The Traders' Live. Stock Exchange was an unincorporated
association in Kansas City whose members bore much the same
relation to it, and through it carried on much the same business as
that carried on by the members of the Kansas City Live Stock
Exchange, considered and passed upon in
Hopkins v. United
States, just decided. The main difference was that the members
of the Traders' Exchange, defendants in the present proceedings,
were themselves purchasers of cattle on the market, while the
defendants in the former case were commission merchants who sold
cattle upon commission as a compensation for their service. The
articles of association of the Traders' Exchange contained the
following preamble:
"We, the undersigned, for the purpose of organizing and
maintaining a business exchange, not for pecuniary profit or gain,
but to promote and protect all interests connected with the buying
and selling of livestock at the Kansas City Stock Yards, and to
cultivate courteous and manly conduct towards each other, and give
dignity and responsibility to yard traders, have associated
ourselves together under the name of Traders' Live Stock Exchange,
and hereby agree each with the other that we will faithfully
observe and be bound by the following rules and bylaws and such new
rules, additions, or amendments as may from time to time be adopted
in conformity with the provisions thereof from the date of
organization."
The rules objected to in the bill in this case were the
following:
"Rule 10. This exchange will not recognize any yard trader
unless he is a member of the Traders' Live Stock Exchange."
"Rule 11.
Page 171 U. S. 605
When there are two or more parties trading together as partners,
they shall each and all of them be members of this exchange."
"Rule 12. No member of this exchange shall employ any person to
buy or sell cattle unless such person hold a certificate of
membership in this exchange."
"Rule 13. No member of this exchange shall be allowed to pay any
order buyer or salesman any sum of money as a fee for buying cattle
from or selling cattle to such party."
Held:
(1) That this Court is not called upon to decide whether the
defendants are or are not engaged in interstate commerce, because
if it be conceded they are so engaged, the agreement as evidenced
by the bylaws is not one in restraint of that trade, nor is there
any combination to monopolize or attempt to monopolize such trade
within the meaning of the act.
(2) That, following the preceding case, in order to come within
the provisions of the statute, the direct effect of an agreement or
combination must be in restraint of that trade or commerce which is
among the several states, or with foreign nations.
(8) That where the subject matter of the agreement does not
directly relate to and act upon and embrace interstate commerce,
and where the undisputed facts clearly show that the purpose of the
agreement was not to regulate, obstruct, or restrain that commerce,
but that it was entered into with the object of properly and fairly
regulating the transaction of the business in which the parties to
the agreement were engaged, such agreement will be upheld as not
within the statute where it can be seen that the character and
terms of the agreement are well calculated to attain the purpose
for which it was formed, and where the effect of its formation and
enforcement upon interstate trade or commerce is, in any event, but
indirect and incidental, and not its purpose or object.
(4) That the rules are evidently of a character to enforce the
purpose and object of the exchange as set forth in the preamble,
and that for such purpose they are reasonable and fair, and that
they can possibly affect interstate trade or commerce in but a
remote way, and are not void as violations of the act of
Congress.
This suit is somewhat similar to the
Hopkins suit, just
decided, and was brought by the United States against the
defendants named, who were citizens and residents of the Western
Division of the Western District of Missouri and members of a
voluntary unincorporated association known and designated as the
Traders' Live Stock Exchange, the suit being brought for the
purpose of obtaining a decree dissolving the exchange and enjoining
the members thereof from entering into or continuing any sort of
combination to deprive any .people engaged in shipping, selling,
buying and handling
Page 171 U. S. 606
livestock (received from other states and from the territories,
intended to be sold at the Kansas City market) of free access to
the markets at Kansas City, and to the same facilities afforded by
the Kansas City stockyards to defendants and their associate
members of the Traders' Livestock Exchange.
The bill was filed under the direction of the Attorney General
of the United States by the United States District Attorney for the
Western District of Missouri. It alleged in substance that the
exchange was governed by a board of eight directors who carried on
the business thereof with the consent and approbation of the
defendants, they personally being members of the exchange. It then
made the same allegations in relation to the stockyards being
partly in Kansas City, Kansas, and partly in Kansas, City,
Missouri, that are contained in the bill in the
Hopkins
case, just decided, and also as to the sales of herds or droves of
cattle which were at the time of the sale partly in one state and
partly in another. It is further alleged that the Kansas City
stockyards is a public market, and, next to the market at Chicago,
in the State of Illinois, is the largest livestock market in the
world, and vast numbers of cattle, hogs, and other livestock are
received annually at the market, shipped from various states and
from the territories, and are sold at the market to buyers who
reside in other states and territories and who reship the stock;
that the stock is shipped to the market under contracts by which
the shipper is permitted to unload the stock at the Kansas City
stockyards, rest, water, and feed the same, and is accorded the
privilege of selling the stock on the Kansas City market if the
prices prevailing at the time justify the sale, and many head of
such stock are so sold; that, prior to the month of March, 1897, as
alleged, the defendants herein were engaged as speculators at the
Kansas City stockyards, and were buying upon the market, and
reselling upon the same market, and reshipping to other markets in
other states the cattle so received at the Kansas City stockyards;
that all the livestock shipped to and received at these stockyards
is consigned to commission merchants, who take charge of the stock
when it is received, and who sell the same
Page 171 U. S. 607
to packing houses located at Kansas City, Missouri, and Kansas
City in the State of Kansas, and they sell large numbers of cattle
to the defendants herein.
The bill then alleges that the defendants
"have unlawfully entered into a contract, combination, and
conspiracy in restraint of trade and commerce among the several
states and with foreign nations, in this, to-wit, that they have
unlawfully agreed, contracted, combined, and conspired to prevent
all other persons than members of the Traders' Livestock Exchange,
as aforesaid, from buying and selling cattle upon the Kansas City
market at the Kansas City stockyards as aforesaid; that the
commission firm, person, partnership, or corporation to whom said
cattle are consigned at Kansas City as aforesaid is not permitted
to and cannot sell or dispose of said cattle at the Kansas City
market, as aforesaid, to any buyer or speculator at the Kansas City
stockyards unless said buyer or speculator is a member of the
Traders' Livestock Exchange, and these defendants, and each of
them, unlawfully and oppressively refuses to purchase cattle, or in
any manner negotiate or deal with or buy from any commission
merchant who shall sell or purchase cattle, from any speculator at
the said Kansas City stockyards who is not a member of the said
Traders' Livestock Exchange; that, by and through the unlawful
agreement, combination, and conspiracy of these defendants, the
business and traffic in cattle at the said Kansas City stockyards
is interfered with, hindered, and restrained, thus entailing extra
expense and loss to the owner and placing an obstruction and
embargo on the marketing of cattle shipped from the states and
territories aforesaid to the Kansas City stockyards."
It is further alleged that, acting in pursuance of the unlawful
combination above described, the board of directors of the exchange
have imposed fines upon certain members of the exchange
"who had traded with persons, speculators upon the markets, who
were not members of the said livestock exchange, and within three
months last past have imposed fines upon members of said livestock
exchange who have traded with commission firms at said Kansas City
stockyards,
Page 171 U. S. 608
which said commission firms had bought from, and sold cattle to,
speculators upon said market who were not members of the said
livestock exchange."
It was further stated in the bill that, in carrying out the
purposes and aims of this exchange, and by the conduct of its
members engaged in this alleged combination, conspiracy, and
confederation, they were acting in violation of the laws of the
United States, and particularly in violation of section 1 of the
Act of Congress approved July 2, 1890, entitled "An act to protect
trade and commerce against unlawful restraints and monopolies," and
in the prosecution of this unlawful combination they had agreed to
hinder and delay the business of buying and selling cattle at the
market named, and had confederated together in restraint of trade
and commerce between the states, and that the object of the
defendants in organizing the exchange was to prevent the sale by
any commission merchant at the Kansas City stockyards of any cattle
to any person who might be a buyer and speculator upon the market
who is not a member of the exchange.
Accompanying this bill were several affidavits of individuals
not members of the exchange, but who were traders or speculators at
the stockyards, and those persons said that they were acquainted
with the association in question, and with the officers and
members, and that they did everything in their power to prevent
other persons who were not members from trading at the stockyards,
and a number of instances were given in which the affiants, who
were not members of the exchange, were endeavoring to do business
with commission merchants and others at the exchange in question,
when the affiants were notified that they could not continue in
business unless they became members of the association, and, where
partnerships were engaged in business where one partner was a
member of the association, the partner who was a member was
notified that he could not continue in the partnership business
with the other unless such other also became a member; that they
had attempted to buy cattle from a great many commission firms, and
from their salesmen at these stockyards,
Page 171 U. S. 609
but as soon as they went into the yards where the cattle were
that were consigned to commission firms and attempted to purchase
them, some of the defendants would appear, call the salesman aside,
and, after having a conversation with such salesman, the latter
would invariably return to affiant and say that he could not price
cattle to the affiant or sell the same to him as he had been warned
by members of the exchange not to do so; that the Traders'
Livestock Exchange would not permit other traders and speculators
upon the market, and that the exchange does not permit commission
firms at the stockyards to sell cattle consigned to them to any
trader or speculator upon the market who is not a member of the
exchange, and that commission firms had been notified by the
officers of the stock exchange not to sell to speculators on the
market who were not members of the livestock exchange, and, where
commission firms sold cattle to traders and speculators upon the
market who were not members of the exchange, the association and
members thereof would boycott the commission firm making such sales
and refuse to purchase any cattle from them, and refuse to go into
the lots and look at cattle which had been consigned to them.
Upon the bill and affidavits, application was made to the
Circuit Court for the Western division of the Western District of
Missouri for an injunction as prayed for in the bill, in opposition
to which application various affidavits were read on the part of
the defendants, and copies of the articles of association and
bylaws of the exchange were attached to the affidavit of the
president of the exchange and read on the motion.
Among other affidavits was that of the general superintendent of
the stockyards company, who said that he had known the
organization, the Traders' Livestock Exchange, since its formation,
and that it had been a benefit to the livestock market at Kansas
City by furnishing constant buyers for cattle shipped to the
market, no matter how large the receipts for any one day or series
of days might be, and also by raising the standard of business
integrity among its members, because it required every member to
comply with his business promises
Page 171 U. S. 610
and verbal agreements; that no embargo was placed upon anyone
purchasing or desiring to purchase cattle at the yards, but a free
and open market was offered to all buyers and sellers; that the
members of the organization were engaged in the business of buying
and selling cattle on the market, and were competitors among and
against each other; that their organization did not restrain or
interfere with interstate or local commerce, and the members did
not monopolize or attempt to monopolize the business of buying and
selling cattle at Kansas City, nor did the organization in any
manner tend to limit or decrease the number of cattle marketed at
Kansas City, but that it had the contrary effect; that about
eighty-five percent of the total receipts for the years 1895, 1896,
and 1897 at the Kansas City market of cattle had been billed to the
Kansas City market alone, for purposes of sale there.
Other affidavits were presented to the same effect. Also the
affidavit of the president of the exchange. The president denied
all allegations in relation to conspiracies to prevent other
persons than members of the exchange from buying and selling cattle
upon the Kansas City market, and, on the contrary, alleged that in
buying cattle, the defendants were in competition with each other,
with the representative buyers of all the packing houses, with the
representatives of the various commission merchants, who buy
constantly on orders from a distance, and with others who buy on
orders on their own account, none of whom are members of the
exchange, and that with these various classes of buyers the
defendants constantly deal, and that, in selling cattle, they
compete with each other and with shippers and commission merchants
offering stock for sale on the market; that the business in which
these defendants are engaged is that of buying and selling cattle
known as "stockers and feeders;" that the business is purely local
to that market; that the defendants do not deal in quarantine
cattle subject to government inspection, or cattle shipped through
to other markets, with or without the privilege of the Kansas City
market, nor in fat cattle sold on the local market shipped to other
states or to foreign countries; that, except in rare instances,
both purchases and sales made
Page 171 U. S. 611
by the defendants are made from and to persons not members of
the exchange, and that, in the judgment of the president, about
ninety-nine percent of the transactions by the defendants are with
persons not members of the exchange.
A copy of the articles of association is annexed to the
affidavit, which contains the following preamble:
"We, the undersigned, for the purpose of organizing and
maintaining a business exchange, not for pecuniary profit or gain,
but to promote and protect all interest connected with the buying
and selling of livestock at the Kansas City stockyards, and to
cultivate courteous and manly conduct towards each other and give
dignity and responsibility to yard traders, have associated
ourselves together under the name of 'Traders' Livestock Exchange,'
and hereby agree, each with the other, that we will faithfully
observe and be bound by the following rules and bylaws, and such
new rules, additions, or amendments as may from time to time be
adopted in conformity with the provisions thereof from the date of
organization."
Rules 10, 11, 12, and 13 are as follows:
"Rule 10. This exchange will not recognize any yard trader
unless he is a member of the Traders' Livestock Exchange."
"Rule 11. When there are two or more parties trading together as
partners, they shall each and all of them be members of this
exchange."
"Rule 12. No member of this exchange shall employ any person to
buy or sell cattle unless such person hold a certificate of
membership in this exchange."
"Rule 13. No member of this exchange shall be allowed to pay any
order buyer or salesman any sum of money as a fee for buying cattle
from or selling cattle to such party."
These are the rules which are specially obnoxious to the
complainants, and are alleged to be in their effect in violation of
the federal statute above mentioned.
Page 171 U. S. 612
MR. JUSTICE PECKHAM, after stating the facts, delivered the
opinion of the court.
There is really no dispute in regard to the facts in the case.
Although the bill contains various allegations in regard to
conspiracies, agreements, and combinations in restraint of trade
and in violation of the federal statute, yet there is no evidence
of any act on the part of the defendants preventing access to the
yards, or preventing purchases and sales of cattle by anyone, other
than as such sales may be prevented by the mere refusal on the part
of the defendants as "yard traders" to do business with those who
are also yard traders, but are not members of the exchange, or with
commission merchants, where such commission merchants themselves do
business with the yard traders who are not members of the exchange.
In other words, there is no evidence, and really no charge, against
the defendants that they have done anything other than to form this
exchange and adopt and enforce the rules mentioned above, and the
question is whether, by their adoption and by peacefully carrying
them out, without threats and without violence, but by the mere
refusal to do business with those who will not respect their rules,
there is a violation of the federal statute.
This case differs from that of
Hopkins v. United States,
supra, in the fact that these defendants are themselves
purchasers of cattle on the market, while the defendants in the
Hopkins case were only commission merchants who sold the
cattle upon commission as a compensation for their services.
Counsel for the government assert that any agreement or
combination among buyers of cattle coming from other states, of the
nature of the bylaws in question, is an agreement or combination in
restraint of interstate trade or commerce.
The facts first set forth in the complainant's bill upon which
to base the claim that the business of defendants is interstate
commerce we have already decided in the
Hopkins case to be
immaterial. The particular situation of the yards, partly in Kansas
and partly in Missouri, we there held was a fact without any
weight, and one which did not make business interstate
Page 171 U. S. 613
commerce which otherwise would not partake of that
character.
There remain in the bill of the complainants the allegations
that the cattle come from various states, and are placed on sale at
these stockyards, which form the only available market for many
miles around, and that they are sold by the commission merchants,
and are bought in large numbers by the defendants, who have entered
into what the complainants allege to be a contract, combination,
and conspiracy in restraint of trade and commerce among the several
states, which contract, etc., it is alleged, is carried out by
defendants unlawfully and oppressively refusing to purchase cattle
from a commission merchant who sells or purchases cattle from any
speculator (yard trader) who is not a member of the exchange, and
it is further alleged that by these means, the traffic in cattle at
the Kansas City stockyards is interfered with, hindered, and
restrained, and extra expense and loss to the owner incurred, and
that thereby the defendants have placed an obstruction and embargo
on the marketing of cattle shipped from other states. All these
results are alleged to flow from the agreement among the defendants
as contained in the bylaws of their association, particularly those
numbered 10, 11, 12, and 13, copies of which are set forth in the
statement of facts herein.
There is no evidence that these defendants have in any manner
other than by the rules above mentioned hindered or impeded others
in shipping, trading, or selling their stock, or that they have in
any way interfered with the freedom of access to the stockyards of
any and all other traders and purchasers, or hindered their
obtaining the same facilities which were therein afforded by the
stockyards company to the defendants as members of the exchange,
and we think the evidence does not tend to show that the above
results have flowed from the adoption and enforcement of the rules
and regulations referred to.
In regard to rule 10, the question is whether, without a
violation of the act of Congress, persons who are engaged in the
common business as yard traders of buying cattle at the
Page 171 U. S. 614
Kansas City stockyards, which come from different states, may
agree among themselves that they will form an association for the
better conduct of their business, and that they will not transact
business with other yard traders who are not members, nor will they
buy cattle from those who also sell to yard traders who are not
members of the association.
It will be remembered that the association does no business
itself. Those who are members thereof compete among themselves, and
with others who are not members, for the purchase of the cattle,
while the association itself has nothing whatever to do with
transportation, nor with fixing the prices for which the cattle may
be purchased or thereafter sold. Any yard trader can become a
member of the association upon complying with its conditions of
membership, and may remain such as long as he comports himself in
accordance with its laws. A lessening of the amount of the trade is
neither the necessary nor direct effect of its formation, and in
truth the amount of that trade has greatly increased since the
association was formed, and there is not the slightest evidence
that the market prices of cattle have been lowered by reason of its
existence. There is no feature of monopoly in the whole
transaction.
The defendants are engaged in buying what are called "stockers
and feeders," being cattle not intended for any other market, and
the demand for which is purely local. They have arrived at their
final destination when offered for sale, and there is free and full
competition for their purchase between all the members of the
exchange, as well as between them and all buyers not members
thereof, who are not also yard traders. With the latter the
defendants will not compete, nor will they buy of the commission
men if the latter continue to sell cattle to such yard traders.
Have the defendants the right to agree to conduct their own
private business in this way?
Whether there is any violation of the act of Congress by the
adoption and enforcement of the other rules of the association,
above referred to, will be considered hereafter.
It is first contended on the part of the appellants that
they
Page 171 U. S. 615
are not engaged in interstate commerce or trade, and that
therefore their agreement is not a violation of the act. They urge
that the cattle, by being taken from the cars in which they were
transported and placed in the various pens hired by commission
merchants at the cattle yards of Kansas City and there set up for
sale, have thereby been commingled with the general mass of other
property in the state, and that their interstate commercial
character has ceased within the decisions of this Court in
Brown v. Houston, 114 U. S. 622, and
Pittsburg & Southern Coal Co. v. Bates, 156 U.
S. 577.
On the other hand, it is answered that the cases cited involved
nothing but the general power of the state to tax all property
found within its limits, by virtue of general laws providing for
such taxation, where no tax is levied upon the article or
discrimination made against it by reason of the fact that it has
come from another state, and it is maintained that the agreement in
question acts directly upon the subject of interstate commerce, and
adds a restraint to it which is unlawful, under the provisions of
the statute.
In the view we take of this case, we are not called upon to
decide whether the defendants are or are not engaged in interstate
commerce, because, if it be conceded they are so engaged, the
agreement, as evidenced by the bylaws, is not one in restraint of
that trade, nor is there any combination to monopolize, or attempt
to monopolize, such trade, within the meaning of the act.
It has already been stated in the
Hopkins case, above
mentioned, that in order to come within the provisions of the
statute, the direct effect of an agreement or combination must be
in restraint of that trade or commerce which is among the several
states or with foreign nations. Where the subject matter of the
agreement does not directly relate to and act upon and embrace
interstate commerce, and where the undisputed facts clearly show
that the purpose of the agreement was not to regulate, obstruct, or
restrain that commerce, but that it was entered into with the
object of properly and fairly regulating the transaction of the
business in which the parties to the agreement were engaged, such
agreement will be upheld as
Page 171 U. S. 616
not within the statute where it can be seen that the character
and terms of the agreement are well calculated to attain the
purpose for which it was formed and where the effect of its
formation and enforcement upon interstate trade or commerce is, in
any event, but indirect and incidental, and not its purpose or
object. As is said in
Smith v. Alabama, 124 U.
S. 465,
124 U. S.
473:
"There are many cases, however, where the acknowledged powers of
a state may be exerted and applied in such a manner as to affect
foreign or interstate commerce without being intended to operate as
commercial regulations."
The same is true as to certain kinds of agreements entered into
between persons engaged in the same business for the direct and
bona fide purpose of properly and reasonably regulating
the conduct of their business among themselves and with the public.
If an agreement of that nature, while apt and proper for the
purpose thus intended, should possibly, though only indirectly and
unintentionally, affect interstate trade or commerce, in that event
we think the agreement would be good. Otherwise there is scarcely
any agreement among men which has interstate or foreign commerce
for its subject that may not remotely be said to, in some obscure
way, affect that commerce, and to be therefore void. We think,
within the plain and obvious construction to be placed upon the act
and following the rules in this regard already laid down in the
cases heretofore decided in this Court, we must hold the agreement
under consideration in this suit to be valid.
From very early times, it has been the custom for men engaged in
the occupation of buying and selling articles of a similar nature
at any particular place to associate themselves together. The
object of the association has in many cases been to provide for the
ready transaction of the business of the associates by obtaining a
general headquarters for its conduct, and thus to insure a quick
and certain market for the sale or purchase of the article dealt
in. Another purpose has been to provide a standard of business
integrity among the members by adopting rules for just and fair
dealing among them and enforcing the same by penalties for their
violation. The agreements have been voluntary, and the
Page 171 U. S. 617
penalties have been enforced under the supervision and by
members of the association. The preamble adopted by the association
in this case shows the ostensible purpose of its formation. It was
not formed for pecuniary profits, and a careful perusal of the
whole agreement fails, as we think, to show that its purpose was
other than as stated in the preamble. In other words, we think that
the rules adopted do not contradict the expressed purpose of the
preamble, and that the result naturally to be expected from an
enforcement of the rules would not directly, if at all, affect
interstate trade or commerce. The agreement now under discussion
differs radically from those of
United States v. Jellico
Mountain Coal & Coke Co., 46 F. 432;
United States v.
Coal Dealers' Association of California, 85 F. 252, and
United States v. Addyston Pipe & Steel Co., 85 F. 271.
The agreement in all of these cases provided for fixing the prices
of the articles dealt in by the different companies, being in one
case iron pipe for gas, water, sewer, and other purposes, and coal
in the other two cases. If it were conceded that these cases were
well decided, they differ so materially and radically in their
nature and purpose from the case under consideration that they form
no basis for its decision. This association does not meddle with
prices, and itself does no business. In refusing to recognize any
yard trader who is not a member of the exchange, we see no purpose
of thereby affecting or in any manner restraining interstate
commerce, which, if affected at all, can only be in a very indirect
and remote manner. The rule has no direct tendency to diminish or
in any way impede or restrain interstate commerce in the cattle
dealt in by defendants. There is no tendency, as a result of the
rule, directly or indirectly to restrict the competition among
defendants for the class of cattle dealt in by them. Those who are
selling the cattle have the market composed of defendants, and also
composed of the representative buyers of all the packing houses at
Kansas City, and also of the various commission merchants who are
constantly buying on orders and of those who are buying on their
own account. This makes a large competition, wholly outside of the
defendants. The owner of
Page 171 U. S. 618
cattle for sale is therefore furnished with a market at which
the competition of buyers has a broad effect. All yard traders have
the opportunity of becoming members of the exchange and to thus
obtain all the advantages thereof.
The design of the defendants evidently is to bring all the yard
traders into the association as members so that they may become
subject to its jurisdiction and be compelled by its rules and
regulations to transact business in the honest and straightforward
manner provided for by them. If, while enforcing the rules, those
members who use improper methods or who fail to conduct their
business transactions fairly and honestly are disciplined and
expelled, and thereby the number of members is reduced, and to that
extent the number of competitors limited, yet all this is done not
with the intent or purpose of affecting in the slightest degree
interstate trade or commerce, and such trade or commerce can be
affected thereby only most remotely and indirectly, and if, for the
purpose of compelling this membership, the association refuse
business relations with those commission merchants who insist upon
buying from or selling to yard traders who are not members of the
association, we see nothing that can be said to affect the trade or
commerce in question other than in the most roundabout and indirect
manner. The agreement relates to the action of the associates
themselves, and it places, in effect, no tax upon any instrument or
subject of commerce; it exacts no license from parties engaged in
the commercial pursuits, and prescribes no condition in accordance
with which commerce in particular articles or between particular
places is required to be conducted.
Sherlock v. Alling,
93 U. S. 99;
Smith v. Alabama, 124 U. S. 465,
124 U. S. 473;
Pittsburg & Southern Coal Company v. Louisiana,
156 U. S. 590,
156 U. S.
598.
If, for the purpose of enlarging the membership of the exchange
and of thus procuring the transaction of their business upon a
proper and fair basis by all who are engaged therein, the
defendants refuse to do business with those commission men who sell
to or purchase from yard traders who are not members of the
exchange, the possible effect of such a course
Page 171 U. S. 619
of conduct upon interstate commerce is quite remote, not
intended, and too small to be taken into account.
The agreement lacks, too, every ingredient of a monopoly.
Everyone can become a member of the association, and the natural
desire of each member to do as much business as he could would not
be in the least diminished by reason of membership, while the
business done would still be the individual and private business of
each member, and each would be in direct and immediate competition
with each and all of the other members. If all engaged in the
business were to become members of the association, yet, as the
association itself does no business, it can and does monopolize
none. The amount and value of interstate trade is not at all
directly affected by such membership. The competition among the
members and with others who are seeking purchasers would be as
large as it would otherwise have been, and the only result of the
agreement would be that no yard traders would remain who were not
members of the association. It has no tendency, so far as can be
gathered from its object or from the language of its rules and
regulations, to limit the extent of the demand for cattle, or to
limit the number of cattle marketed, or to limit or reduce their
price, or to place any impediment or obstacle in the course of the
commercial stream which flows into the Kansas City cattle market.
While in case all the yard traders are not induced to become
members of the association, and those who are such members refuse
to recognize the others in business, we can see no such direct,
necessary, or natural connection between that fact and the
restraint of interstate commerce as to render the agreement not to
recognize them void for that reason. A claim that such refusal may
thereby lessen the number of active traders on the market, and thus
possibly reduce the demand for, and the prices of, the cattle there
set up for sale, and so affect interstate trade, is entirely too
remote and fanciful to be accepted as valid.
This case is unlike that of
Hopkins v. Oxley Stave
Company, 83 F. 912, to which our attention has been called.
The case cited was decided without reference to the act of
Congress,
Page 171 U. S. 620
upon which alone the case at bar is prosecuted, and the
agreement was held void at common law as a conspiracy to wrongfully
deprive the plaintiff of its right to manage its business according
to the dictates of its own judgment. It was also said that the fact
could not be overlooked that another object of the conspiracy was
to deprive the public at large of the benefits to be derived from a
labor-saving machine which seemed to the court to be on of great
utility. No question as to interstate commerce arose and none was
decided.
From what has already been said regarding rule 10, it would seem
to follow that the other rules (11, 12, and 13) are of equal
validity as rule 10, and for the same reasons. The rules are
evidently of a character to enforce the purpose and object of the
exchange as set forth in the preamble, and we think that for such
purpose they are reasonable and fair. They can possibly affect
interstate trade or commerce in but a remote way, and are not void
as violations of the act of Congress.
We are of opinion, therefore, that the order in this case should
be reversed, and the case remanded to the Circuit Court of the
United States for the Western division of the Western District of
Missouri with directions to dismiss the complainants' bill, with
costs.
MR. JUSTICE McKENNA took no part in the decision of this
case.
