196 U.S. 375 (1905), 103, Swift and Company v. United States

Docket Nº:No. 103
Citation:196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518
Party Name:Swift and Company v. United States
Case Date:January 30, 1905
Court:United States Supreme Court
 
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Page 375

196 U.S. 375 (1905)

25 S.Ct. 276, 49 L.Ed. 518

Swift and Company

v.

United States

No. 103

United States Supreme Court

January 30, 1905

Argued January 6, 7, 1905

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES

FOR THE NORTHERN DISTRICT OF ILLINOIS

Syllabus

A combination of a dominant proportion of the dealers in fresh meat through out the United States not to bid against, or only in conjunction with, each other in order to regulate prices in and induce shipments to the livestock markets in other States, to restrict shipments, establish uniform rules of credit, make uniform and improper rules of cartage, and to get less than lawful rates from railroads to the exclusion of competitors with intent to monopolize commerce among the States is an illegal combination within the meaning and prohibition of the act of July 2, 1890, 26 Stat. 209, and can be restrained and enjoined in an action by the United States.

It does not matter that a combination of this nature embraces restraint and monopoly of trade within a single State if it also embraces and is directed against commerce among the States. Moreover, the effect of such a combination upon interstate commerce is direct, and not accidental, secondary, or remote, as in United Slates v. E. C. Knight Co., 156 U.S. 1.

Even if the separate elements of such a scheme are lawful, when they are bound together by a common intent as parts of an unlawful scheme to monopolize interstate commerce, the plan may make the parts unlawful.

When cattle are sent for sale from a place in one State, with the expectation

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they will end their transit, after purchase, in another State, and when, in effect, they do so with only the interruption necessary to find a purchaser at the stockyards, and when this is a constantly recurring course, it constitutes interstate commerce, and the purchase of the cattle is an incident of such commerce.

A bill in equity, and the demurrer thereto, are neither of them to be read and construed strictly as an indictment, but are to be taken to mean what they fairly convey to a dispassionate reader by a fairly exact use of English speech.

The facts are stated in the opinion.

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HOLMES, J., lead opinion

MR. JUSTICE HOLMES delivered the opinion of the court.

This is an appeal from a decree of the Circuit Court, on demurrer, granting an injunction against the appellants' commission of alleged violations of the act of July 2, 1890, c. 647, 26 Stat. 209, "to protect trade and commerce against unlawful restraints and monopolies." It will be necessary to consider both the bill and the decree. The bill is brought against a number of corporations, firms and individuals of different States, and makes the following allegations: 1. The defendants

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(appellants) are engaged in the business of buying livestock at the stockyards in Chicago, Omaha, St. Joseph, Kansas City, East St. Louis, and St. Paul, and slaughtering such livestock at their respective plants in places named, in different States, and converting the livestock into fresh meat for human consumption. 2. The defendants

are also engaged in the business of selling such fresh meats, at the several places where they are so prepared, to dealers and consumers in divers States and Territories of the said United States other than those wherein the said meats are so prepared and sold as aforesaid, and in the District of Columbia, and in foreign countries, and shipping the same meats, when so sold from the said places of their preparation, over the several lines of transportation of the several railroad companies serving the same as common carriers, to such dealers and consumers, pursuant to such sales.

3. The defendants also are engaged in the business of shipping such fresh meats to their respective agents at the principal markets in other States, etc., for sale by those agents in those markets to dealers and consumers. 4. The defendants together control about six-tenths of the whole trade and commerce in fresh meats among the States, Territories and District of Columbia, and, 5, but for the acts charged, would be in free competition with one another.

6. In order to restrain competition among themselves as to the purchase of livestock, defendants have engaged in, and intend to continue, a combination for requiring and do and will require their respective purchasing agents at the stockyards mentioned, where defendants buy their livestock (the same being stock produced and owned principally in other States and shipped to the yards for sale) to refrain from bidding against each other, "except perfunctorily and without good faith," and by this means compelling the owners of such stock to sell at less prices than they would receive if the bidding really was competitive.

7. For the same purposes, the defendants combine to bid up, through their agents, the prices of livestock for a few days at

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a time, "so that the market reports will show prices much higher than the state of the trade will warrant," thereby inducing stock owners in other States to make large shipments to the stockyards, to their disadvantage.

8. For the same purposes, and to monopolize the commerce protected by the statute, the defendants combine "to arbitrarily, from time to time raise, lower, and fix prices, and to maintain uniform prices at which they will sell" to dealers throughout the States. This is effected by secret periodical meetings, where are fixed prices to be enforced until changed at a subsequent meeting. The prices are maintained directly, and by collusively restricting the meat shipped by the defendants, whenever conducive to the result, by imposing penalties for deviations, by establishing a uniform rule for the giving of credit to dealers, etc., and by notifying one another of the delinquencies of such dealers and keeping a black list of delinquents, and refusing to sell meats to them.

9. The defendants also combine to make uniform charges for cartage for the delivery of meats sold to dealers and consumers in the markets throughout the States, etc., shipped to them by the defendants through the defendants' agents at the markets, when no charges would have been made but for the combination.

10. Intending to monopolize the said commerce and to prevent competition therein, the defendants "have all and each engaged in and will continue" arrangements with the railroads whereby the defendants received, by means of rebates and other devices, rates less than the lawful rates for transportation, and were exclusively to enjoy and share this unlawful advantage to the exclusion of competition and the public. By force of the consequent inability of competitors to engage or continue in such commerce, the defendants are attempting to monopolize, have monopolized, and will monopolize the commerce in livestock and fresh meats among the States and Territories, and [25 S.Ct. 278] with foreign countries, and, 11, the defendants are and have been in conspiracy with each other, with

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the railroad companies and others unknown, to obtain a monopoly of the supply and distribution of fresh meats throughout the United States, etc. And, to that end, defendants artificially restrain the commerce and put arbitrary regulations in force affecting the same from the shipment of the livestock from the plains to the final distribution of the meats to the consumers. There is a prayer for an injunction of the most comprehensive sort against all the foregoing proceedings and others, for discovery of books and papers relating directly or indirectly to the purchase or shipment of livestock, and the sale or shipment of fresh meat, and for an answer under oath. The injunction issued is appended in a note. *

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To sum up the bill more shortly, it charges a combination of a dominant proportion of the dealers in fresh meat throughout the United States not to bid against each other in the livestock markets of the different States, to bid up prices for a few days in order to induce the cattle men to send their stock to the stockyards, to fix prices at which they will sell, and to that end to restrict shipments of meat when necessary, to establish a uniform rule of credit to dealers and to keep a blacklist, to make uniform and improper charges for cartage, and finally, to get less than lawful rates from the railroads to the exclusion of competitors. It is true that the last charge is not clearly stated to be a part of the combination. But, as it is alleged that the defendants have each and all made arrangements with the railroads, that they were exclusively to enjoy the unlawful advantage, and that their intent in what they did was to monopolize the commerce and to prevent competition, and in view of the general allegation to which we

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shall refer, we think that we have stated correctly the purport of the bill. It will be noticed further that the intent to monopolize is alleged for the first time in the eighth section of the bill as to raising, lowering and fixing prices. In the earlier sections, the intent alleged is to restrain competition among themselves. But after all the specific charges, [25 S.Ct. 279] there is a general allegation that the defendants are conspiring with one another, the railroads and others, to monopolize the supply and distribution of fresh meats throughout the United States, etc., as has been stated above, and it seems to us that this general allegation of intent colors and applies to all the specific charges of the bill. Whatever may be thought concerning the proper construction of the statute, a bill in equity is not to be read and construed as an indictment would have been read and construed a hundred years ago, but it is to be taken to mean what it fairly conveys to a dispassionate reader by a fairly exact use of English speech. Thus, read, this bill seems to us intended to allege successive elements of a single...

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