United States v. Sisal Sales Corporation

Decision Date16 May 1927
Docket NumberNo. 200,200
Citation71 L.Ed. 1042,274 U.S. 268,47 S.Ct. 592
PartiesUNITED STATES v. SISAL SALES CORPORATION et al
CourtU.S. Supreme Court

The Attorney General and Mr. William J. Donovan, Asst. Atty. Gen., for the United States.

Mr. W. W. Aldrich, of New York City, for appellees Sisal Sales Corporation and others.

[Argument of Counsel from pages 268-270 intentionally omitted] Mr. Harold R. Medina, of New York City, for appellees Hanson & Orth and others.

[Argument of Counsel from page 270 intentionally omitted] Mr. Justice McREYNOLDS delivered the opinion of the Court.

The United States seek an injunction to prevent appellees from taking further action in pursuance of a contract, combination or conspiracy said to be forbidden by the Sherman Anti-Trust Act and the Wilson Tariff Act as amended (chapter 647, 26 Stat. 209, chapter 349, 28 Stat. 509, 570, and chapter 40, 37 Stat. 667 (Comp. St. § 8820 et seq.)). The trial court regarded American Banana Co. v. United Fruit Co., 213 U. S. 347, 29 S. Ct. 511, 53 L. Ed. 826, 16 Ann. Cas. 1047, as controlling, held that no cause of action had been alleged, and dismissed the bill upon motion.

The bill is confused, difficult to follow, and an excellent example of bad pleading. An order should direct that it be recast and conformed to the established rules. Courts ought not to be burdened by rambling and obscure statements. Nevertheless we think enough is alleged to indicate a meritorious cause and to require reversal of the judgment below.

Appellees are three banking corporations doing business at New York and New Orleans, two Delaware corporations-the Eric and the Sisal Sales-organized to deal in sisal, a Mexican corporation-Comision Exportadora de Yucatan-which buys sisal from the producers certain officers and agents of the foregoing corporations, and members of Hanson & Orth, brokers.

Sisal is the fiber of the henequen plant, a native of Mexico, and from it is fabricated more than 80 per centum of the binder twine used for harvesting our grain crops. The annual requirements of the United States are from 250,000,000 to 300,000,000 pounds. During one year 1,000,000 bales-375 pounds each-were imported. Adequate quantities can be obtained only from Yucatan. The plant is extensively cultivated there, and the supply has often exceeded market demands. Prices paid to producers have varied from less than 4 to 7 or 8 cents per pound.

Prior to 1919 appellee banks advanced large sums to parties endeavoring to monopolize importation and sale of sisal in the United States. The Mexican corporation, Comision Reguladora del Mercado de Henequen, was utilized as an important instrumentality for making necessary purchases and legislation favorable to it was secured. For a time the scheme succeeded; then came collapse. Through foreclosure of liens held to secure their loans (several million dollars) appellee banks acquired 400,000 bales of fiber stored in this country. About that time, through change of laws, the Yucatan markets were again opened; competition became active and prices declined.

Thereupon appellee banks, acting jointly and within the United States, entered into and undertook to make effective another and somewhat different combination or scheme to control the sisal market, with the ultimate purpose of selling their holdings, recouping losses, and securing large gains. Later the other defendants became parties thereto.

As the direct outcome of this unlawful combination, conspiracy, and accompanying contracts, it is alleged— Appellees have secured a monopoly of interstate and foreign commerce in sisal. The Comision Exportadora de Yucatan has become sole purchaser of sisal from producers, and the Sisal Sales Corporation sole importer into the United States. There is no longer any competition in the trade; excessive prices are arbitrarily fixed. The sisal acquired by the banks during 1919 has been sold; undue profits and commissions have been and are demanded; the conspirators have realized great sums at the expense of our manufacturers and farmers.

All steps necessary to bring about the above-stated results have been deliberately taken by appellees. Some of them are stated below.

The Eric Corporation, organized in August, 1919, and owned and financed by the banks, took over the large stocks of sisal acquired by them through foreclosure, also 250,000 bales accumulated in Yucatan. Laws favorable to it were solicited and secured from the governments of Mexico and Yucatan. Under them, and by the use of large sums supplied by the banks, that corporation and its agents soon became everywhere the dominant factors in the sisal trade. Prior to January, 1921, the Mexican corporation, Comision Reguladora del Mercado de Henequen, was the agency for buying and selling sisal in that country; but about that time its business collapsed. Thereupon, the Comision Monetaria was organized under the same laws, furnished with large sums of money. and utilized for such purposes. The governments of both Mexico and Yucatan were persuaded to pass discriminatory legislation and all other buyers were forced out of the markets. But because of the great supply of fiber this plan also proved unsuccessful and the Eric Corporation was obliged to increase its large holdings.

Later, by procurement of the banks, the Sisal Sales Company was organized to deal in sisal and Hanson &amp Orth became its managers. It took title to the sisal held by the Eric Corporation. The old Comision Reguladora del Mercado de Henequen was revived as the Comision Exportadora de Yucatan, and again became the active agent for buying and selling in Mexico. Laws were solicited and passed which gave...

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    ...Carbide & Carbon Corp., 370 U.S. 690, 704-05, 82 S.Ct. 1404, 1413-1414, 8 L.Ed.2d 777 (1962). See United States v. Sisal Sales Corp., 274 U.S. 268, 47 S.Ct. 592, 71 L.Ed. 1042 (1927).185 See United States v. Hensel, 699 F.2d 18 (1st Cir.), cert. denied, --- U.S. ----, 103 S.Ct. 2431, 77 L.E......
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