219 Opinion of the Court. Only by returning to the Knight approach, and severing the intrastate events relating to the beets, including the price restraints, from the later events relating to the sugar, including its interstate sale, could we conclude there were no forbidden restraints or practices touching interstate commerce here. At this late day we are not willing to take that long backward step. III. We turn then to consider the questions posed upon the amended complaint that are relevant under the presently controlling criteria. These are whether the allegations disclose a restraint and monopolistic practices of the types outlawed by the Sherman Act; whether, if so, those acts are shown to produce the forbidden effects upon commerce; and whether the effects create injury for which recovery of treble damages by the petitioners is authorized. It is clear that the agreement is the sort of combination condemned by the Act,15 even though the price-fixing was by purchasers,16 and the persons specially injured under the treble damage claim are sellers, not customers or consumers." And even if it is assumed that the final aim of the conspiracy was control of the local sugar beet market, it does not follow that it is outside the scope of the Sherman Act. For monopolization of local business, when achieved by restraining interstate commerce, is con 15 United States v. Frankfort Distilleries, 324 U. S. 293, and authorities cited. 18 Cf. United States v. Socony-Vacuum Oil Co., 310 U. S. 150; American Tobacco Co. v. United States, 328 U. S. 781; United States v. Patten, 226 U. S. 525; Swift & Co. v. United States, 196 U. S. 375. Each case involved outlawed practices by persons who were both purchasers and sellers, and forbidden effects upon sellers as well as purchasers and consumers. 17 See note 16. Opinion of the Court. 334 U.S. demned by the Act. Stevens Co. v. Foster & Kleiser, 311 U. S. 255, 261. And a conspiracy with the ultimate object of fixing local retail prices is within the Act, if the means adopted for its accomplishment reach beyond the boundaries of one state. United States v. Frankfort Distilleries, 324 U. S. 293. The statute does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers. Nor does it immunize the outlawed acts because they are done by any of these. Cf. United States v. SoconyVacuum Oil Co., 310 U. S. 150; American Tobacco Co. v. United States, 328 U. S. 781. The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated. Cf. United States v. South-Eastern Underwriters Assn., supra, at 553. Nor is the amount of the nation's sugar industry which the California refiners control relevant, so long as control is exercised effectively in the area concerned, Indiana Farmer's Guide v. Prairie Farmer, 293 U. S. 268, 279, United States v. Yellow Cab Co., 332 U. S. 218, 225, the conspiracy being shown to affect interstate commerce adversely to Congress' policy. Congress' power to keep the interstate market free of goods produced under conditions inimical to the general welfare, United States v. Darby, 312 U. S. 100, 115, may be exercised in individual cases without showing any specific effect upon interstate commerce, United States v. Walsh, 331 U. S. 432, 437438; it is enough that the individual activity when multiplied into a general practice is subject to federal control, Wickard v. Filburn, supra, or that it contains a threat to the interstate economy that requires preventive regulation. Consolidated Edison Co. v. Labor Board, 305 U. S. 197, 221-222. Moreover, as we said in the Frankfort Distilleries case, "... there is an obvious distinction to be drawn between 219 Opinion of the Court. a course of conduct wholly within a state and conduct which is an inseparable element of a larger program dependent for its success upon activity which affects commerce between the states." 324 U. S. 293, 297. That statement is as true of the situation now presented as of the one then before us, although instead of restraining trade in order to control a local market petitioners control a local market in which they purchase. For this is not a case involving only "a course of conduct wholly within a state"; it is rather one involving "conduct which is an inseparable element of a larger program dependent for its success upon activity which affects commerce between the states," and in such a case it is not material that the source of the forbidden effects upon that commerce arises in one phase or another of that program. In view of all this, it is difficult to understand respondent's argument that the complaint does not allege that the conspiracy had any effect on interstate commerce, except on the basis of the discarded criteria discussed in Part II above. The contention ignores specific allegations which we have set forth. But apart from that fact it rests only on a single grounding, which in the circumstances of this case is little, if any, more than a different phrasing of the criteria supplanted by the Shreveport approach. This is that the change undergone in the manufacturing stage when the beets are converted into sugar makes the case different, for the Sherman Act's objects, than it would be if the identical commodity were concerned from the planting stage through the phase of interstate distribution, e. g., if the commodity were wheat, as was true in Wickard v. Filburn, supra, or raisins purchased by packers from growers and shipped interstate after packing, cf. Parker v. Brown, 317 U. S. 341, Opinion of the Court. 334 U.S. We do not stop to consider specific and varied situations in which a change of form amounting to one in the essential character of the commodity takes place by manufacturing or processing intermediate the stages of producing and disposing of the raw material intrastate and later interstate distribution of the finished product; or the effects, if any, of such a change in particular situations unlike the one now presented. For mere change in the form of the commodity or even complete change in essential quality by intermediate refining, processing or manufacturing does not defeat application of the statute to practices occurring either during those processes or before they begin, when they have the effects forbidden by the Act. Again, as we have said, the vital thing is the effect on commerce, not the precise point at which the restraint occurs or begins to take effect in a scheme as closely knit as this in all phases of the industry. Hence in this case the mere fact that the price fixing related directly to the beets did not sever or render insubstantial its effect subsequently in the sale of sugar. 19 Indeed that severance would not necessarily take place if the manufacturing stage had produced a much greater change in commodities than was effected here. But under the facts characterizing this industry's operation and the tightening of controls in this producing area by the new agreements and understandings, there can be no question. that their restrictive consequences were projected substantially into the interstate distribution of the sugar, as the amended complaint repeatedly alleges. Indeed 18 Compare Arkadelphia Milling Co. v. St. Louis Southwestern R. Co., 249 U. S. 134, with Cloverleaf Butter Co. v. Patterson, 315 U. S. 148. 19 Swift & Co. v. United States, 196 U. S. 375; American Tobacco Co. v. United States, 328 U. S. 781; United States v. Aluminum Co. of America, 148 F.2d 416. 219 Opinion of the Court. they permeated the entire structure of the industry in all its phases, intrastate and interstate. We deal here, as petitioners say, with an industry tightly interwoven from sale of the seed through all the intermediate stages to and including interstate sale and distribution of the sugar. In the middle of all these processes and dominating all of them stand the refiners. They control the supply and price of seed, the quantity sold and the volume of land planted, the processes of cultivation and harvesting, the quantity of beets purchased and rejected, the refining, and the distribution of sugar both interstate and local. Some of these controls have been built up by taking advantage of the opportunities afforded by the industry's unique character, both natural and in its general pattern and habits of organization; 20 others by utilizing the key positions these advantages give the refiners to put contractual restraints upon the growers by their separate actions; 21 and still greater ones by the refiners' ability, 20 The natural factors include the peculiar nature of the crop in its limitation to a single primary and commercially profitable use, the necessity for immediate and nearby marketing to follow directly upon harvesting, and the well-known fact that sugar beets are grown only in widely scattered regions specially adapted to the crop in soil, climate and availability of water in large quantities during the growing season. 21 Resulting in large part from the natural limitations stated in note 20 and the fact that extracting the sugar content from the beets is an elaborate and technical process, is the further important fact that the processing cannot be done by the growers individually or even in small cooperative groups, but requires specialized and largescale business organization, equipment and investment. All these factors and perhaps others combine to make the refining stage of the industry a specialized manufacturing one to be carried on separately from growing, to establish the refiners' key place in the entire industry, and thus to leave the growers completely at the refiners' mercy for the profitable production of beets except as the latter may compete among themselves. |