Northern Securities Company v. United States

• Decision Date: 14 March 1904
• Docket Number: No. 277,277
• Citation: 24 S.Ct. 436,193 U.S. 197,48 L.Ed. 679
• Parties: NORTHERN SECURITIES COMPANY et al., Appts. , v. UNITED STATES
• Court: U.S. Supreme Court

193 U.S. 197

24 S.Ct. 436

48 L.Ed. 679

NORTHERN SECURITIES COMPANY et al., Appts.,

v UNITED STATES.

No. 277.

Argued December 14, 15, 1903.

Decided March 14, 1904.

[Syllabus, Complaint, and Answer from pages 197-257 intentionally omitted]

Page 257

Mr. George B. Young argued the cause and filed a brief for appellant the Northern Securities Company:

[Argument of Counsel from Pages 257-265 intentionally omitted]

Page 265

The government is not entitled to maintain this proceeding, nor had the circuit court jurisdiction of it; for the conspiracy or combination charged in the petition and found by the circuit court, if it ever existed, had done all it was formed to do, and had come to an end, before the proceeding was instituted.

The only combination of which there is any evidence is a combination formed in aid of commerce, to liberate, protect, and enlarge, and not to restrain it, and which has liberated, protected, aided, and enlarged it, and has not restrained, and does not threaten to restrain it.

All the facts and circumstances are to be considered in order to determine the fundamental question whether the necessary effect of the combination is to restrain interstate commerce.

Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 245, 44 L. ed. 136, 149, 20 Sup. Ct. Rep. 96; Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 68, 22 L. ed. 315, 318.

The law of self-defense and protection applies to one's business as well as to one's person.

United States Chemical Co. v. Provident Chemical Co. 64 Fed. 946.

The combination here is analogous to the covenant of the seller of a business that he will not engage in it, which has been declared not to testrain trade.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 329, 41 L. ed. 1007, 1023, 17 Sup. Ct. Rep. 540.

If this combination is to be adjudged a combination and conspiracy in restraint of commerce, there is scarcely an agreement or contract among business men that cannot be said to have, indirectly or remotely, some bearing upon interstate commerce, and possibly to restrain it.

Hopkins v. United States, 171 U. S. 578, 600, 43 L. ed. 290, 299, 19 Sup. Ct. Rep. 40.

Congress did not attempt by the antitrust act to limit and restrict the rights of corporations created by the states, or of citizens of the states, in the acquisition or disposition of property, or to make criminal the acts of persons in the acquisition and control of property, which the states of their residence or creation sanctioned or permitted.

United States v. E. C. Knight Co. 156 U. S. 1, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249.

At common law a cessation or diminution of competition, springing from a unity of ownership,—as, where one competitor sold his business to another, or both sold out to a third person, etc., was never regarded as a restraint of trade; such cessation or diminution being incident to the union of property or business in one ownership, and not a restraint imposed by contract.

And so such purchases, or agreements to purchase, have never been held contracts in restraint of trade.

Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

The formation of corporations for business or manufacturing purposes has never been regarded as in the nature of a contract in restraint of trade or commerce. The same may be said of the contract of partnership.

United States v. Joint Traffic Asso. 171 U. S. 505, 567, 43 L. ed. 259, 286, 19 Sup. Ct. Rep. 25.

The only question is, Does the contract or combination itself, or do the things the parties contracted to do, restrain commerce? If they do, the parties are criminals, however good their motives. If they do not, the parties are innocent, however reprehensible their designs.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 341, 41 L. ed. 1007, 1027, 17 Sup. Ct. Rep. 540; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 234, 44 L. ed. 136, 145, 20 Sup. Ct. Rep. 96.

The power to suppress competition is not of itself suppression.

State v. Northern Securities Co. 123 Fed. 592.

The position of the government rests on a wholly erroneons view of the relations of the shareholders of a railway company to the commerce of the company, and of the power of a majority of the shareholders to restrain or otherwise control that commerce.

Hoyt v. Thompson, 19 N. Y. 207; Burrill v. Nahant Bank, 2 Met. 163, 35 Am. Dec. 395; Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U. S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194.

A monopoly of trade embraces two essential elements: (1) The acquisition of an exclusive right to or the exclusive control of the trade; and (2) the exclusion of all others from that right and control.

United States v. Trans-Missouri Freight Asso. 7 C. C. A. 15, 19 U. S. App. 36, 4 Inters. Com. Rep. 443, 58 Fed. 58.

An attempt to monopolize any part of the trade or commerce among the states must be an attempt to secure or acquire an exclusive right to such trade or commerce by means which prevent or restrain others from engaging therein.

Re Greene, 52 Fed. 104.

Monopolies are liable to be oppressive, and hence are deemed to be hostile to the public good. But combinations for a mutual advantage, which do not amount to a monopoly, but leave the fleld open to others, are within neither the reason nor the operation of the rule.

Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

The anti-trust act and the regulative power of Congress under the commerce clause of the Constitution are alike strictly confined to matters which directly and immediately affect interstate or foreign commerce.

United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; United States v. Trans-Missouri Freight Asso. 166 U. S. 291, 41 L. ed. 1011, 17 Sup. Ct. Rep. 540; United States v. Joint Traffio Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Hopkins v. United States, 171 U. S. 578, 594, 43 L. ed. 290, 296, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U. S. 604, 43 L. ed. 300, 19 Sup. Ct. Rep. 50; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

A state may not tax railway earnings from transportation as such, for that is taxing the commerce, and is a direct regulation of it.

Fargo v. Michigan, 121 U. S. 230, 30 L. ed. 888, 1 Inters. Com. Rep. 51, 7 Sup. Ct. Rep. 857; Philadelphia & S. Mail S. S. Co. v. Pennsylvania, 122 U. S. 326, 338, 30 L. ed. 1200, 1202, 1 Inters. Com. Rep. 308, 7 Sup. Ct. Rep. 1118.

But it may tax the tolls received by a local railroad company for the use of part of its road by another company engaged in interstate commerce; for this is a tax on property, and not on commerce. Any increase of rates by the carrying company, consequent on a raising of the tolls because of the tax, is 'too remote and indirect' to make the act a regulation of commerce.

New York, L. E. & W. R. Co. v. Pennsylvania, 158 U. S. 431, 39 L. ed. 1043, 15 Sup. Ct. Rep. 896.

A state may tax the franchise of a foreign corporation upon a valuation measured by gross receipts from interstate and foreign as well as domestic commerce. This is not a direct regulation; the tax is not laid on the commerce itself.

Maine v. Grand Trunk R. Co. 142 U. S. 217, 35 L. ed. 994, 3 Inters. Com. Rep. 807, 12 Sup. Ct. Rep. 121, 163.

A law imposing a privilege tax of $50 on every sleeping car running over the railroads of the state is void as to cars used in interstate transportation, for it is a direct regulation of commerce.

Pickard v. Pullman Southern Car Co. 117 U. S. 34, 29 L. ed. 785, 6 Sup. Ct. Rep. 635.

But the state may tax the same cars, not because used in commerce, but because within the state, as property in the state; and the tax may take the form of a tax on the company's capital. Here the tax is laid directly on the property of the company,—its cars,—and not on the use of the cars in interstate commerce; and if it regulates such commerce at all, it does so indirectly.

Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 25, 35 L. ed. 613, 617, 3 Inters. Com. Rep. 595, 11 Sup. Ct. Rep. 876.

A state may not tax United States bonds as such. It may not tax an individual or corporation on the value of the bonds held by him, for this would be to tax the bonds directly. But shares in a national bank are taxable by a state at their full value, like other property, no matter how much of the bank's capital is invested in United States bonds. Such tax does not fall directly on the bonds.

Van Allen v. The Assessors, 3 Wall. 575, 18 L. ed. 229.

If the power to regulate interstate commerce applied to all the incidents to which said commerce might give rise, and to all contracts which might be made in the course of its transaction, that power would embrace the entire sphere of mercantile activity in any way connected with trade between the states, and would exclude state control over many contracts purely domestic in their nature.

Hooper v. California, 155 U. S. 648, 655, 39 L. ed. 297, 300, 5 Inters. Com. Rep. 610, 15 Sup. Ct. Rep. 207; Williams v. Fears, 179 U. S. 270, 278, 45 L. ed. 186, 190, 21 Sup. Ct. Rep. 128.

A complete bar to the government's attempted encroachment on the rights of the states and their citizens is found in Pearsall v. Great Northern R. Co. 161 U. S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705, and Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. ed. 849, 16 Sup. Ct. Rep. 714.

Congress, when passing the act, knew that the railway system of the country rested on consolidations, actual or virtual, authorized by state laws, some of them having existed many years.

Chesapeake & P. Teleph. Co. v. Manning, 186 U. S. 238, 245, 46 L. ed. 1144, 22 Sup. Ct. Rep. 881.

These are also matters within the judicial knowledge of the court.

Ohio L. Ins. & T. Co. v. Debolt, 16 How. 416, 435, 14 L. ed...