is not supreme must yield to that which is
supreme. "Commerce undoubtedly is traffic," said Chief Justice
Marshall,
"but it is something more; it is intercourse. It describes the
commercial intercourse between nations and parts of nations in all
its branches, and is regulated by prescribing rules for carrying on
that intercourse."
That which belongs to commerce is within the jurisdiction of the
United States, but that which does not belong to commerce is within
the jurisdiction of the police power of the state.
Gibbons v.
Ogden, 9 Wheat. 1,
22 U. S. 210;
Brown v.
Maryland, 12 Wheat. 419,
25 U. S. 448;
The License
Cases, 5 How. 599;
Mobile v. Kimball,
102 U. S. 691;
Bowman v. Chicago & N.W. Railway, 125 U.
S. 465;
Leisy v. Hardin, 135 U.
S. 100;
In re Rahrer, 140 U.
S. 545,
140 U. S.
555.
The argument is that the power to control the manufacture of
refined sugar is a monopoly over a necessary of life, to the
enjoyment of which by a large part of the population of the United
States interstate commerce is indispensable, and that therefore the
general government, in the exercise of the power to regulate
commerce, may repress such monopoly directly and set aside the
instruments which have created it. But this argument cannot be
confined to necessaries of life merely, and must include all
articles of general consumption. Doubtless the power to control the
manufacture of a given thing involves, in a certain sense, the
control of its disposition, but this is a secondary, and not the
primary, sense, and although the exercise of that power may result
in bringing the operation of commerce into play, it does not
control it, and affects it only incidentally and indirectly.
Commerce succeeds to manufacture, and is not a part of it. The
power to regulate commerce is the power to prescribe the rule by
which commerce shall be governed, and is a power independent of the
power to suppress monopoly. But it may operate in repression of
monopoly whenever that comes within the rules by which commerce is
governed, or whenever the transaction is itself a monopoly of
commerce.
Page 156 U. S. 13
It is vital that the independence of the commercial power and of
the police power, and the delimitation between them, however
sometimes perplexing, should always be recognized and observed, for
while the one furnishes the strongest bond of union, the other is
essential to the preservation of the autonomy of the states as
required by our dual form of government, and acknowledged evils,
however grave and urgent they may appear to be, had better be
borne, than the risk be run, in the effort to suppress them, of
more serious consequences by resort to expedients of even doubtful
constitutionality.
It will be perceived how far-reaching the proposition is that
the power of dealing with a monopoly directly may be exercised by
the general government whenever interstate or international
commerce may be ultimately affected. The regulation of commerce
applies to the subjects of commerce, and not to matters of internal
police. Contracts to buy, sell, or exchange goods to be transported
among the several states, the transportation and its
instrumentalities, and articles bought, sold, or exchanged for the
purposes of such transit among the states or put in the way of
transit, may be regulated; but this is because they form part of
interstate trade or commerce. The fact that an article is
manufactured for export to another state does not, of itself, make
it an article of interstate commerce, and the intent of the
manufacturer does not determine the time when the article or
product passes from the control of the state and belongs to
commerce. This was so ruled in
Coe v. Errol, 116 U.
S. 517, in which the question before the Court was
whether certain logs cut at a place in New Hampshire and hauled to
a river town for the purpose of transportation to the State of
Maine were liable to be taxed like other property in the State of
New Hampshire. Mr. Justice Bradley, delivering the opinion of the
Court, said:
"Does the owner's state of mind in relation to the goods -- that
is, his intent to export them, and his partial preparation to do so
-- exempt them from taxation? This is the precise question for
solution. . . . There must be a point of time when they cease to be
governed exclusively by the domestic
Page 156 U. S. 14
law and begin to be governed and protected by the national law
of commercial regulation, and that moment seems to us to be a
legitimate one for this purpose in which they commence their final
movement from the State of their origin to that of their
destination."
And again, in
Kidd v. Pearson, 128 U. S.
1,
128 U. S. 20,
128 U. S. 24,
where the question was discussed whether the right of a state to
enact a statute prohibiting within its limits the manufacture of
intoxicating liquors except for certain purposes could be
overthrown by the fact that the manufacturer intended to export the
liquors when made, it was held that the intent of the manufacturer
did not determine the time when the article or product passed from
the control of the state and belonged to commerce, and that
therefore the statute, in omitting to except from its operation the
manufacture of intoxicating liquors within the limits of the state
for export, did not constitute an unauthorized interference with
the right of Congress to regulate commerce. And Mr. Justice Lamar
remarked:
"No distinction is more popular to the common mind, or more
clearly expressed in economic and political literature, than that
between manufacture and commerce. Manufacture is transformation --
the fashioning of raw materials into a change of form for use. The
functions of commerce are different. The buying and selling, and
the transportation incidental thereto, constitute commerce, and the
regulation of commerce in the constitutional sense embraces the
regulation at least of such transportation. . . . If it be held
that the term includes the regulation of all such manufactures as
are intended to be the subject of commercial transactions in the
future, it is impossible to deny that it would also include all
productive industries that contemplate the same thing. The result
would be that Congress would be invested, to the exclusion of the
states, with the power to regulate not only manufactures, but also
agriculture, horticulture, stock raising, domestic fisheries,
mining -- in short, every branch of human industry. For is there
one of them that does not contemplate more or less clearly an
interstate or foreign market? Does not the wheat grower of the
Northwest and the cotton planter of the
Page 156 U. S. 15
South plant, cultivate, and harvest his crop with an eye on the
prices at Liverpool, New York, and Chicago? The power being vested
in Congress and denied to the states, it would follow as an
inevitable result that the duty would devolve on Congress to
regulate all of these delicate, multiform, and vital interests --
interests which in their nature are, and must be, local in all the
details of their successful management. . . . The demands of such
supervision would require not uniform legislation generally
applicable throughout the United States, but a swarm of statutes
only locally applicable and utterly inconsistent. Any movement
towards the establishment of rules of production in this vast
country, with its many different climates and opportunities, would
only be at the sacrifice of the peculiar advantages of a large part
of the localities in it, if not of everyone of them. On the other
hand, any movement towards the local, detailed, and incongruous
legislation required by such interpretation would be about the
widest possible departure from the declared object of the clause in
question. Nor this alone. Even in the exercise of the power
contended for, Congress would be confined to the regulation not of
certain branches of industry, however numerous, but to those
instances in each and every branch where the producer contemplated
an interstate market. These instances would be almost infinite, as
we have seen, but still there would always remain the possibility,
and often it would be the case, that the producer contemplated a
domestic market. In that case, the supervisory power must be
executed by the state, and the interminable trouble would be
presented that whether the one power or the other should exercise
the authority in question would be determined not by any general or
intelligible rule, but by the secret and changeable intention of
the producer in each and every act of production. A situation more
paralyzing to the state governments, and more provocative of
conflicts between the general government and the states, and less
likely to have been what the framers of the Constitution intended,
it would be difficult to imagine."
And see 55 U. S. Moor,
14 How. 568,
55 U. S.
574.
In
Gibbons v. Ogden, Brown v. Maryland, and other
cases
Page 156 U. S. 16
often cited, the state laws, which were held inoperative, were
instances of direct interference with or regulations of interstate
or international commerce; yet in
Kidd v. Pearson, the
refusal of a state to allow articles to be manufactured within her
borders, even for export, was held not to directly affect external
commerce, and state legislation which in a great variety of ways
affected interstate commerce and persons engaged in it has been
frequently sustained because the interference was not direct.
Contracts, combinations, or conspiracies to control domestic
enterprise in manufacture, agriculture, mining, production in all
its forms, or to raise or lower prices or wages might
unquestionably tend to restrain external as well as domestic trade,
but the restraint would be an indirect result, however inevitable,
and whatever its extent, and such result would not necessarily
determine the object of the contract, combination, or
conspiracy.
Again, all the authorities agree that, in order to vitiate a
contract or combination, it is not essential that its result should
be a complete monopoly; it is sufficient if it really tends to that
end, and to deprive the public of the advantages which flow from
free competition. Slight reflection will show that if the national
power extends to all contracts and combinations in manufacture,
agriculture, mining, and other productive industries whose ultimate
result may affect external commerce, comparatively little of
business operations and affairs would be left for state
control.
It was in the light of well settled principles that the Act of
July 2, 1890, was framed. Congress did not attempt thereby to
assert the power to deal with monopoly directly as such, or to
limit and restrict the rights of corporations created by the states
or the citizens of the states in the acquisition, control, or
disposition of property, or to regulate or prescribe the price or
prices at which such property or the products thereof should be
sold, or to make criminal the acts of persons in the acquisition
and control of property which the states of their residence or
creation sanctioned or permitted. Aside from the provisions
applicable where Congress might exercise municipal
Page 156 U. S. 17
power, what the law struck at was combinations, contracts, and
conspiracies to monopolize trade and commerce among the several
states or with foreign nations; but the contracts and acts of the
defendants related exclusively to the acquisition of the
Philadelphia refineries and the business of sugar refining in
Pennsylvania, and bore no direct relation to commerce between the
states or with foreign nations. The object was manifestly private
gain in the manufacture of the commodity, but not through the
control of interstate or foreign commerce. It is true that the bill
alleged that the products of these refineries were sold and
distributed among the several states, and that all the companies
were engaged in trade or commerce with the several states and with
foreign nations; but this was no more than to say that trade and
commerce served manufacture to fulfill its function. Sugar was
refined for sale, and sales were probably made at Philadelphia for
consumption, and undoubtedly for resale by the first purchasers
throughout Pennsylvania and other states, and refined sugar was
also for warded by the companies to other states for sale.
Nevertheless it does not follow that an attempt to monopolize, or
the actual monopoly of, the manufacture was an attempt, whether
executory or consummated, to monopolize commerce, even though, in
order to dispose of the product, the instrumentality of commerce
was necessarily invoked. There was nothing in the proofs to
indicate any intention to put a restraint upon trade or commerce,
and the fact, as we have seen, that trade or commerce might be
indirectly affected was not enough to entitle complainants to a
decree. The subject matter of the sale was shares of manufacturing
stock, and the relief sought was the surrender of property which
had already passed, and the suppression of the alleged monopoly in
manufacture by the restoration of the
status quo before
the transfers; yet the act of Congress only authorized the circuit
courts to proceed by way of preventing and restraining violations
of the act in respect of contracts, combinations, or conspiracies
in restraint of interstate or international trade or commerce.
The circuit court declined, upon the pleadings and proofs,
Page 156 U. S. 18
to grant the relief prayed, and dismissed the bill, and we are
of opinion that the circuit court of appears did not err in
affirming that decree.
Decree affirmed.
MR. JUSTICE HARLAN, dissenting.
Prior to the 4th day of March, 1892, the American Sugar Refining
Company, a corporation organized under a general statute of New
Jersey for the purpose of buying, manufacturing, refining, and
selling sugar in different parts of the country, had obtained the
control of all the sugar refineries in the United States except
five, of which four were owned and operated by Pennsylvania
corporations -- the E. C. Knight Company, the Franklin Sugar
Refining Company, Spreckels' Sugar Refining Company, and the
Delaware Sugar House, and the other by the Revere Sugar Refinery of
Boston. These five corporations were all in active competition with
the American Sugar Refining Company and with each other. The
product of the Pennsylvania companies was about thirty-three
percent, and that of the Boston company about two percent, of the
entire quantity of sugar refined in the United States.
In March, 1892, by means of contracts or arrangements with
stockholders of the four Pennsylvania companies, the New Jersey
corporation -- using for that purpose its own stock -- purchased
the stock of those companies, and thus obtained absolute control of
the entire business of sugar refining in the United States except
that done by the Boston company, which is too small in amount to be
regarded in this discussion.
"The object," the court below said,
"in purchasing the Philadelphia refineries was to obtain a
greater influence or more perfect control over the business of
refining and selling sugar in this country."
This characterization of the object for which this stupendous
combination was formed is properly accepted in the opinion of the
court as justified by the proof. I need not, therefore, analyze the
evidence upon this point. In its consideration of the important
constitutional question presented, this Court assumes on the record
before us
Page 156 U. S. 19
that the result of the transactions disclosed by the pleadings
and proof was the creation of a monopoly in the manufacture of a
necessary of life. If this combination, so far as its operations
necessarily or directly affect interstate commerce, cannot be
restrained or suppressed under some power granted to Congress, it
will be cause for regret that the patriotic statesmen who framed
the Constitution did not foresee the necessity of investing the
national government with power to deal with gigantic monopolies
holding in their grasp, and injuriously controlling in their own
interest, the entire trade among the states in food products that
are essential to the comfort of every household in the land.
The Court holds it to be vital in our system of government to
recognize and give effect to both the commercial power of the
nation and the police powers of the states, to the end that the
Union be strengthened, and the autonomy of the states preserved. In
this view I entirely concur. Undoubtedly the preservation of the
just authority of the states is an object of deep concern to every
lover of his country. No greater calamity could befall our free
institutions than the destruction of that authority, by whatever
means such a result might be accomplished. "Without the states in
union," this Court has said, "there could be no such political body
as the United States."
Lane County v.
Oregon, 7 Wall. 71,
74 U. S. 76. But
it is equally true that the preservation of the just authority of
the general government is essential as well to the safety of the
states as to the attainment of the important ends for which that
government was ordained by the people of the United States, and the
destruction of that authority would be fatal to the peace and
wellbeing of the American people. The Constitution, which
enumerates the powers committed to the nation for objects of
interest to the people of all the states, should not therefore be
subjected to an interpretation so rigid, technical, and narrow that
those objects cannot be accomplished. Learned counsel in
Gibbons v.
Ogden, 9 Wheat. 1,
22 U. S. 187,
having suggested that the Constitution should be strictly
construed, this Court, speaking by Chief Justice Marshall, said
that when the original states
"converted their league into a
Page 156 U. S. 20
government, when they converted their Congress of ambassadors,
deputed to deliberate on their common concerns, and to recommend
measures of general utility, into a legislature empowered to enact
laws on the most interesting subjects, the whole character in which
the states appear underwent a change, the extent of which must be
determined by a fair consideration of the instrument by which that
change was effected. . . . What do gentlemen mean,"
the Court inquired,
"by a strict construction? If they contend only against that
enlarged construction which would extend words beyond their natural
and obvious import, one might question the application of the term,
but should not controvert the principle. If they contend for that
narrow construction which, in support of some theory to be found in
the Constitution, would deny to the government those powers which
the words of the grant, as usually understood, import, and which
are consistent with the general views and objects of the
instrument; for that narrow construction, which would cripple the
government and render it unequal to the objects for which it is
declared to be instituted, and to which the powers given, as fairly
understood, render it competent -- then we cannot perceive the
propriety of this strict construction, nor adopt it as the rule by
which the Constitution is to be expounded."
Id., 22 U. S. 188. On
the same occasion, the principle was announced that the objects for
which a power was granted to Congress, especially when those
objects are expressed in the Constitution itself, should have great
influence in determining the extent of any given power.
Congress is invested with power to regulate commerce with
foreign nations and among the several states. The power to regulate
is the power to prescribe the rule by which the subject regulated
is to be governed. It is one that must be exercised whenever
necessary throughout the territorial limits of the several states.
Cohens v.
Virginia, 6 Wheat. 264,
19 U. S. 413.
The power to make these regulations "is complete in itself, may be
exercised to its utmost extent, and acknowledges no limitations
other than are prescribed in the Constitution." It is plenary
because vested in Congress
"as absolutely as it
Page 156 U. S. 21
would be in a single government having in its constitution the
same restrictions on the exercise of the power as are found in the
Constitution of the United States."
It may be exercised "whenever the subject exists."
Gibbons v.
Ogden, 9 Wheat. 1,
22 U. S. 195-196.
In his concurring opinion in that case, Mr. Justice Johnson
observed that the grant to Congress of the power to regulate
commerce carried with it the whole subject, leaving nothing for the
state to act upon, and that,
"if there was anyone object riding over every other in the
adoption of the Constitution, it was to keep commercial intercourse
among the states free from all invidious and partial
restraints."
Id., 22 U. S. 231. "In
all commercial regulations, we are one and the same people." Mr.
Justice Bradley, speaking for this Court, said that the United
States are but one country, and are and must be subject to one
system of regulations in respect to interstate commerce.
Robbins v. Shelby Taxing District, 120 U.
S. 489,
120 U. S.
494.
What is commerce among the states? The decisions of this Court
fully answer the question. "Commerce, undoubtedly, is traffic, but
it is something more; it is intercourse." It does not embrace the
completely interior traffic of the respective states -- that which
is "carried on between man and man in a state, or between different
parts of the same state, and which does not extend to or affect
other states" -- but it does embrace "every species of commercial
intercourse" between the United States and foreign nations and
among the states, and therefore it includes such traffic or trade,
buying, selling, and interchange of commodities as directly affects
or necessarily involves the interests of the people of the United
States. "Commerce, as the word is used in the Constitution, is a
unit," and
"cannot stop at the external boundary line of each state, but
may be introduced into the interior. . . . The genius and character
of the whole government seem to be that its action is to be applied
to all the external concerns of the nation,
and to those
internal concerns which affect the states generally."
These principles were announced in
Gibbons v. Ogden and
have often been approved. It is the settled doctrine of this
Page 156 U. S. 22
Court that interstate commerce embraces something more than the
mere physical transportation of articles of property and the
vehicles or vessels by which such transportation is effected. In
County of Mobile v. Kimball, 102 U.
S. 691,
102 U. S. 702,
it was said that commerce with foreign countries and among the
states, strictly considered, consists
"in intercourse and traffic, including in these terms navigation
and the transportation and transit of persons and property
as
well as the purchase, sale, and exchange of commodities."
In
Gloucester Ferry Co. v. Pennsylvania, 114 U.
S. 196,
114 U. S. 203,
the language of the Court was:
"Commerce among the states consists of intercourse and traffic
between their citizens, and includes the transportation of persons
and property, and the navigation of public waters for that purpose,
as well as the purchase, sale, and exchange of commodities. The
power to regulate that commerce, as well as commerce with foreign
nations, vested in Congress, is the power to prescribe the rules by
which it shall be governed -- that is, the conditions upon which it
shall be conducted; to determine when it shall be free, and when
subject to duties or other exactions."
In
Kidd v. Pearson, 128 U. S. 1,
128 U. S. 20, it
was said that "the buying and selling and the transportation
incidental thereto constitute commerce." Interstate
commerce does not, therefore, consist in transportation simply. It
includes the purchase and sale of articles that are intended to be
transported from one state to another -- every species of
commercial intercourse among the states and with foreign
nations.
In the light of these principles, determining as well the scope
of the power to regulate commerce among the states as the nature of
such commerce, we are to inquire whether the Act of Congress of
July 2, 1890, c. 647, entitled "An act to protect trade and
commerce against unlawful restraints and monopolies," 26 Stat. 209,
is repugnant to the Constitution.
By that act "every contract, combination in the form of trust
or otherwise, or conspiracy in restraint of trade or
commerce
among the several states or with foreign nations"
is declared to be illegal, and every person making any such
contract, or engaging in any such combination or conspiracy,
Page 156 U. S. 23
is to be deemed guilty of a misdemeanor, and punishable, on
conviction, by a fine not exceeding $5,000, or by imprisonment not
exceeding one year, or by both said punishments, in the discretion
of the court. § 1. It is also made a misdemeanor, punishable in
like manner, for any person to
"monopolize, or attempt to monopolize, or combine or conspire
with any other person or persons to monopolize, any part of the
trade or commerce
among the several states or with foreign
nations."
§ 2. The act also declares illegal
"every contract, combination in form of trust or otherwise, or
conspiracy in restraint of trade or commerce in any Territory of
the United States or of the District of Columbia, or in restraint
of trade or commerce between any such territory and another, or
between any such territory or territories or any state or states or
the District of Columbia, or with foreign nations, or between the
District of Columbia and any state or states or foreign
nations,"
and prescribes the same punishments for every person making any
such contract, or engaging in any such combination or conspiracy. §
3.
The fourth section of the act is in these words:
"SEC. 4. The several circuit courts of the United States are
hereby invested with jurisdiction to prevent and restrain
violations of this act, and it shall be the duty of the several
district attorneys of the United States, in their respective
districts, under the direction of the Attorney General, to
institute proceedings in equity to prevent and restrain such
violations. Such proceedings may be by way of petition setting
forth the case and praying that such violation shall be enjoined or
otherwise prohibited. When the parties complained of shall have
been duly notified of such petition, the court shall proceed, as
soon as may be, to the hearing and determination of the case, and
pending such petition and before final decree, the court may at any
time make such temporary restraining order or prohibition as shall
be deemed just in the premises."
It would seem to be indisputable that no
combination of
corporations or individuals can,
of right, impose unlawful
restraints upon interstate trade, whether upon transportation or
upon such
interstate intercourse and traffic as precede
transportation,
Page 156 U. S. 24
any more than it can,
of right, impose unreasonable
restraints upon the completely internal traffic of a state. The
supposition cannot be indulged that this general proposition will
be disputed. If it be true that a
combination of
corporations or individuals may, so far as the power of Congress is
concerned, subject interstate trade, in any of its stages, to
unlawful restraints, the conclusion is inevitable that the
Constitution has failed to accomplish one primary object of the
Union, which was to place commerce
among the states under
the control of the common government of all the people, and thereby
relieve or protect it against burdens or restrictions imposed, by
whatever authority, for the benefit of particular localities or
special interests.
The fundamental inquiry in this case is what, in a legal sense,
is an unlawful restraint of trade?
Sir William Erle, formerly Chief Justice of the Common Pleas, in
his essay on the Law Relating to Trade Unions, well said that
"restraint of trade, according to a general principle of the common
law, is unlawful," that
"at common law, every person has individually,
and the
public also have collectively, a right to require that the
course of trade should be kept free
from unreasonable
obstruction,"
and that
"the right to a free course for trade is of great importance to
commerce and productive industry, and has been carefully maintained
by those who have administered the common law."
Pp. 6-8.
There is a partial restraint of trade which in certain
circumstances is tolerated by the law. The rule upon that subject
is stated in
Oregon Steam Nav. Co. v.
Winsor, 20 Wall. 64,
87 U. S. 66,
where it was said that:
"An agreement in general restraint of trade is illegal and void,
but an agreement which operates merely in partial restraint of
trade is good, provided it be not unreasonable and there be a
consideration to support it. In order that it may not be
unreasonable, the restraint imposed must not be larger than is
required for the necessary protection of the party with whom the
contract is made. A contract, even on good consideration, not to
use a trade anywhere in England is held void in that country as
being too general a restraint of trade.
Horner v. Graves,
7 Bing. 743. A contract, even on good consideration, not to use a
trade anywhere in England is held void in that country as being to
general a restraint of trade. "
Page 156 U. S. 25
But a general restraint of trade has often resulted from
combinations formed for the purpose of controlling prices by
destroying the opportunity of buyers and sellers to deal with each
other upon the basis of fair, open, free competition. Combinations
of this character have frequently been the subject of judicial
scrutiny, and have always been condemned as illegal because of
their necessary tendency to restrain trade. Such combinations are
against common right, and are crimes against the public. To some of
the cases of that character it will be well to refer.
In
Morris Run Coal Co. v. Barclay Coal Co., 68 Penn.St.
173, 183-187, the principal question was as to the validity of a
contract made between five coal corporations of Pennsylvania by
which they divided between themselves two coal regions of which
they had the control. The referee in the case found that those
companies acquired under their arrangement the power to control the
entire market for bituminous coal in the northern part of the
state, and their combination was therefore a restraint upon trade,
and against public policy. In response to the suggestion that the
real purpose of the combination was to lessen expenses, to advance
the quality of coal, and to deliver it in the markets intended to
be supplied in the best order to the consumer, the Supreme Court of
Pennsylvania said:
"This is denied by the defendants, but it seems to us it is
immaterial whether these positions are sustained or not. Admitting
their correctness, it does not follow that these advantages redeem
the contract from the obnoxious effects so strikingly presented by
the referee. The important fact is that these companies control
this immense coal field; that it is the great source of supply of
bituminous coal to the State of New York and large territories
westward; that by this contract they control the price of coal in
this extensive market, and make it bring sums it would not command
if left to the natural laws of trade; that it concerns an article
of prime necessity for many uses; that its operation is general in
this large region, and affects all who use coal as a fuel, and this
is accomplished by a combination of all the companies engaged in
this branch of business
Page 156 U. S. 26
in the large region where they operate. The combination is wide
in scope, general in its influence, and injurious in effects. These
being its features, the contract is against public policy, illegal,
and therefore void."
Again, in the same case:
"The effects produced on the public interests lead to the
consideration of another feature of great weight in determining the
illegality of the contract, to-wit, the combination resorted to by
these five companies. Singly, each might have suspended deliveries
and sales of coal to suit its own interests, and might have raised
the price even though this might have been detrimental to the
public interest. There is a certain freedom which must be allowed
to everyone in the management of his own affairs. When competition
is left free, individual error or folly will generally find a
corrective in the conduct of others. But here is a combination of
all the companies operating in the Blossburg and Barclay regions,
and controlling their entire productions. They have combined
together to govern the supply and the price of coal in all the
markets from the Hudson to the Mississippi Rivers and from
Pennsylvania to the Lakes. This combination has a power in its
confederated form which no individual action can confer. The public
interest must succumb to it, for it has left no competition free to
correct its baleful influence. When the supply of coal is
suspended, the demand for it becomes importunate, and prices must
rise, or, if the supply goes forward, the price fixed by the
confederates must accompany it. The domestic hearth, the furnaces
of the iron master, and the fires of the manufacturer all feel the
restraint, while many dependent hands are paralyzed, and hungry
mouths are stinted. The influence of a lack of supply or a rise in
the price of an article of such prime necessity cannot be measured.
It permeates the entire mass of the community, and leaves few of
its members untouched by its withering blight. Such a combination
is more than a contract; it is an offense. 'I take it,' said
Gibson, J.,"
"a combination is criminal whenever the act to be done has a
necessary tendency to prejudice the public or to oppress
individuals by unjustly subjecting them to the power of the
confederates and giving effect to the purpose of the
Page 156 U. S. 27
latter, whether of extortion or of mischief."
"
Commonwealth v. Carlisle, Brightly (Penn.) 40. In all
such combinations where the purpose is injurious or unlawful, the
gist of the offense is the conspiracy. Men can often do by the
combination of many what severally no one could accomplish, and
even what, when done by one, would be innocent. . . . There is a
potency in numbers when combined which the law cannot overlook
where injury is the consequence."
This case in the Supreme Court of Pennsylvania was cited with
approval in
Arnot v. Pittston & Elmira Coal Co., 68
N.Y. 558, 565, which involved the validity of a contract between
two coal companies the object and effect of which were to give one
of them the monopoly of the trade in coal in a particular region by
which the price of that commodity could be artificially enhanced.
The Court of Appeals of New York held that:
"A combination to effect such a purpose is inimical to the
interests of the public, and that all contracts designed to effect
such an end are contrary to public policy, and therefore illegal. .
. . If they should be sustained, the prices of articles of pure
necessity, such as coal, flour, and other indispensable commodities
might be artificially raised to a ruinous extent far exceeding any
naturally resulting from the proportion between supply and demand.
No illustration of the mischief of such contracts is perhaps more
apt than a monopoly of anthracite coal, the region of the
production of which is known to be limited."
See also Hooker v. Vandewater, 4 Denio 352;
Stanton
v. Allen, 5 Denio 434;
Saratoga Bank v. King, 44 N.Y.
87.
In
Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666,
672, the principal question was as to the legality of an
association of substantially all the manufacturers of salt in a
large salt-producing territory. After adverting to the rule that
contracts in general restraint of trade are against public policy
and to the agreement there in question, the court said:
"Public policy unquestionably favors competition in trade to the
end that its commodities may be afforded to the consumer as cheaply
as possible, and is opposed to monopolies which tend to advance
market prices, to the injury of the general public. . . .
Page 156 U. S. 28
The clear tendency of such an agreement is to establish a
monopoly and to destroy competition in trade, and for that reason,
on grounds of public policy, the courts will not aid in its
enforcement. It is no answer to say that competition in the salt
trade was not in fact destroyed, or that the price of the commodity
was not unreasonably advanced. Courts will not stop to inquire as
to the degree of injury inflicted upon the public; it is enough to
know that the inevitable tendency of such contracts is injurious to
the public."
In
Craft v. McConoughy, 79 Ill. 346, 349-350, which
related to a combination between all the grain dealers of a
particular town to stifle competition and to obtain control of the
price of grain, the Supreme Court of Illinois said:
"While the agreement, upon its face, would seem to indicate that
the parties had formed a copartnership for the purpose of trading
in grain, yet, from the terms of the contract and the other proof
in the record, it is apparent that the true object was to form a
secret combination which would stifle all competition and enable
the parties, by secret and fraudulent means, to control the price
of grain, cost of storage, and expense of shipment. In other words,
the four firms, by a shrewd, deep-laid, secret combination,
attempted to control and monopolize the entire grain trade of the
town and surrounding country. That the effect of this contract was
to restrain the trade and commerce of the country is a proposition
that cannot be successfully denied. We understand it to be a well
settled rule of law that an agreement in general restraint of trade
is contrary to public policy, illegal and void, but an agreement in
partial or particular restraint upon trade has been held good where
the restraint was only partial, consideration adequate, and the
restriction reasonable. . . . While these parties were in business,
in competition with each other, they had the undoubted right to
establish their own rates for grain stored and commissions for
shipment and sale. They could pay as high or low a price for grain
as they saw proper, and as they could make contracts with the
producer. So long as competition was free, the interest of the
public was safe. The laws of trade, in connection with the right of
competition, was all the
Page 156 U. S. 29
guaranty the public required, but the secret combination created
by the contract destroyed all competition and created a monopoly
against which the public interest had no protection."
These principles were applied in
People v. Chicago Gas Trust
Co., 130 Ill. 269, 292, 297, which involved the validity of a
corporation formed for the purpose of operating gas works and of
manufacturing and selling gas, and which, for the purpose of
destroying competition, acquired the stock of four other gas
companies, and thereby obtained a monopoly in the business of
furnishing illuminating gas to the City of Chicago and its
inhabitants. The court, in declaring the organization of the
company to be illegal, said:
"The fact that the appellee, almost immediately after its
organization, bought up a majority of the shares of stock of each
of these companies, shows that it was not making a mere investment
of surplus funds, but that it designed and intended to bring the
four companies under its control, and, by crushing out competition,
to monopolize the gas business in Chicago. . . . Of what
avail,"
said the court,
"is it that any number of gas companies may be formed under the
general incorporation law if a giant trust company can be clothed
with the power of buying up and holding the stock and property of
such companies, and, through the control thereby attained, can
direct all their operations, and weld them into one huge
combination?"
So, in
India Bagging Association v. Kock, 14 La.Ann.
168, where the court passed upon the legality of an association of
various commercial firms in New Orleans that were engaged in the
sale of India bagging, it was said:
"The agreement between the parties was palpably and
unequivocally a combination in restraint of trade, and to enhance
the price in the market of an article of primary necessity to
cotton planters. Such combinations are contrary to public order,
and cannot be enforced in a court of justice."
In
Clara Mill & Lumber Co. v. Hayes, 76 Cal. 387,
390, which related to a combination, the result of certain
contracts among certain manufacturers, the court found that the
object, purpose, and consideration of those contracts were to form
a combination among all the manufacturers of lumber
Page 156 U. S. 30
at or near a particular place, for the sole purpose of
increasing the price of that article, limiting the amount to be
manufactured, and giving certain parties the control of all lumber
manufactured near that place for the year 1881, and of the supply
for that year in specified counties. It held the combination to be
illegal, observing that
"among the contracts illegal at common law, because opposed to
public policy, were contracts in general restraint of trade;
contracts between individuals to prevent competition and keep up
the prices of articles of utility."
It further said that while the courts had nothing to do with the
results naturally flowing from the laws of demand and supply, they
would not respect agreements made for the purpose of "taking trade
out of the realm of competition, and thereby enhancing or
depressing prices of commodities."
A leading case on the question as to what combinations are
illegal as being in general restraint of trade is
Richardson v.
Buhl, 77 Mich. 632, 635, 657, 660, which related to certain
agreements connected with the business and operations of the
Diamond Match Company. From the report of the case, it appears that
that company was organized under the laws of Connecticut for the
purpose of uniting in one corporation all the match manufactories
in the United States, and to monopolize and control the business of
making all the friction matches in the country, and establish the
price thereof. To that end it became necessary, among other things,
to buy many plants that had become established or were about to be
established, as well as the property used in connection therewith.
Chief Justice Sherwood of the Supreme Court of Michigan said:
"The sole object of the corporation is to make money by having
it in its power to raise the price of the article, or diminish the
quantity to be made and used at its pleasure. Thus, both the supply
of the article and the price thereof are made to depend upon the
action of a half dozen individuals, more or less, to satisfy their
cupidity and avarice, who may happen to have the controlling
interest in this corporation -- an artificial person, governed by a
single motive or purpose, which is to accumulate money regardless
of the wants or necessities
Page 156 U. S. 31
of over 60,000,000 people. The article thus completely under
their control for the last fifty years has come to be regarded as
one of necessity not only in every household in the land, but one
of daily use by almost every individual in the country. It is
difficult to conceive of a monopoly which can affect a greater
number of people, or one more extensive in its effect on the
country, than that of the Diamond Match Company. It was to aid that
company in its purposes and in carrying out its object that the
contract in this case was made between those parties, and which we
are now asked to and in enforcing. Monopoly in trade, or in any
kind of business in this country, is odious to our form of
government. It is sometimes permitted to aid the government in
carrying on a great public enterprise or public work under
governmental control in the interest of the public. Its tendency
is, however, destructive of free institutions, and repugnant to the
instincts of a free people, and contrary to the whole scope and
spirit of the federal Constitution, and is not allowed to exist
under express provisions in several of our state constitutions. . .
. All combinations among persons or corporations for the purpose of
raising or controlling the prices of merchandise, or any of the
necessaries of life, are monopolies, and intolerable, and ought to
receive the condemnation of all courts."
In the same case, Mr. Justice Champlin, with whom Mr. Justice
Campbell concurred, said:
"There is no doubt that all the parties to this suit were active
participants in perfecting the combination called the Diamond Match
Company, and that the present dispute grows out of that
transaction, and is the fruit of the scheme by which all
competition in the manufacture of matches was stifled, opposition
in the business crushed, and the whole business of the country in
that line engrossed by the Diamond Match Company. Such a vast
combination as has been entered into under the above name is a
menace to the public. Its object and direct tendency is to prevent
free and fair competition and control prices throughout the
national domain. It is no answer to say that this monopoly has in
fact reduced the price of friction matches. That policy may have
been necessary to crush competition.
Page 156 U. S. 32
The fact exists that it rests in the discretion of this company
at any time to raise the price to an exorbitant degree. Such
combinations have frequently been condemned by courts as unlawful
and against public policy."
See also Raymond v. Leavitt, 46 Mich. 447, and
Texas Standard Oil Co. v. Adoue, 83 Tex. 650.
This extended reference to adjudged cases relating to unlawful
restraints upon the interior traffic of a state has been made for
the purpose of showing that a combination such as that organized
under the name of the American Sugar Refining Company has been
uniformly held by the courts of the states to be against public
policy and illegal because of its necessary tendency to impose
improper restraints upon trade. And such, I take it, would be the
judgment of any circuit court of the United States in a case
between parties in which it became necessary to determine the
question. The judgments of the state courts rest upon general
principles of law, and not necessarily upon statutory provisions
expressly condemning restraints of trade imposed by or resulting
from combinations. Of course, in view of the authorities, it will
not be doubted that it would be competent for a state, under the
power to regulate its domestic commerce, and for the purpose of
protecting its people against fraud and injustice, to make it a
public offense, punishable by fine and imprisonment, for
individuals or corporations to make contracts, form combinations or
engage in conspiracies which unduly restrain trade or commerce
carried on within its limits, and also to authorize the institution
of proceedings for the purpose of annulling contracts of that
character, as well as of preventing or restraining such
combinations and conspiracies.
But there is a trade among the several states which is distinct
from that carried on within the territorial limits of a state. The
regulation and control of the former are committed by the national
Constitution to Congress. Commerce among the states, as this Court
has declared, is a unit, and in respect of that commerce, this is
one country, and we are one people. It may be regulated by rules
applicable to every part of the United States, and state lines and
state jurisdiction cannot
Page 156 U. S. 33
interfere with the enforcement of such rules. The jurisdiction
of the general government extends over every foot of territory
within the United States. Under the power with which it is
invested, Congress may remove unlawful obstructions of whatever
kind to the free course of trade among the states. In so doing, it
would not interfere with the "autonomy of the states," because the
power thus to protect interstate commerce is expressly given by the
people of all the states. Interstate intercourse, trade, and
traffic are absolutely free except as such intercourse, trade, or
traffic may be incidentally or indirectly affected by the exercise
by the states of their reserved police powers.
Sherlock v.
Alling, 99 U. S. 99,
99 U. S. 103.
It is the Constitution, the supreme law of the land, which invests
Congress with power to protect commerce among the states against
burdens and exactions arising from unlawful restraints by whatever
authority imposed. Surely a right secured or granted by that
instrument is under the protection of the government which that
instrument creates. Any combination, therefore, that disturbs or
unreasonably obstructs freedom in buying and selling articles
manufactured to be sold to persons in other states, or to be
carried to other states -- a freedom that cannot exist if the right
to buy and sell is fettered by unlawful restraints that crush out
competition -- affects not incidentally but directly, the people of
all the states, and the remedy for such an evil is found only in
the exercise of powers confided to a government which, this Court
has said, was the government of all, exercising powers delegated by
all, representing all, acting for all.
M'Culloch v.
Maryland, 4 Wheat. 405.
It has been argued that a combination between corporations of
different states, or between the stockholders of such corporations,
with the object and effect of controlling not simply the
manufacture, but the price, of refined sugar throughout the whole
of the United States -- which is the case now before us -- cannot
be held to be in restraint of "commerce among the states," and
amenable to national authority, without conceding that the general
government has authority to say what shall and what shall not be
manufactured in the several states.
Page 156 U. S. 34
Kidd v. Pearson, 128 U. S. 1,
128 U. S. 20, was
cited in argument as supporting that view. In that case, the sole
question was whether the State of Iowa could forbid the manufacture
within its limits of ardent spirits intended for sale ultimately in
other states. This Court held that the manufacture of intoxicating
liquors in a state is nonetheless a business within the state,
subject to state control, because the manufacturer may intend at
his convenience, to export such liquors to foreign countries or to
other states. The authority of the states over the manufacture of
strong drinks within their respective jurisdictions was referred to
their plenary power, never surrendered to the national government,
of providing for the health, morals, and safety of their
people.
That case presented no question as to a
combination to
monopolize the sale of ardent spirits manufactured in Iowa to be
sold in other states -- no question as to combinations in restraint
of trade as involved in the buying and selling of articles that are
intended to go and do go, and will always go, into commerce
throughout the entire country, and are used by the people of all
the states, and the making or manufacturing of which no state could
forbid consistently with the liberty that everyone has of pursuing,
without undue restrictions, the ordinary callings of life. There is
no dispute here as to the lawfulness of the business of refining
sugar,
apart from the undue restraint which the promoters of
such business, who have combined to control prices, seek to put
upon the freedom of interstate traffic in that article.
It may be admitted that an act which did nothing more than
forbid, and which had no other object than to forbid, the mere
refining of sugar in any state would be in excess of any power
granted to Congress. But the act of 1890 is not of that character.
It does not strike at the manufacture simply of articles that are
legitimate or recognized subjects of commerce, but at
combinations that unduly restrain, because they
monopolize,
the buying and selling of articles which are
to go into interstate commerce. In
State v. Stewart, 59
Vt. 273, 286, it was said that if a
combination of persons
"seek to restrain trade, or tend to the destruction of the material
property
Page 156 U. S. 35
of the country, they work injury to the whole people." And in
State v. Glidden, 55 Conn. 46, 75, the court said:
"Any one man, or anyone of several men acting independently, is
powerless; but when several combine, and direct their united
energies to the accomplishment of a bad purpose, the combination is
formidable. Its power for evil increases as its number increases. .
. . The combination becomes dangerous and subversive of the rights
of others, and the law wisely says it is a crime."
Chief Justice Gibson well said in
Commonwealth v.
Carlisle, Brightly (Penn.) 36, 39-40:
"There is between the different parts of the body politic a
reciprocity of action on each other, which, like the action of
antagonizing muscles in the natural body, not only prescribes to
each its appropriate state and action, but regulates the motion of
the whole. The effort of an individual to disturb this equilibrium
can never be perceptible, nor carry the operation of his interest,
or that of any other individual, beyond the limits of fair
competition; but the increase of power by combination of means
being in geometrical proportion to the number concerned, an
association may be able to give an impulse not only oppressive to
individuals, but mischievous to the public at large, and it is the
employment of an engine so powerful and dangerous that gives
criminality to an act that would be perfectly innocent at least in
a legal view, when done by an individual."
These principles underlie the act of Congress, which has for its
sole object the protection of such trade and commerce
as the
Constitution confides to national control, and the question is
presented whether the
combination assailed by this suit is
an unlawful restraint upon interstate trade in a necessary article
of food which, as everyone knows, has always entered, now enters,
and must continue to enter in vast quantities into commerce among
the states.
In
Kidd v. Pearson, we recognized, as had been done in
previous cases, the distinction between the mere transportation of
articles of interstate commerce and the
purchasing and
selling that
precede transportation. It is said
that manufacture precedes commerce, and is not a part of it. But it
is equally true that when manufacture ends, that which has been
manufactured
Page 156 U. S. 36
becomes a subject of commerce; that buying and selling succeed
manufacture, come into existence after the process of manufacture
is completed, precede transportation, and are as much commercial
intercourse, where articles are bought
to be carried from
one state to another, as is the manual transportation of such
articles after they have been so purchased. The distinction was
recognized by this Court in
Gibbons v. Ogden, where the
principal question was whether commerce included navigation. Both
the court and counsel recognized buying and selling or barter
as included in commerce. Chief Justice Marshall said that
the mind can scarcely conceive a system for regulating commerce,
which was "
confined to prescribing rules for the conduct
of individuals in the actual employment of buying and selling, or
of barter." Pp.
22 U. S.
189-190.
The power of Congress covers and protects the absolute freedom
of such intercourse and trade among the states as may or must
succeed manufacture and precede transportation from the place of
purchase. This would seem to be conceded, for the court in the
present case expressly declare that
"
contracts to buy, sell, or exchange goods
to be
transported among the several states, the transportation and
its instrumentalities, and articles bought, sold, or exchanged for
the purpose of such transit among the states, or put in the way of
transit,
may be regulated, but this is
because they
form part of interstate trade or commerce."
Here is a direct admission -- one which the settled doctrines of
this Court justify -- that contracts to buy, and the purchasing of
goods
to be transported from one state to another, and
transportation, with its instrumentalities, are all
parts
of interstate trade or commerce. Each part of such trade is then
under the protection of Congress. And yet, by the opinion and
judgment in this case, if I do not misapprehend them, Congress is
without power to protect the commercial intercourse that such
purchasing necessarily involves against the restraints and burdens
arising from the existence of
combinations that meet
purchasers, from whatever state they come, with the threat -- for
it is nothing more nor less than a threat -- that they
shall
not purchase what
Page 156 U. S. 37
they desire to purchase,
except at the prices fixed by such
combinations. A citizen of Missouri has the right to go in
person, or send orders, to Pennsylvania and New Jersey for the
purpose of purchasing refined sugar. But of what value is that
right if he is confronted in those states by a vast
combination which absolutely controls the price of that
article by reason of its having acquired all the sugar refineries
in the United States in order that they may fix prices in their own
interest exclusively?
In my judgment, the citizens of the several states composing the
Union are entitled of right to buy goods in the state where they
are manufactured, or in any other state, without being confronted
by an illegal combination whose business extends throughout the
whole country, which, by the law everywhere, is an enemy to the
public interests, and which prevents such buying except at prices
arbitrarily fixed by it. I insist that the free course of trade
among the states cannot coexist with such combinations. When I
speak of trade, I mean the buying and selling of articles of every
kind that are recognized articles of interstate commerce. Whatever
improperly obstructs the free course of interstate intercourse and
trade, as involved in the buying and selling of articles to be
carried from one state to another, may be reached by Congress under
its authority to regulate commerce among the states. The exercise
of that authority so as to make trade among the states in all
recognized articles of commerce absolutely free from unreasonable
or illegal restrictions imposed by combinations is justified by an
express grant of power to Congress, and would redound to the
welfare of the whole country. I am unable to perceive that any such
result would imperil the autonomy of the states, especially as that
result cannot be attained through the action of anyone state.
Undue restrictions or burdens upon the purchasing of goods in
the market for sale, to be transported to other states, cannot be
imposed, even by a state, without violating the freedom of
commercial intercourse guarantied by the Constitution. But if a
state within whose limits the business of refining sugar is
exclusively carried on may not constitutionally impose
Page 156 U. S. 38
burdens upon purchases of sugar
to be transported to other
states, how comes it that combinations of corporations or
individuals within the same state may not be prevented by the
national government from putting unlawful restraints upon the
purchasing of that article
to be carried from the state in
which such purchases are made? If the national power is
competent to repress
state action in restraint of
interstate trade as it may be involved in purchases of refined
sugar to be transported from one state to another state, surely it
ought to be deemed sufficient to prevent unlawful restraints
attempted to be imposed by combinations of corporations or
individuals upon those identical purchases; otherwise illegal
combinations of corporations or individuals may -- so far as
national power and interstate commerce are concerned -- do with
impunity what no state can do.
Suppose that a suit were brought in one of the courts of the
United States, jurisdiction being based, it may be, alone upon the
diverse citizenship of the parties, to enforce the stipulations of
a written agreement which had for its object to acquire the
possession of all the sugar refineries in the United States in
order that those engaged in the combination might obtain the entire
control of the business of refining and selling sugar throughout
the country, and thereby to increase or diminish prices as the
particular interests of the combination might require. I take it
that the Court, upon recognized principles of law common to the
jurisprudence of this country and of Great Britain, would deny the
relief asked and dismiss the suit upon the ground that the
necessary tendency of such an agreement and combination was to
restrain not simply trade that was completely internal to the state
in which the parties resided, but trade and commerce among all the
states, and was therefore against public policy and illegal. If I
am right in this view, it would seem to follow necessarily that
Congress could enact a statute forbidding such combinations so far
as they affected interstate commerce, and provide for their
suppression as well through civil proceedings instituted for that
purpose as by penalties against those engaged in them.
Page 156 U. S. 39
In committing to Congress the control of commerce with foreign
nations and among the several states, the Constitution did not
define the means that may be employed to protect the freedom of
commercial intercourse and traffic established for the benefit of
all the people of the Union. It wisely forbore to impose any
limitations upon the exercise of that power except those arising
from the general nature of the government or such as are embodied
in the fundamental guarantees of liberty and property. It gives to
Congress, in express words, authority to enact all laws necessary
and proper for carrying into execution the power to regulate
commerce, and whether an act of Congress, passed to accomplish an
object to which the general government is competent, is within the
power granted must be determined by the rule announced through
Chief Justice Marshall three-quarters of a century ago, and which
has been repeatedly affirmed by this Court. That rule is:
"The sound construction of the Constitution must allow to the
national legislature the discretion with respect to the means by
which the powers it confers are to be carried into execution, which
will enable that body to perform the high duties assigned to it in
the manner most beneficial to the people. Let the end be
legitimate, let it be within the scope of the Constitution, and all
means which are appropriate, which are plainly adapted to that end,
which are not prohibited, but consistent with the letter and spirit
of the Constitution, are constitutional."
M'Culloch v.
Maryland, 4 Wheat. 316,
17 U. S. 421.
The end proposed to be accomplished by the act of 1890 is the
protection of trade and commerce among the states against unlawful
restraints. Who can say that that end is not legitimate, or is not
within the scope of the Constitution? The means employed are the
suppression, by legal proceedings, of combinations, conspiracies,
and monopolies which, by their inevitable and admitted tendency,
improperly restrain trade and commerce among the states. Who can
say that such means are not appropriate to attain the end of
freeing commercial intercourse among the states from burdens and
exactions imposed upon it by combinations which, under principles
long recognized in this country, as well as at the
Page 156 U. S. 40
common law, are illegal and dangerous to the public welfare?
What clause of the Constitution can be referred to which prohibits
the means thus prescribed in the act of Congress?
It may be that the means employed by Congress to suppress
combinations that restrain interstate trade and commerce are not
all or the best that could have been devised. But Congress, under
the delegation of authority to enact laws necessary and proper to
carry into effect a power granted, is not restricted to the
employment of those means "without which the end would be entirely
unattainable. . . . To have prescribed the means," this Court has
said,
"by which government should in all future time execute its
powers would have been to change entirely the character of that
instrument, and give it the properties of a legal code. It would
have been an unwise attempt to provide by immutable rules for
exigencies which, if foreseen at all, must have been seen dimly,
and which can be best provided for as they occur. To have declared
that the best means shall not be used, but those alone without
which the power given would be nugatory, would have been to deprive
the legislature of the capacity to avail itself of experience, to
exercise its reason, and to accommodate its legislation to
circumstances."
Again:
"Where the law is not prohibited, and is really calculated to
effect any of the objects entrusted to the government, to undertake
here to inquire into the degree of its necessity would be to pass
the line which circumscribes the judicial department, and to tread
on legislative ground."
M'Culloch v.
Maryland, 4 Wheat. 316,
17 U. S. 415,
17 U. S.
423.
By the act of 1890, Congress subjected to forfeiture
"any property owned under any contract or by any combination, or
pursuant to any conspiracy (and being the subject thereof)
mentioned in section one of this act, and being in the course of
transportation from one state to another, or to a foreign
country."
It was not deemed wise to subject such property to forfeiture
before transportation began or after it ended. If it be suggested
that Congress might have prohibited the
transportation
from the state in which they are manufactured any articles, by
whomsoever at the time owned, that had been
Page 156 U. S. 41
manufactured by combinations formed to monopolize some
designated part of trade or commerce among the states, my answer is
that it is not within the functions of the judiciary to adjudge
that Congress shall employ particular means in execution of a given
power simply because such means are, in the judgment of the courts,
best conducive to the end sought to be accomplished. Congress, in
the exercise of its discretion as to choice of means conducive to
an end to which it was competent, determined to reach that end
through civil proceedings, instituted to prevent or restrain these
obnoxious combinations in their attempts to burden interstate
commerce by obstructions that interfere
in advance of
transportation with the free course of trade between the
people of the states. In other words, Congress sought to prevent
the coming into existence of combinations, the purpose or tendency
of which was to impose unlawful restraints upon interstate
commerce.
There is nothing in conflict with these views in
Coe v.
Errol, 116 U. S. 517.
There, the question was whether certain logs cut in New Hampshire,
and hauled to a river that they might be transported to another
state, were liable to be taxed in the former state before actual
transportation to the latter state began. The court held that the
logs might be taxed while they remained in the State of their
origin as part of the general mass of property there; that "for
this purpose" -- taxation -- the property did not pass
from the jurisdiction of the state in which it was until
transportation began. The scope of the decision is clearly
indicated by the following clause in the opinion of Mr. Justice
Bradley:
"How can property thus situated, to-wit, deposited or stored at
the place of entrepot for future exportation, be taxed in the
regular way as part of the property of the state? The answer is
plain. It can be taxed as all other property is taxed, in the place
where it is found, if taxed or assessed for taxation in the usual
manner in which such property is taxed, and not singled out to be
assessed by itself in an unusual and exceptional manner because of
its situation."
As we have now no question as to the
taxation of
articles manufactured by one of the combinations condemned by the
act of Congress, and
Page 156 U. S. 42
as no one has suggested that the state in which they may be
manufactured could not
tax them as
property so
long as they remained within its limits, and before transportation
of them to other states began, I am at a loss to understand how the
case before us can be affected by a decision that personal
property, while it remains in the state of its origin, although it
is to be sent at a future time to another state, is within the
jurisdiction of the former state for purposes of taxation.
The question here relates to restraints upon the freedom of
interstate trade and commerce imposed by illegal combinations After
the fullest consideration I have been able to bestow upon this
important question, I find it impossible to refuse my assent to
this proposition: whatever a state may do to protect its completely
interior traffic or trade against unlawful restraints, the general
government is empowered to do for the protection of the people of
all the states -- for this purpose, one people -- against unlawful
restraints imposed upon interstate traffic or trade in articles
that are to enter into commerce among the several states. If, as
already shown, a state may prevent or suppress a
combination the effect of which is to subject its domestic
trade to the restraints necessarily arising from their obtaining
the absolute control of the sale of a particular article in general
use by the community, there ought to be no hesitation in allowing
to Congress the right to suppress a similar
combination
that imposes a like unlawful restraint upon interstate trade and
traffic in that article. While the states retain, because they have
never surrendered, full control of their completely internal
traffic, it was not intended by the framers of the Constitution
that any part of interstate commerce should be excluded from the
control of Congress. Each state can reach and suppress combinations
so far as they unlawfully restrain its interior trade, while the
national government may reach and suppress them so far as they
unlawfully restrain trade among the states.
While the opinion of the court in this case does not declare the
act of 1890 to be unconstitutional, it defeats the main object for
which it was passed, for it is, in effect, held that the statute
would be unconstitutional if interpreted as embracing
Page 156 U. S. 43
such unlawful restraints upon the purchasing of goods in one
state to be carried to another state as necessarily arise from the
existence of combinations formed for the purpose and with
the effect not only of monopolizing the ownership of all such goods
in every part of the country, but of controlling the prices for
them in all the states. This view of the scope of the act leaves
the public, so far as national power is concerned, entirely at the
mercy of combinations which arbitrarily control the prices of
articles purchased to be transported from one state to another
state. I cannot assent to that view. In my judgment, the general
government is not placed by the Constitution in such a condition of
helplessness that it must fold its arms and remain inactive while
capital combines, under the name of a corporation, to destroy
competition not in one state only, but throughout the entire
country, in the buying and selling of articles -- especially the
necessaries of life -- that go into commerce among the states. The
doctrine of the autonomy of the states cannot properly be invoked
to justify a denial of power in the national government to meet
such an emergency, involving as it does that freedom of commercial
intercourse among the states which the Constitution sought to
attain.
It is said that there are no proofs in the record which indicate
an
intention upon the part of the American Sugar Refining
Company and its associates to put a restraint upon trade or
commerce. Was it necessary that formal proof be made that the
persons engaged in this combination admitted in words that they
intended to restrain trade or commerce? Did anyone expect to find
in the written agreements which resulted in the formation of this
combination a distinct expression of a purpose to restrain
interstate trade or commerce? Men who form and control these
combinations are too cautious and wary to make such admissions
orally or in writing. Why, it is conceded that the object of this
combination was to obtain control of the business of making and
selling refined sugar throughout the entire country. Those
interested in its operations will be satisfied with nothing less
than to have the whole population of America pay tribute to them.
That object
Page 156 U. S. 44
is disclosed upon the very face of the transactions described in
the bill. And it is proved -- indeed, is conceded -- that that
object has been accomplished to the extent that the American Sugar
Refining Company now controls ninety-eight percent of all the sugar
refining business in the country, and therefore controls the price
of that article everywhere. Now the
mere existence of a
combination having such an object and possessing such extraordinary
power is itself, under settled principles of law, there being no
adjudged case to the contrary in this country, a direct restraint
of trade in the article for the control of the sales of which in
this country that combination was organized. And that restraint is
felt in all the states, for the reason, known to all, that the
article in question goes, was intended to go, and must always go,
into commerce among the several states, and into the homes of
people in every condition of life.
A decree recognizing the freedom of commercial intercourse as
embracing the right to buy goods to be transported from one state
to another without buyers' being burdened by unlawful restraints
imposed by combinations of corporations or individuals, so far from
disturbing or endangering would tend to preserve the autonomy of
the states, and protect the people of all the states against
dangers so portentous as to excite apprehension for the safety of
our liberties. If this be not a sound interpretation of the
Constitution, it is easy to perceive that interstate traffic, so
far as it involves the price to be paid for articles necessary to
the comfort and wellbeing of the people in all the states, may pass
under the absolute control of overshadowing combinations having
financial resources without limit, and an audacity in the
accomplishment of their objects that recognizes none of the
restraints of moral obligations controlling the action of
individuals -- combinations governed entirely by the law of greed
and selfishness, so powerful that no single state is able to
overthrow them, and give the required protection to the whole
country, and so all-pervading that they threaten the integrity of
our institutions.
We have before us the case of a combination which absolutely
controls, or may at its discretion control, the price of all
Page 156 U. S. 45
refined sugar in this country. Suppose another
combination, organized for private gain and to control
prices, should obtain possession of all the large flour mills in
the United States, another of all the grain elevators, another of
all the oil territory, another of all the salt-producing regions,
another of all the cotton mills, and another, of all the great
establishments for slaughtering animals and the preparation of
meats. What power is competent to protect the people of the United
States against such dangers except a national power, one that is
capable of exerting its sovereign authority throughout every part
of the territory and over all the people of the nation?
To the general government has been committed the control of
commercial intercourse among the states, to the end that it may be
free at all times from any restraints except such as Congress may
impose or permit for the benefit of the whole country. The common
government of all the people is the only one that can adequately
deal with a matter which directly and injuriously affects the
entire commerce of the country, which concerns equally all the
people of the Union, and which, it must be confessed, cannot be
adequately controlled by anyone state. Its authority should not be
so weakened by construction that it cannot reach and eradicate
evils that, beyond all question, tend to defeat an object which
that government is entitled, by the Constitution, to accomplish.
"Powerful and ingenious minds," this Court has said,
"taking, as postulates, that the powers expressly granted to the
government of the Union are to be contracted by construction into
the narrowest possible compass, and that the original powers of the
states are retained, if any possible construction will retain them,
may, by a course of well digested but refined and metaphysical
reasoning founded on these premises, explain away the Constitution
of our country and leave it a magnificent structure indeed to look
at, but totally unfit for use. They may so entangle and perplex the
understanding as to obscure principles which were before thought
quite plain, and induce doubts where, if the mind were to pursue
its own course, none would be perceived."
Gibbons v.
Ogden, 9 Wheat. 1,
22 U. S. 222.
While a decree annulling the contracts under which the
Page 156 U. S. 46
combination in question was formed may not, in view of the facts
disclosed, be effectual to accomplish the object of the act of
1890, I perceive no difficulty in the way of the court passing a
decree declaring that that combination imposes an unlawful
restraint upon trade and commerce among the states, and perpetually
enjoining it from further prosecuting any business pursuant to the
unlawful agreements under which it was formed, or by which it was
created. Such a decree would be within the scope of the bill, and
is appropriate to the end which Congress intended to accomplish --
namely, to protect the freedom of commercial intercourse among the
states against combinations and conspiracies which impose unlawful
restraints upon such intercourse.
For the reasons stated, I dissent from the opinion and judgment
of the court.