United States v. Hamburgh-American S.S. Line

• Decision Date: 13 October 1914
• Citation: 216 F. 971
• Parties: UNITED STATES v. HAMBURGH-AMERICAN S.S. LINE et al.
• Court: U.S. District Court — Southern District of New York

216 F. 971

UNITED STATES v. HAMBURGH-AMERICAN S.S. LINE et al.

United States District Court, S.D. New York.

October 13, 1914

H Snowden Marshall, U.S. Atty., and Henry A. Guiler, Asst. U.S Atty.

Spooner & Cotton, of New York City (John C. Spooner, of New York City, of counsel), for Hamburgh-American Line, Allan Line and Canadian Pac. Ry. Co.

Choate & Larocque, of New York City (Joseph Larocque and Nelson Shipman, both of New York City, of counsel), for North-German Lloyd and defendants Schwab and others.

Burlingham Montgomery & Beecher, of New York City (Charles C. Burlingham, Norman B. Beecher, Charles Burlingham and Roscoe H. Hupper, all of New York City, of counsel), for American Line, Anchor Line, Dominion Line, Holland-America Line, Red Star Line, White Star Line, and defendants Franklin, Coverly, and Gips.

Lord, Day & Lord, of New York City (Lucius H. Beers and Allan B. A. Bradley, of New York City, of counsel), for Cunard S.S. Co., Limited, and defendant Sumner.

Ralph J. M. Bullowa, of New York City, for Russian-American Line and defendants Johnson and Strauss.

Before LACOMBE, COXE, WARD, and ROGERS, Circuit Judges.

LACOMBE Circuit Judge.

The writer's opinion as to what, under prior decisions, was the construction to be given to the Sherman Anti-Trust Act, will be found fully set forth in U.S. v. American Tobacco Co. (C.C.) 164 F. 700. If that construction were followed in this case, there could be no doubt as to the conclusion to be reached upon the facts proved. It is practically not disputed that, by the various agreements and conferences which together constitute the combination complained of, that branch of trans-Atlantic commerce which is concerned with the transport of steerage passengers is arbitrarily interfered with, so that the proportions of it carried by the various lines, which have so combined, are not as they would be if full, free, and unrestricted competition were the sole controlling power to effect the distribution.

Since the decision above cited, however, there have been two exhaustive opinions of the Supreme Court dealing with this act. Standard Oil Co. v. United States, 221 U.S. 1, 31 Sup.Ct. 502, 55 L.Ed. 619, 34 L.R.A. (N.S.) 834, Ann. Cas. 1912D, 734; United States v. American Tobacco Co., 221 U.S. 106, 31 Sup.Ct. 632, 55 L.Ed. 663. The effect of these would seem to be that contracts and methods of business, which do in fact restrain or interfere with competition, are not to be held obnoxious to the provisions of the act, unless such restraint or interference is 'unreasonable' or 'undue.'

'Without going into detail, and but very briefly surveying the whole field, it may be with accuracy said that the dread of enhancement of prices and of other wrongs, which it was thought would flow from the undue limitation or competitive conditions caused by contracts or other acts of individuals or corporations, led, as a matter of public policy, to the prohibition or treating as illegal all contracts or acts which were unreasonably restrictive of competitive conditions, either from the nature or character of the contract or act, or where the surrounding circumstances were such as to justify the conclusion that they had not been entered into or performed with the legitimate purpose of reasonably forwarding personal interest and developing trade, but, on the contrary, were of such a character as to give rise to the inference or presumption that they had been entered into or done with the intent to do wrong to the general public and to limit the right of individuals, thus restraining the free flow of commerce and tending to bring about the evils, such as enhancement of prices, which were considered to be against public policy. * * * The statute * * * evidenced the intent not to restrain the right to make and enforce contracts, whether resulting from combination or otherwise, which did not unduly restrain interstate or foreign commerce, but to protect that commerce from being restrained by methods, whether old or new, which would constitute an interference that is an undue restraint. ' Standard Oil Co. v. United States, 221 U.S. 58, 59, 60, 31 Sup.Ct. 515, 55 L.Ed. 619, 34 L.R.A. (N.S.) 834, Ann. Cas. 1912D, 734.

'Applying the rule of reason to the construction of the statute, it was held in the Standard Oil Case that as the words 'restraint of trade' at common law and in the law of this country at the time of the adoption of the Anti-Trust Act only embraced acts or contracts or agreements or combinations which operated to the prejudice of the public interests by unduly restricting competition or unduly obstructing the due course of trade or which, either because of their inherent nature or effect or because of the evident purpose of the acts, etc., injuriously restrained trade, that the words as used in the statute were designed to have and did have but a like significance. It was therefore pointed out that the statute did not forbid or restrain the power to make normal and usual contracts to further trade by resorting to all normal methods, whether by agreement or otherwise, to accomplish such purpose. ' United States v. American Tobacco Co., 221 U.S. 179, 31 Sup.Ct. 648, 55 L.Ed. 663.

To determine whether any particular course of conduct is or is not 'undue' or 'unreasonable' involves, of course, a consideration of all the surrounding circumstances which may be multifarious. Moreover, opinions will sometimes differ as to what should be the answer to such a question. Upon a...