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contracts or agreements or combinations which operated to the prejudice of the public interests by unduly restricting competition or unduly obstructing the due course of trade or which, either because of their inherent nature or effect or because of the evident purpose of the acts, etc., injuriously restrained trade, that the words as used in the statute were designed to have and did have but a like significance. It was therefore pointed out that the statute did not forbid or restrain the power to make normal and usual contracts to further trade by resorting to all normal methods, whether by agreement or otherwise, to accomplish such purpose. In other words, it was held, not that acts which the statute prohibited could be removed from the control of its prohibitions by a finding that they were reasonable, but that the duty to interpret which inevitably arose from the general character of the term restraint of trade required that the words restraint of trade should be given a meaning which would not destroy the individual right to contract and render difficult if not impossible any movement of trade in the channels of interstate commerce the free movement of which it was the purpose of the statute to protect. The soundness of the rule that the statute should receive a reasonable construction, after further mature deliberation, we see no reason to doubt.

In this excerpt attention is called especially to the statement that "it was held, not that acts which the statute prohibited could be removed from the control of its prohibitions by finding that they were reasonable," but that the duty to interpret these general terms required that a reasonable construction should be given them.

Justice Harlan concurred with the court in the judgment rendered, but dissented with respect to certain matters connected with the decree, and particularly with respect to the interpretation of the term "restraint of trade" in the Sherman Act. He said in part (p. 192):

By every conceivable form of expression, the majority, in the Trans-Missouri and Joint Traffic cases, adjudged that the act of Congress did not allow restraint of interstate trade to any extent or in any form, and three times it expressly rejected the theory, which had been persistently advanced that the act should be construed as if it had in it the word "unreasonable" or "undue." But now the court, in accordance with what it denominates the "rule of reason," in effect inserts in the act the word "undue," which means the same as "unreasonable," and thereby makes Congress say what it did not say, what, as I think, it plainly did not intend to say and what, since the passage of the act, it has explicitly refused to say. It has steadily refused to amend the act so as to tolerate a restraint of interstate commerce even where such restraint could be said to be "reasonable” or “due." In short, the court now, by judicial legislation, in effect amends an act of Congress relating to a subject over which that department of the Government has exclusive cognizance. *

Section 8. Monopolize and attempt to monopolize.

The decisions under the Sherman Act which have depended on the application of section 2 of the law have been comparatively infrequent, at least in the Supreme Court, and in those decisions the instances where a clear statement appears of the meaning of the words "monopolize" and "attempt to monopolize" are rare. This is partly because in such cases the court has often been confronted with a complicated state of facts embracing a series of devel

The court - that the combination was an attempt to monopolize and a monopolization of the tobarro trade, contrary to the Sherman Art, and said in part (pp. 181-180):

Condering then the undisputed facts which we have previously stated, it remains only to determine whether they estacion that the acts, entrants, agreements, combinations, etc. This were sealed were, & such an unusual and wring a character as to bring them within the prohibits me of the law. That they were, in our opinion, 9 overwhelmingly results from the molly red facts that it seems - aly nemessary to refer to the facts as we have stated them to dem parare the correctness of this eɑclusion. Indeed, the hit ry of the io mobilation is so replete with the d ́ing of acts which it was the obvious purpose file statues I still so demonstrative of the existence from the beginning fa purpose to a quite di minden and satt i of the tobacco trade, not by the mere exertion of the ordinary right to contract and to trade, but by methods devised in order to monopolize the trade by driving o apetitors out of businew, which were ruthlessly carried out upon the asumpton that to work upon the fears or play upon the cupidity of competitors wald make surves possible. We say these conclusions are inevitable, not because of the vast amount of property aggregated by the combination, not because alone of the many erp rations which the proof shows were united by resort tone device or another. Again, not alone because of the dominion and control over the tobacco trade which actually exists, but because we think the conclusion of wr ngful purpose and illegal combination is overwhelmingly established by the following considerati »›ust

(a) By the fact that the very first organization or combination was impelled by a previously existing fierce trade war, evidently inspired by one or more of the minds which brought about and became parties to that combination.

(b) Because, immediately after that embination and the increase of capital which followed, the acts which ensued justify the inference that the intention existed to use the power of the combination as a vantage ground to further monopolize the trade in tobacco by means of trade conflicts designed to injure thers, either by driving competitors out of the business or compelling them to become parties to a combination— a purpose whose execution was illustrated by the plug war which ensued and its results, by the snuff war which followed and its results, and by the conflict which immediately followed the entry of the combination in England and the division of the world's business by the two foreign contracts which ensued.

(6) By the ever-present manifestation which is exhibited of a conscious wrongdoing by the form in which the various transactions were embodied from the beginning, ever changing but ever in substance the same. Now the organization of a new company, now the control exerted by the taking of stock in one or another or in several, so as to obscure the result actually attained, nevertheless uniform, in their manifestations of the purpose to restrain others and to monopolize and retain power in the hands of the few who, it would seem, from the beginning contemplated the mastery of the trade which practically followed.

(d) By the gradual absorption of control over all the elements essential to the successful manufacture of tobacco products, and placing such control in the hands of Reemingly independent corporations serving as perpetual barriers to the entry of others into the tobacco trade.

(c) By persistent expenditure of millions upon millions of dollars in buying out plants, not for the purpose of utilizing them, but in order to close them up and render them less for the purposes of trade.

(f) By the constantly recurring stipulations, whose legality, isolatedly viewed, we aro not considering, by which numbers of persons, whether manufacturers, stockholders or employees, were required to bind themselves, generally for long periods, not to compete in the future. Indeed, when the results of the undisputed proof which

we have stated are fully apprehended, and the wrongful acts which they exhibit are considered, there comes inevitably to the mind the conviction that it was the danger which it was deemed would arise to individual liberty and the public well-being from acts like those which this record exhibits, which led the legislative mind to conceive and to enact the Antitrust Act, considerations which also serve to clearly demonstrate that the combination here assailed is within the law as to leave no doubt that it is our plain duty to apply its prohibitions.

Considering the form of remedy and the difficulties attendant thereon, the court said with reference to the extensive merger of ownership (pp. 185-186):

Because in this case it is obvious that a mere decree forbidding stock ownership by one part of the combination in another part or entity thereof, would afford no adequate measure of relief, since different ingredients of the combination would remain unaffected, and by the very nature and character of their organization would be able to continue the wrongful situation which it is our duty to destroy.

In connection with this decision it should be pointed out that the form of dissolution which was finally accepted by the court provided for an extensive splitting up into companies, specially created for this purpose, not only of the American Tobacco Co. but also of some of the chief subsidiary companies, such as the snuff company and the licorice company. (See pp. 18-21.) In other words, where a merger of property and business had been accomplished, the court provided that it should be divided among several independent companies in order to reestablish conditions in harmony with the law.

UNITED STATES v. E. I. DU PONT DE NEMOURS & Co. (188 Fed., 127), CIRCUIT COURT, 1911.-The United States brought suit to procure the dissolution of a combination of powder manufacturers. The facts and the decision in this case are shown in the following excerpt from the opinion of the court (pp. 151-152):

The record of the case now before us shows that from 1872 to 1902, a period of 30 years, the purpose of the trade associations had been to dominate the powder and explosives trade in the United States, by fixing prices, not according to any law of supply and demand, for they arbitrarily limited the output of each member, but according to the will of their managers. It appears, further, that although these associations were not always strong enough to control absolutely the prices of explosives, their purpose to do so was never abandoned. Under the last of the trade association agreements— the one dated July 1, 1896, and which was in force until June 30, 1904–the control of the combination was firmer than it had before been. Succeeding the death of Eugene du Pont in January, 1902, and the advent of Thomas Coleman du Pont and Pierre S. du Pont, the attempt was made to continue the restraint upon interstate commerce and the monopoly then existing by vesting, in a few corporations, the title to the assets of all the corporations affiliated with the trade association, then dissolving the corporations whose assets had been so acquired, and binding the few corporations owning the operating plants in one holding company, which should be able to prescribe policies and control the business of all the subsidiaries without the uncertainties attendant upon a combination in the nature of a trade association. That attempt resulted in complete success.

Much the larger part of the trade in black and smokeless powder and dynamite in the United States is now under the control of the combination supported by the

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Section 15. Holding companies.

The holding company as a device for combining competitive interests succeeded to the "trust" form of organization, as already described in Chapter I. (See pp. 8-9.) 'The holding company in its pure form is one which simply owns the stocks of the companies. whose property and business are under its control. Most holding companies, however, own and operate directly a part of the property and business under their control. A few years after the enactment. of the Sherman Law it became one of the principal methods of combining competitors. No authoritative decision by the Supreme Court was made with regard to its legality until the Northern Securities case was decided in 1904.

NORTHERN SECURITIES Co. v. UNITED STATES (193 U. S., 197), SUPREME COURT, 1904.-The facts in this case are more fully stated on page 73. More briefly they were as follows: Stockholders in two parallel and competing interstate railroads organized the Northern Securities Co. to acquire and hold the shares of the said railroads, and in consequence most of the shares of the said two railroad companies were so acquired. Most of the shareholders of the railroad companies exchanged their shares for shares of the Northern Securities Co. on an agreed basis. The Government brought suit to prevent the Northern Securities Co. from voting such shares, and to compel it to reexchange them for its own shares, etc.; also to enjoin the carrying out of the scheme of combination. The court held that this combination in the form of a holding company was in restraint of interstate commerce and contrary to the Sherman Act.

Justice Harlan, speaking for himself and three other justices, said in part (p. 338):

But even if the State allowed consolidation it would not follow that the stockholders of two or more State railroad corporations, having competing lines and engaged in interstate commerce, could lawfully combine and form a distinct corporation to hold the stock of the constituent corporations, and, by destroying competition between them, in violation of the act of Congress, restrain commerce among the States and with foreign nations.

Justice Brewer in his concurring opinion said in part (p. 362):

There was a combination by several individuals separately owning stock in two competing railroad companies to place the control of both in a single corporation. The purpose to combine and by combination destroy competition existed before the organization of the corporation, the Securities Company * *. A corporation, while by fiction of law recognized for some purposes as a person and for purposes of jurisdiction as a citizen, is not endowed with the inalienable rights of a natural person. It is an artificial person, created and existing only for the convenient transaction of business. In this case it was a mere instrumentality by which separate railroad properties were combined under one control. That combination is as direct a restraint of trade by destroying competition as the appointment of a committee to regulate rates.

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