Dueber Watch Case Manufacturing Co. v. E. Howard Watch and Clock Co. et al. 55 Fed., 851. Statement. Circuit Court, May 22, 1893. Defendants are sellers of watches and watch cases throughout the United States and Canada. Plaintiff is a manufacturer of watch cases, which it sells throughout the United States and foreign countries. In 1887, defendants agreed among themselves, and gave notice to plaintiff's customers, that they would sell no goods to anyone buying or selling plaintiff's goods. After the Trust Act was passed, in 1890, defendants renewed the agreement, and as a result plaintiff has been greatly damaged in its business. It sues to recover threefold the damages sustained. Opinion. It is a legal act, within the provisions of the law in question, for two or more traders to agree among themselves that they will not deal with those who purchase goods of another designated trader in the same business. A demurrer to the complaint is sustained. 64 Fed., 724. United States v. Debs et al. Circuit Court, December 14, 1894. Consideration of the Trust Act is unessential to the decision of this case, but the following points are decided: 1. That the Trust Act forbids combinations of labor in restraint of commerce as much as it does combinations of capital. 2. The granting of power to the circuit courts to prevent and restrain violations of the Trust Act is not an invasion of the right to trial by jury as the jurisdiction of equity will be deemed to be limited to such cases only as are of equitable cognizance. 156 U. S., 1. Statement. United States v. E. C. Knight Co. January 21, 1895. The American Sugar Refining Company, a New Jersey corporation, being in control of a large majority of the manufactories of refined sugar in the United States, purchased stock in four Philadelphia refineries, which gave it a practical monopoly of the sugar business throughout the United States. The United States brings a bill to have the purchases set aside as contrary to the Trust Act; and for other relief. Opinion. The Trust Act was passed concerning commerce among the states. Unless refining sugar is a part of interstate commerce, the Trust Act does not apply. "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 of product passes from the control of the state and belongs to commerce." Some of the sugar refined is used within the state and some is sent out of the state; and this is true of the wheat, corn, cotton and cattle that are raised, and of nearly everything that is manufactured. To hold this a part of interstate commerce would give the United States, in the grant to regulate commerce among the states, control of nearly all the business in the states. It was never intended to give such power to the national government. It must be held that an article does not become a part of interstate commerce until it is started for another state; therefore, monopolies in the manufacture of a necessary of life are not covered by the Trust Act. "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 bill is dismissed. American Soda-Fountain Co. v. Green et al. 69 Fed., 333. Statement. June 4, 1895. In a suit for infringement of a patent relating to soda-water fountains, the answer alleged that complainant company was an illegal combination formed by a great number of manufac turers of soda-water apparatus fixing the price thereof, and restraining competition; that in furtherance of this object it had acquired a large number of patents, and that in bringing this suit the complainants sought to harass defendants and destroy their business, because they refused to join the combination. Opinion. Held that although this was true it was no defense. United States v. Addyston Pipe and Steel Co. et al. 78 Fed., 712. 85 Fed., 271. U. S., Statement. Circuit Court, 1897. Circuit Court of Appeals, 1898. Supreme Court, 1899. Defendants are six corporations, manufacturers of cast-iron pipe. They supply such pipe throughout 36 states. An association was formed by them whereby they agreed not to compete with each other. This agreement was to be carried out thus: A committee of a representative from each corporation set the price for each job, and the corporation that would give the largest bonus for the job got it, the others putting in higher bids to make an apparent competition. The United States brings suit under the Trust Act to break up this association. Opinion of Circuit Court. "The object of the bonus and of the association really is not to prevent all members of the association from furnishing and shipping their manufactured products, but to determine among themselves which one of them shall do so. There is certainly no restraint in this." It is held that this agreement does not directly restrain commerce, and that to fall within the Trust Act the combination must directly affect interstate commerce. The bill is dismissed. Opinion of Circuit Court of Appeals. "The subject-matter of the restraint here was not articles of merchandise or their manufacture, but contracts for sale of such articles to be delivered across state lines and the negotiations and bids preliminary to the making of such contracts, all of which do not merely affect interstate commerce but are interstate commerce." Within a limit the * * * defendants could fix prices as they chose. The restraint imposed was only partial. It did not cover the United States. There was not a complete monopoly. It was tempered by the fear of competition, and it affected only a part of the price. But this fact does not take the contract of association out of the annulling effect of the rule against monopolies. "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." Nor at common law is there any question of reasonableness of price open to the courts with reference to such a contract for monopoly. Its tendency is to give power to charge unreasonable prices if the parties choose to do so. "For the reasons given [that the contracts are monopolistic and are a restraint upon interstate commerce and hence a violation of the Trust Act], the decree of the circuit court dismissing the bill must be reversed with instructions to enter a decree for the United States perpetually enjoining the defendants from maintaining the combination in cast-iron pipe described in the bill.” Opinion of Supreme Court. Application of statute. "As has frequently been said, interstate commerce consists of intercourse and traffic between the citizens or inhabitants of different states, and includes not only the transportation of persons and property and the navigation of public waters for that purpose, but also the purchase, sale and exchange of commodities. * If, therefore, an agreement or combination directly restrains not alone the manufacture, but the purchase, sale or exchange of the manufactured commodity among the several states, it is brought within the provisions of the statute. The power * * to regulate such commerce, that is, the power to prescribe the rules by which it shall be governed, is vested in Congress, and when Congress has enacted a statute such as the one in question, any agreement or combination which directly operates not alone upon the manufacture, but on the sale, transportation and delivery of any article of interstate com merce by preventing or restricting its sale, etc., thereby regulates interstate commerce to that extent, and to the same extent trenches upon the power of the National Legislature and violates the statute." Regulation of commerce may restrict individual contracts. It has been declared "that the power of Congress to regulate commerce was never intended to be exercised so as to interfere with private contracts not designed at the time they were made to create impediments to such commerce;" but that "the reason for vesting in Congress the power to regulate commerce was to insure uniformity of regulation against conflicting and discriminating state legislation. "It is undoubtedly true that among the reasons, if not the strongest reason, for placing the power in Congress to regulate interstate commerce was that which is stated. "The reasons which may have caused the framers of the Constitution to repose the power to regulate interstate commerce in Congress do not, however, affect or limit the extent of the power itself. "In Gibbons v. Ogden (supra) the power was declared to be complete in itself and to acknowledge no limitations other than are prescribed by the Constitution. "Under this grant of power to Congress that body, in our judgment, may enact such legislation as shall declare void. and prohibit the performance of any contract between individuals or corporations where the natural and direct effect of such a contract will be, when carried out, to directly and not as a mere incident to other and innocent purposes regulate to any substantial extent interstate commerce. (And when we speak of interstate we also include in our meaning foreign commerce.) We do not assent to the correctness of the proposition that the constitutional guaranty of liberty to the individual to enter into private contracts limits the power of Congress and prevents it from legislating upon the subject of contracts of the class mentioned. "The power to regulate interstate commerce is, as stated by Chief Justice Marshall, full and complete in Congress, and there is no limitation in the grant of the power which excludes private contracts of the nature in question from the jurisdiction of that body. Nor is any such limitation contained |