171 U.S. 604 (1898), 181, Anderson v. United States

Docket Nº:No. 181
Citation:171 U.S. 604, 19 S.Ct. 50, 43 L.Ed. 300
Party Name:Anderson v. United States
Case Date:October 24, 1898
Court:United States Supreme Court

Page 604

171 U.S. 604 (1898)

19 S.Ct. 50, 43 L.Ed. 300



United States

No. 181

United States Supreme Court

October 24, 1898

Argued February 25, 28, 1898




The Traders' Live. Stock Exchange was an unincorporated association in Kansas City whose members bore much the same relation to it, and through it carried on much the same business as that carried on by the members of the Kansas City Live Stock Exchange, considered and passed upon in Hopkins v. United States, just decided. The main difference was that the members of the Traders' Exchange, defendants in the present proceedings, were themselves purchasers of cattle on the market, while the defendants in the former case were commission merchants who sold cattle upon commission as a compensation for their service. The articles of association of the Traders' Exchange contained the following preamble:

We, the undersigned, for the purpose of organizing and maintaining a business exchange, not for pecuniary profit or gain, but to promote and protect all interests connected with the buying and selling of livestock at the Kansas City Stock Yards, and to cultivate courteous and manly conduct towards each other, and give dignity and responsibility to yard traders, have associated ourselves together under the name of Traders' Live Stock Exchange, and hereby agree each with the other that we will faithfully observe and be bound by the following rules and bylaws and such new rules, additions, or amendments as may from time to time be adopted in conformity with the provisions thereof from the date of organization.

The rules objected to in the bill in this case were the following:

Rule 10. This exchange will not recognize any yard trader unless he is a member of the Traders' Live Stock Exchange.

Rule 11.

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When there are two or more parties trading together as partners, they shall each and all of them be members of this exchange.

Rule 12. No member of this exchange shall employ any person to buy or sell cattle unless such person hold a certificate of membership in this exchange.

Rule 13. No member of this exchange shall be allowed to pay any order buyer or salesman any sum of money as a fee for buying cattle from or selling cattle to such party.


(1) That this Court is not called upon to decide whether the defendants are or are not engaged in interstate commerce, because if it be conceded they are so engaged, the agreement as evidenced by the bylaws is not one in restraint of that trade, nor is there any combination to monopolize or attempt to monopolize such trade within the meaning of the act.

(2) That, following the preceding case, in order to come within the provisions of the statute, the direct effect of an agreement or combination must be in restraint of that trade or commerce which is among the several states, or with foreign nations.

(8) That where the subject matter of the agreement does not directly relate to and act upon and embrace interstate commerce, and where the undisputed facts clearly show that the purpose of the agreement was not to regulate, obstruct, or restrain that commerce, but that it was entered into with the object of properly and fairly regulating the transaction of the business in which the parties to the agreement were engaged, such agreement will be upheld as not within the statute where it can be seen that the character and terms of the agreement are well calculated to attain the purpose for which it was formed, and where the effect of its formation and enforcement upon interstate trade or commerce is, in any event, but indirect and incidental, and not its purpose or object.

(4) That the rules are evidently of a character to enforce the purpose and object of the exchange as set forth in the preamble, and that for such purpose they are reasonable and fair, and that they can possibly affect interstate trade or commerce in but a remote way, and are not void as violations of the act of Congress.

[19 S.Ct. 50] This suit is somewhat similar to the Hopkins suit, just decided, and was brought by the United States against the defendants named, who were citizens and residents of the Western Division of the Western District of Missouri and members of a voluntary unincorporated association known and designated as the Traders' Live Stock Exchange, the suit being brought for the purpose of obtaining a decree dissolving the exchange and enjoining the members thereof from entering into or continuing any sort of combination to deprive any .people engaged in shipping, selling, buying and handling

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livestock (received from other states and from the territories, intended to be sold at the Kansas City market) of free access to the markets at Kansas City, and to the same facilities afforded by the Kansas City stockyards to defendants and their associate members of the Traders' Livestock Exchange.

The bill was filed under the direction of the Attorney General of the United States by the United States District Attorney for the Western District of Missouri. It alleged in substance that the exchange was governed by a board of eight directors who carried on the business thereof with the consent and approbation of the defendants, they personally being members of the exchange. It then made the same allegations in relation to the stockyards being partly in Kansas City, Kansas, and partly in Kansas, City, Missouri, that are contained in the bill in the Hopkins case, just decided, and also as to the sales of herds or droves of cattle which were at the time of the sale partly in one state and partly in another. It is further alleged that the Kansas City stockyards is a public market, and, next to the market at Chicago, in the State of Illinois, is the largest livestock market in the world, and vast numbers of cattle, hogs, and other livestock are received annually at the market, shipped from various states and from the territories, and are sold at the market to buyers who reside in other states and territories and who reship the stock; that the stock is shipped to the market under contracts by which the shipper is permitted to unload the stock at the Kansas City stockyards, rest, water, and feed the same, and is accorded the privilege of selling the stock on the Kansas City market if the prices prevailing at the time justify the sale, and many head of such stock are so sold; that, prior to the month of March, 1897, as alleged, the defendants herein were engaged as speculators at the Kansas City stockyards, and were buying upon the market, and reselling upon the same market, and reshipping to other markets in other states the cattle so received at the Kansas City stockyards; that all the livestock shipped to and received at these stockyards is consigned to commission merchants, who take charge of the stock when it is received, and who sell the same

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to packing houses located at Kansas City, Missouri, and Kansas City in the State of Kansas, and they sell large numbers of cattle to the defendants herein.

The bill then alleges that the defendants

have unlawfully entered into a contract, combination, and conspiracy in restraint of trade and commerce among the several states and with foreign nations, in this, to-wit, that they have unlawfully agreed, contracted, combined, and conspired to prevent all other persons than members of the Traders' Livestock Exchange, as aforesaid, from buying and selling cattle upon the Kansas City market at the Kansas City stockyards as aforesaid; that the commission firm, person, partnership, or corporation to whom said cattle are consigned at Kansas City as aforesaid [19 S.Ct. 51] is not permitted to and cannot sell or dispose of said cattle at the Kansas City market, as aforesaid, to any buyer or speculator at the Kansas City stockyards unless said buyer or speculator is a member of the Traders' Livestock Exchange, and these defendants, and each of them, unlawfully and oppressively refuses to purchase cattle, or in any manner negotiate or deal with or buy from any commission merchant who shall sell or purchase cattle, from any speculator at the said Kansas City stockyards who is not a member of the said Traders' Livestock Exchange; that, by and through the unlawful agreement, combination, and conspiracy of these defendants, the business and traffic in cattle at the said Kansas City stockyards is interfered with...

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