United States v. Armour & Co.

• Decision Date: 21 March 1906
• Court: U.S. District Court — Northern District of Illinois
• Parties: UNITED STATES v. ARMOUR & CO. et al.

142 F. 808

UNITED STATES v. ARMOUR & CO. et al.

United States District Court, N.D. Illinois.

March 21, 1906

William H. Moody, Atty. Gen., and Charles B. Morrison, U.S. Atty and Asst. U.S. Attys. Hanchett and Godman.

John S Miller and A. R. Urion, for defendants Armour & Co., Armour Packing Co., J. Ogden Armour, Patrick A. Valentine, Arthur Meeker, Thomas J. Connors, Samuel McRoberts, and Charles W Armour.

On the 1st day of July, 1905, an indictment was returned by the grant jury of the Northern division of the Northern district of Illinois against the defendants charging them with conspiring in restraint of trade and commerce among the states and with foreign nations, and with an attempt to monopolize such trade and commerce, in violation of the Sherman anti-trust act. Pleas in abatement were filed attacking the organization of the grand jury, and the procedure in general, from the time the grand jury was impaneled until it returned the indictment. A demurrer was interposed to these pleas, and on argument was sustained as to all of them. A demurrer was then interposed to the indictment itself, and after full argument it was overruled as to the conspiracy counts and sustained as to the counts charging monopoly. Later, on the 23d day of October, 1905, special pleas in bar were filed, setting up that by virtue of a resolution of the House of Representatives, adopted March 7, 1904, and known as the 'Martin Resolution,' and also by virtue of the law creating the Bureau of Corporations, James R. Garfield, Commissioner of Corporations, had made an investigation into the business of the defendants and into the matters and things alleged in the indictment, and that the defendants upon the lawful requirement of the Commissioner of Corporations had furnished evidence, documentary and otherwise, of and concerning the matters charged in the indictment. The pleas are numerous, and are varied in form, but the above is the substance of them. Replications were filed by the United States, traversing the averments of the pleas. A jury was impaneled, and the taking of testimony was commenced on the 29th day of January, 1906.

The resolution of the House of Representatives was as follows: 'Resolved, that the Secretary of Commerce and Labor be, and he is hereby, requested to investigate the causes of the low prices of beef cattle and the selling prices of fresh beef, and whether the said conditions have resulted in whole or in part by any corporation, joint stock company, or corporate combination engaged in commerce among the several states or with foreign nations; and if so, to investigate the organization, capitalization, profits, conduct, and management of the business of such corporations, companies, and corporate combinations, and to make early report of his findings according to law. ' For the act establishing the Department of Commerce and Labor, passed February 14, 1903, see U.S. Comp. St. Supp. 1905, p. 63 (32 stat. 379 (U.S. Comp. St. 1901, p. 3154); Act March 2, 1889, c. 382, 25 Stat. 861 (U.S. Comp. St. 1901, p. 3168)). For the act in relation to testimony, etc., being an act supplemental to the interstate commerce acts, passed February 11, 1893, see Fed. St. Ann. vol. 3, p. 855 (27 Stat.L. 443, c. 83 (U.S. Comp. St. 1901, p. 3173)). For the Sherman anti-trust act, being the act under which the indictment was returned, passed July 2, 1890, see Fed. St. Ann. vol. 7, p. 336 (26 Stat. 209, c. 647 (U.S. Comp. St. 1901, p. 3200)). For the act appropriating $500,000 for enforcement of the anti-trust and interstate commerce laws, etc., passed February 25, 1903, see 32 Stat. 904 (U.S. Comp. St. Supp. 1905, p. 602).

The resolution of the House of Representatives, set forth above, which is known as the 'Martin Resolution,' was passed March 7, 1904. Its passage, and the terms thereof, and the fact that the Commissioner of Corporations, Mr. James R. Garfield, was going to Chicago to make the investigation of their business thereby called for, were known to defendants from the public press. Their respective counsel thereupon investigated the law as to the powers and authority of the Commissioner of Corporations, under section 6 of the act creating that bureau (Act Feb. 14, 1903, c. 552, 32 Stat. 827 (U.S. Comp. St. Supp. 1905, p. 68)), to make such investigation and to compel the defendants for the purpose thereof, and advised defendants with respect thereto. Afterwards, on April 13, 1904, the Commissioner of Corporations arrived in Chicago for that purpose. He called upon Charles G. Dawes, president of the Central Trust Company of Chicago, and told him he had come to Chicago to meet representatives of the packers and discuss with them this investigation, and stated his purpose in coming to Chicago to meet the representatives of the packing industries, and asked Mr. Dawes if he would introduce him to certain of the defendant packers and bring them together. He also called upon James H. Eckels, president of the Commercial National Bank of Chicago, and made a similar request. Accordingly Mr. Dawes arranged, and the Commissioner on that day had, an interview with Louis C. Krauthoff, general counsel of the Armour companies, who was authorized by his clients to meet the Commissioner, at which interview Mr. McRoberts, assistant treasurer of the Armour companies, and Mr. Dawes, were present; and Mr. Eckels in like manner arranged, and the Commissioner later on the same day held, separate meetings and interviews with Edward Swift, vice president of Swift & Co., with Edward Morris, vice president of the Fairbank Canning Company, and with Jesse P. Lyman, president of the National Packing Company.

At these interviews Mr. Garfield informed the defendants and their representatives whom he met that he was engaged in making this investigation as Commissioner of Corporations. He called to their attention the law creating his bureau and the powers thereby vested in him, and the Martin resolution of the House of Representatives, and informed them that he had come to Chicago to get from the defendants the information possessed by them, and access to their books and records, and called upon them to give him and his authorized agents such information and access. The Commissioner testified, as a witness for the government, that he had substantially the same interview with each of these persons; and interviews with Mr. Swift, Mr. Morris, and Mr. Lyman, being, however, briefer than that with Mr. Krauthoff.

The substance of the interviews on April 13, 1904, was stated by the United States Attorney in his argument to the court upon these motions, as follows: 'The Commissioner secured an introduction to them through their banker and through their mutual friend, Mr. Dawes and Mr. Eckels. He took the matter up with them as a business proposition, and said to them: 'I have come here now as Commissioner, and I wish to make an investigation, and I want you to co-operate with me. I want you to turn over this evidence. You know what my powers are, what my duties are. You know all about it.' ' Yes,' Mr. Krauthoff says, 'we are thoroughly posted on that.' He took or started to take the law from his pocket and hand it to them. Mr. Krauthoff says: 'We understand all about the law. * * * We know exactly what our rights are and we know what your rights are. * * * You need not discuss that Mr. Garfield. * * * Let us know what you want here.' Mr. garfield said to him, and to the other gentlemen: 'I want to make an investigation. That means that I must go to your books and papers and find out what you have, and in order to make it thorough I must verify what is given to me by the books themselves.' He called for a complete investigation and examination of their affairs.'

In these interviews, Mr. Garfield called their attention to the Martin resolution calling for the investigation, as well as to the act of Congress creating his bureau and the powers thereby conferred upon him, and produced the law, intending thereby to show what the powers of the bureau were, but was informed that the defendants were aware of the provisions of the law. He stated in the interview that by this Martin resolution the House of Representatives had indicated certain specific lines of inquiry that it desired made, and in connection with the general investigation he was taking up the Martin resolution in detail; and he stated that without the information to be obtained from the defendants and from their books and records his report would be incomplete. He stated that detective methods would not be used, but said he came and would come directly to headquarters for such information as he wished, and for that purpose had met these men. Mr. Krauthoff stated to him that the Department of Justice of the government had obtained an injunction against the defendant packers, enjoining them from violation of the Sherman anti-trust act; and Mr. Garfield testified that he stated in that connection that his department and bureau were not connected with the Department of Justice; that each department was operating separately, and that the work of the Bureau of Corporations was within its own department that he was not acting with or for the Department of Justice. He testified that he stated practically to the effect that the purpose of Congress in creating his department was not to disclose violations of law or to investigate prosecutions, or to act in connection with any other department of the government, but was for the purpose of developing facts, so that they might be reported to the President, and by him to Congress, for legislative purposes. Mr. Garfield testified that, in stating to Mr. Krauthoff that his department had no connection or co-operation with the Department of Justice, his impression was that that...