nopolies," and in the prosecution of this un- | defendants, and copies of the articles of as-
lawful combination they had agreed to hin-sociation and by-laws of the exchange were
der and delay the business of buying and attached to the affidavit of the president of
selling cattle at the market named, and the exchange and read on the motion.
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 stock yards of any cattle
to any person who might be a buyer and spec-
ulator 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 stock yards, 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 stock yards, 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 stock yards, [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' Live Stock Exchange would not permit other traders and speculators upon the market, and that the exchange does not permit commission firms at the stock yards 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 Live Stock 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.

Among other affidavits was that of the general superintendent of the stock-yards company, who said that he had known the organization, the Traders' Live Stock Exchange, since its formation, and that it had been a benefit to the live-stock 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 *and verbal agree-[610] ments; 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 eightyfive per cent 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 menbers 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 Upon the bill and affidavits application market shipped to other states or to foreign was made to the circuit court for the west-countries; that except in rare instances both ern 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

purchases and sales made by the defendants [611]
are made from and to persons not members of
the exchange, and that in the judgment of
the president about ninety-nine per cent of

the transactions by the defendants are with | Live Stock Exchange, 143 III. 210, 18 L. R persons not members of the exchange.

Wering v. Mobile, 8 Wall. 110, 19 L. ed. $42.

|

The right to bring an article into a state earries with it the right to sell it.

Spellman v. New Orleans, 45 Fed. Rep. , 3 Inters. Com. Rep. 575; Re Harmon, 43 Fed. Rep. 372.

er v. Texas, 128 U. S. 129, 32 L. ed. 368, 2
Inters. Com. Rep. 241; Philadelphia & 9.
Mail S. S. Co. v. Pennsylvania, 122 U. S.
326, 30 L. ed. 1200, 1 Inters. Com. Rep. 308;
Corson v. Maryland, 120 U. S. 502, 30 L.
ed. 699, 1 Inters. Com. Rep. 50; Robbins v.
Shelby County Taxing Dist. 120 U. S. 489,
30 L. ed. 694, 1 Inters. Com. Rep. 45; Moran
v. New Orleans, 112 U. S. 69, 28 L. ed. 653;
Leloup v. Port of Mobile, 127 U. S. 640, 32
L. ed. 311, 2 Inters. Com. Rep. 134; The
Daniel Ball, 10 Wall. 557, 19 L. ed. 999;
Sinnot v. Davenport, 22 How. 227, 16 L. ed.
243; Smith v. Turner, 7 How. 283, 12 L. ed.
702; Re Bell, 25 U. S. App. 379, 68 Fed.
Rep. 183, 15 C. C. A. 360.

The buying, selling, and transportation ineident thereto, constitute commerce.

United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325; Lehigh Valley R. Co. v. Pennsylvania, 145 U. S. 192, 36 L. ed. 672, 4 Inters. Com. Rep. 87; Re Rahrer, 140 U. S. 545, 35 L. ed. 572; McCall v. California, 136 U. S. 104, 34 L. ed. 392; Bowman v. Chicago & N. W. R. Co. 125 U. S. 465, 31 L. ed. 700, 1 Inters. Com. Rep. 823; Welton v. Missouri, 91 U. S. 275, 23 L. ed. 347; W. A. Vandercook Co. v. Vance, 80 Fed. Rep. 786.

The statutes of the state intended to regulate or tax, or to impose any other restrictions upon, the transmission of persons or property, or telegraphic messages from one state to another, are void.

Wabash, St. L. & P. R. Co. v. Illinois, 118 U. S. 557, 30 L. ed. 244, 1 Inters. Com. Rep. 31; Pickard v. Pullman Southern Car Co. 117 U. S. 34, 29 L. ed. 785.

No state can impose a tax on persons engaged in the sale of goods in such state, which are introduced into the state from other states.

Walling v. Michigan, 116 U. S. 446, 29 L. ed. 691; Cook v. Pennsylvania, 97 U. S. 566, 24 L. ed. 1015; Hall v. DeCuir, 95 U. S. 485, 24 L. ed. 547; Hannibal & St. J. R. Co. v. Husen, 95 U. S. 465, 24 L. ed. 527; Welton v. Missouri, 91 U. S. 275, 23 L. ed. 347; Ward v. Maryland, 12 Wall. 418, 20 L. ed. 449; Re Lebolt, 77 Fed. Rep. 587.

No state can, under any pretense whatever, interfere with the right of any person who engages in interstate commerce, whether in the sale of goods introduced into the state from other states, or in soliciting orders for goods to be so introduced.

Ex parte Loeb, 72 Fed. Rep. 657; Southern R. Co. v. Asheville, 69 Fed. Rep. 359; Ex parte Hough, 69 Fed. Rep. 330, 5 Inters. Com. Rep. 327; Re Minor, 69 Fed. Rep. 233, 5 Inters. Com. Rep. 329; Aultman, M. & Co. v. Holder, 68 Fed. Rep. 467; Ex parte Scott, 66 Fed. Rep. 45; Rc Schechter, 63 Fed. Rep. 695, 4 Inters. Com. Rep. 849; Re Mitchell, 62 Fed. Rep. 576, 4 Inters. Com. Rep. 767; Re Worthen, 58 Fed. Rep. 467, 4 Inters. Com. Rep. 484; Re Rozelle, 57 Fed. Rep. 155; Re Ware, 53 Fed. Rep. 783; Re Sanders, 52 Fed. Rep. 802, 18 L. R. A. 549, 4 Inters. Com. Rep. 305: Re McAllister, 51 Fed. Rep. 282; Re Nichols, 48 Fed. Rep. 164; Re Tyerman, 48 Fed. Rep. 167; Re Houston, 47 Fed. Rep. 539, 14 L. R. A. 719; Re Kimmel, 41 Fed. Rep. 775, 3 Inters. Com. Rep. 114; 4dams Exp. Co. v. Ohio State Auditor, 165 U. S. 194, 41 L. ed. 683; Osborne v. Florida, 164 U. S. 650, 41 L. ed. 586; Brennan v. Titusville, 153 U. S. 289, 38 L. ed. 719, 4 Inters. Com. Rep. 658; Harman v. Chicago, 147 U. S. 396, 37 L. ed. 216; Crutcher v. Kentucky, 141 U. S. 47, 35 L. ed. 649; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 35 L. ed. 613, 3 Inters. Com. Rep. 595; Ash

The conduct and method of doing business by the members of this Traders' Live Stock Exchange is an interference with interstate commerce, and the association is illegal.

Allgeyer v. Louisiana, 165 U. S. 578, 41
L. ed. 832; United States v. Trans-Missouri
Freight Asso. 166 U. S. 290, 41 L. ed. 1007;
Re Rahrer, 140 U. S. 545, 35 L. ed. 572.

*Mr. Justice Peckham, after stating the [612] facts, delivered the opinion of the court:

There is really no dispute in regard to the
facts in the case. Although the bill con-
tains various allegations in regard to con-
spiracies, 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 pre-
venting 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 mem-
bers of the exchange, or with commission
merchants where such commission merchants
themselves do business with 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 ex-
change and adopt and enforce the rules men-
tioned above, and the question is whether by
their adoption and by peacefully carrying
them out without threats and without vio-
lence, 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, ante, 290, 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 by-laws in question, is an agree ment or combination in restraint of interstate trade or commerce.

The facts first set forth in the complainants' 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

In the view we take of this case we are not called upon to decide whether the deIt will be remembered that the association fendants are or are not engaged in interstate does no business itself. Those who are mem- commerce, because if it be conceded they bers thereof compete among themselves and are so engaged, the agreement as evidenced with others who are not members, for the by the by-laws is not one in restraint of that purchase of the cattle, while the association trade, nor is there any combination to moitself has nothing whatever to do with trans-nopolize or attempt to monopolize such trade portation nor with fixing the prices for within the meaning of the act. which the cattle may be purchased or thereafter sold. Any yard trader can become a member of the association upon complying 171 U. S. U. S., Book 43.

It has already been stated in the Hopkins Case, above mentioned, that in order to come within the provisions of the statute the di20

305

rect effect of an agreement or combination | was not formed for pecuniary profits, and a must be in restraint of that trade or com- careful perusal of the whole agreement fails, merce which is among the several states, or as we think, to show that its purpose was with foreign nations. Where the subject- other than as stated in the preamble. In matter of the agreement does not directly re- other words, we think that the rules adopted late to and act upon and embrace interstate do not contradict the expressed purpose of commerce, and where the undisputed facts the preamble, and that the result naturally clearly show that the purpose of the agree to be expected from an enforcement of the ment was not to regulate, obstruct, or re- rules would not directly, if at all, affect instrain that commerce, but that it was en- terstate trade or commerce. The agreement tered into with the object of properly and now under discussion differs radically from fairly regulating the transaction of the busi- those of United States v. Jellico Mountain ness in which the parties to the agreement Coal & Coke Company, 46 Fed. Rep. 432 [3 were engaged, such agreement will be upheld Inters. Com. Rep. 626, 12 L. R. A. 753]; [616]as not within the statute, where it can be United States v. Coal Dealers' Association, seen that the character and terms of the 85 Fed. Rep. 252, and United States v. Adagreement are well calculated to attain the dyston Pipe & Steel Company [54 U. S. App. purpose for which it was formed, and where 723], 85 Fed. Rep. 271. The agreement in the effect of its formation and enforcement all of these cases provided for fixing the upon interstate trade or commerce is in any prices of the articles dealt in by the different event but indirect and incidental, and not its companies, being in one case iron pipe for purpose or object. As is said in Smith v. gas, water, sewer, and other purposes, and Alabama, 124 U. S. 465, 473 [31; 508, 510, coal in the other two cases. If it were con1 Inters. Com. Rep. 804]: "There are many ceded that these cases were well decided, cases, however, where the acknowledged they differ so materially and radically in powers of a state may be exerted and applied their nature and purpose from une case under in such a manner as to affect foreign or inter- consideration that they form no basis for its state commerce without being intended to decision. This association does not meddle operate as commercial regulations." The with prices and itself does no business. In same is true as to certain kinds of agree refusing to recognize any yard trader who is ments entered into between persons engaged in the same business for the direct and bona not a member of the exchange, we see no purfide purpose of properly and reasonably regu- restraining interstate commerce, which, if pose of thereby affecting or in any manner lating the conduct of their business among affected at all, can only be in a very indirect themselves and with the public. If an agree- and remote manner. The rule has no direct ment of that nature, while apt and proper tendency to diminish or in any way impede for the purpose thus intended, should pos- or restrain interstate commerce in the cat sibly, though only indirectly and uninten- tle dealt in by defendants. There is no tendtionally, affect interstate trade or commerce, in that event we think the agreement would ency as a result of the rule, directly or inbe good. Otherwise, there is scarcely any directly, to restrict the competition among agreement among men which has interstate defendants for the class of cattle dealt in by or foreign commerce for its subject that may the market composed of defendants, and also them. Those who are selling the cattle have not remotely be said to, in some obscure way, affect that commerce and to be therefore composed of the representative buyers of all void. We think, within the plain and ob- the packing houses at Kansas City, and also vious construction to be placed upon the of the various commission merchants who are act, and following the rules in this regard constantly buying on orders and of those already laid down in the cases heretofore who are buying on their own account. This decided in this court, we must hold the agree- makes a large competition wholly outside of ment under consideration in this suit to be the defendants. The owner of cattle for sale [618)

valid.

is therefore furnished with a market at
which the competition of buyers has a broad

of.

From very early times it has been the custom for men engaged in the occupation of effect. All yard traders have the opportu buying and selling articles of a similar na-nity of becoming members of the exchange, ture at any particular place to associate and to thus obtain all the advantages there 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 [617]have been voluntary, and the *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

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