United States of America v. Gesellschaft No 289 Gesellschaft v. United States of America No 332

Decision Date10 January 1916
Docket NumberPACKETFAHRT-ACTIEN,Nos. 289 and 332,HAMBURG-AMERIKANISCHE,s. 289 and 332
Citation36 S.Ct. 212,60 L.Ed. 387,239 U.S. 466
PartiesUNITED STATES OF AMERICA, Appt., v. GESELLSCHAFT et al. NO 289.GESELLSCHAFT et al., Appts., v. UNITED STATES OF AMERICA. NO 332
CourtU.S. Supreme Court

Assistant to the Attorney General G. Carroll Todd and Special Assistant to the Attorney General Thurlow M. Gordon for the United States.

Messrs. Charles P. Spooner, John C. Spooner, and James L. Bishop for the Hamburg-American Steamship Company et al.

Messrs. Lucius H. Beers and Allan B. A. Bradley for the Cunard Steamship Company et al.

Messrs. Charles C. Burlingham and Roscoe H. Hupper for the American Line et al.

[Argument of Counsel from page 467 intentionally omitted] Messrs. Joseph Larocque, William G. Choate, and Nelson Shipman for the North German Lloyd et al.

Mr. Ralph James M. Bullowa for the Russian East Asiatic Steamship Company et al.

Mr. Chief Justice White delivered the opinion of the court:

The United States, on January 4th, 1911, commenced this suit to prevent the further execution of an agreement to which the defendants were parties and which it was charged constituted the foundation of an illegal combination in violation of the anti-trust act (26 Stat. at L. 209, chap. 647, Comp. Stat. 1913, § 8820). The relief asked, moreover, in the nature of things embraced certain subsidiary agreements made during the course of the execution of the main contract, in furtherance of its alleged prohibited result. The principal agreement was made in 1908, to last until February 28, 1911, but was to continue in force thereafter from year to year unless not later than December 1st of each year a notice of the intention not to continue was given. On December 3, 1910, however, just a month before this suit was filed, the agreement in question was renewed for a period of five years.

We give from the argument on behalf of the United States a statement of the corporate defendants to the bill, some of whom had become parties to the alleged illegal combination by subsidiary agreement or agreements made at a later date than the original contract.

1. 'The Allan Line Steamship Company, Limited, hereafter called the 'Allan Line,' a British corporation, operating from Portland, Boston, and Philadelphia to London, Liverpool, and Glasgow and return.

2. 'International Mercantile Marine Company, a New Jersey corporation, operating from New York and Philadelphia to Liverpool and Southampton and return.

3. 'Its ships, together with those of its subsidiary company, defendant International Navigation Company, Limited, also operating from New York and Philadelphia to Liverpool and Southampton, . . . are referred to as the 'American Line.' Besides International Navigation Company, Limited, it also controls through stock ownership the defendants British & North Atlantic Steam Navigation Company, Limited, Societe Anonyme de Navigation Belge Americaine, and Oceanic Steam Navigation Company, Limited.

4. 'British & North Atlantic Steam Navigation Company, Limited, a British corporation, hereafter called the 'Dominion Line,' operating from Portland to Liverpool and return.

5. 'Societe Anonyme de Navigation Belge Americaine, a Belgian corporation, hereafter called the 'Red Star Line,' operating from New York and Philadelphia to Antwerp and return.

6. 'Oceanic Steam Navigation Company, Limited, a British corporation, hereafter called the 'White Star Line,' operating from New York and Boston to Liverpool and Southampton and return.

7. 'The Anchor Line (Henderson Brothers), Limited, a British corporation, hereafter called the 'Anchor Line,' operating from New York to Glasgow and return.

8. 'Canadian Pacific Railway Company, a Canadian corporation, operating a regular line of steamships, hereafter called the 'Canadian Pacific Line,' from Montreal, Quebec, and St. John in the Dominion of Canada to Liverpool, England, and return. It also owns and operates a transcontinental railroad which, partly through branches running into the United States and partly though connections with the Wabash and other American railroads transports a substantial proportion (12 per cent) of its steamship passengers to and from points in this country.

9. 'The Cunard Steamship Company, Limited, a British corporation, hereafter called the 'Cunard Line,' operating from New York and Boston to Liverpool in England, Fiume in Hungary, and Trieste in Austria, and return.

10. 'Hamburg-Amerikanische Packetfahrt-Actien Gesellschaft, a German corporation, hereafter called the 'Hamburg-American Line,' operating from New York to Hamburg and return.

11. 'Nord Deutscher Lloyd, a German corporation, hereafter called the 'North German Lloyd Line,' operating from New York, Baltimore, and Galveston to Bremen and return.

12. 'Nederlandsh-Amerikaansche Stoomvaart Maatschapij (Holland-Amerika Lijn), a Netherlands corporation, hereafter called the 'Holland-American Line,' operating between New York and Rotterdam and retrun.

13. 'Russian East Asiatic Steamship Company, a Russian corporation, hereafter called the 'Russian-American Line,' operating between New York and Libau, Russia, and return.'

The individuals named as defendants were the principal officers and agents in this country of the corporate defendants. We extract from the argument on behalf of the government the following statement of the main provisions of the principal agreement.

'(1) The parties guarantee to each other certain definite percentages of the entire steerage traffic carried by them both eastbound and westbound between European ports and the United States and Canada, except Mediterranean passengers.

'(2) Any line exceeding its allotment must pay into the pool a compensation price of £4 for each excess passenger, which sum is to be paid proportionately to the line or lines which have not carried their full quota. It is expressly stated that this provision 'forms one of the main features of the entire contract.'

'(3) Each line must make a weekly report of the number of steerage passengers carried, and from these the secretary of the pool compiles weekly statements showing the pool position of each line. He also prepares each month provisional accounts of the compensation due from lines which have exceeded their quota. This must be paid immediately on paid of heavy penalties. Final settlements are made at the end of each year.

'(4) Each line undertakes to arrange its rates and service in such manner that the number of steerage passengers it actually carries shall correspond as nearly as possible with the number allotted to it by the contract. If any line exceeds its proportion it is in duty bound to adopt measures calculated to bring about a correct adjustment. The other lines may either await the action of the individual line, or a majority of the lines representing 75 per cent of the pool shares can immediately order rates on a plus line to be raised or rates on a minus line to be lowered, and from this order there is no appeal. It is expressly stated, however, that 'all parties were unanimously of the opinion that the adjustment is, whenever practicable, to be effected not by reducing the rates of one line, but, on the contrary, by raising the rates of one or several of the lines.

'(5) No line has the right to alter its steerage rates without having previously informed the secretary; i. e., all lines are bound to maintain existing rates until the other pool members are notified.

'(6) No circulars or publications shall be issued by any line reflecting upon or instituting comparisons with any other conference line unfavorable to the latter, and no party shall support (advertise in) any newspaper which shall systematically attack any conference line.

'(7) To insure the faithful performance of the agree- ment, each line deposits with the secretary a promissory note in the amount of £1,000 for each per cent of traffic allotted to it in the pool. From this amount penalties may be collected ranging from £250 for smaller infractions to the forfeiture of the entire deposit if the line withdraws from the agreement before its expiration, refuses to pay compensation money, or assists directly or indirectly any opposition line.

'(8) New lines may be admitted or the terms of the agreement altered only by unanimous vote, unless otherwise provided in the contract.

'(9) To assist in the carrying out of the agreement a secretary was appointed.

'(10) Regular meetings are to be held alternately at London and Cologne for the purpose of carrying out this agreement and agreements collateral thereto. These meetings constitute what is called the Atlantic Conference.

'Representatives of the Atlantic Conference Lines likewise meet in New York in what is called the American Atlantic Conference or New York Conference.'

It is to be observed in addition that the agreement expressly provided that the withdrawal of any one of the lines from the contract should release all others from all future obligation unless the others agreed among themselves to continue.

To the elucidation of the view we take of the case it suffices to say that, as the result of the answers of the defendants, the issues which arose for decision were two-fold in character: Did the anti-trust act relate to the business of ocean transportation with which the assailed agreement and those subsidiary to it were concerned; and if so, did the agreements and the conduct of the defendants under them constitute a...

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