United States v. New England Fish Exchange

• Decision Date: 11 July 1919
• Docket Number: 810.
• Citation: 258 F. 732
• Parties: UNITED STATES v. NEW ENGLAND FISH EXCHANGE et al.
• Court: U.S. District Court — District of Massachusetts

258 F. 732

UNITED STATES v. NEW ENGLAND FISH EXCHANGE et al.

No. 810.

United States District Court, D. Massachusetts.

July 11, 1919

[Copyrighted Material Omitted]

The United States Attorney and Edward F. McClennen, Sp. Asst Atty. Gen., for the United States.

Blodgett Jones, Burnham & Bingham and Addison C. Burnham, all of Boston, Mass., for New England Fish Exchange and other defendants.

Henry F. Hurlburt and Arthur P. French, both of Boston, Mass., for defendant Bay State Fishing Co. and others.

Charles T. Gallagher, Albert E. Pillsbury, Gaston, Snow & Saltonstall, and Nason & Proctor, all of Boston, Mass., for various defendants.

Before BINGHAM and JOHNSON, Circuit Judges, and ALDRICH, District judge.

BINGHAM Circuit Judge.

This is a bill in equity, brought June 21, 1917, by the United States to prevent the defendants named in the margin ^[1] (all of whom are engaged in or connected with the wholesale fresh fish business) from further violating the act of Congress approved July 2, 1890 (26 Stat. 209 (Comp. St. Secs. 8820-8823, 8827-8830)), and commonly known as the Sherman Act, and 'acts supplementing such act,' by combining and conspiring to monopolize and to restrain, and from monopolizing and restraining, a part of the trade and commerce among the several states in the fresh fish industry of New England, and particularly in that class of fresh fish known as 'ground fish' and certain migratory or seasonable fish, of which mackerel is an example. The particular provisions of the Sherman Law of which the acts set forth in the bill are alleged to be in violation are found in sections 1 and 2 (Comp. St. Secs. 8820, 8821), and it is claimed that some of the alleged offending acts are also in violation of section 7 of the Clayton Act of October 15, 1914 (38 Stat. 731, c. 323 (Comp. St. Sec. 8835g)).

The New England Fish Exchange is a Maine corporation, and was formed in the fall of 1908. All the wholesale fresh fish dealers then doing business in Boston, 44 in number (since reduced to 40), became members of the Exchange by the purchase of a share of its stock. At the time of the organization of the Exchange, the fish business at Boston was conducted at T Wharf and on Atlantic avenue and Commercial street, in the neighborhood of T Wharf. April 1, 1914, the business was removed to its present location at South Boston, known as the Boston Fish Pier. The Exchange was conducted at T Wharf from the time of its organization down to April 1, 1914, when it also was transferred to the Fish Pier.

The Bay State Fishing Company is a Maine corporation. It was organized in 1916, and took over the steam trawler fishing fleet of the Bay State Fishing Company of Massachusetts and 8 of the 40 dealers then members of the Exchange. These 8 dealers were Watts & Cook, Incorporated, John R. Neal Company, John Burns Company, Story-Simmons Company, Incorporated, H. A. Rich Company, B. F. Phillips Company, L. B. Goodspeed Company, and Alvin G. Baker.

The Boston Fish Pier Company is a Massachusetts corporation. It also was formed in 1916, when it took over 28 of the 40 dealers on the Exchange. It owns a control of the stock of the New England Fish Exchange, and through direct and indirect ownership, a control of the Boston Fish Market Corporation. The 28 dealers in the Boston Fish Pier Company are E. A. Rich Company, Cassius Hunt Company, Williams Bros. Fish Company, Arnold & Windsor Company, F. E. Harding Company, Hasking Fish Company, Atlantic & Pacific Fish Company, Baker, Boise & Watson Company, Freeman & Cobb Company, George M. Ingalls Company, Henry & Close Company, J. Adams & Co., Incorporated, P. H. Prior Company, Warren Fitch Company, Whitman, Ward & Lee Company, Ocean Fish Company, Star Fish Company, Coleman Son Company, Bay Fish Company, Taylor & Mayo Company, Rush Fish Company, Shore Fish Company, F. J. O'Hara & Co., Atlas Fish Company, Ernest F. Rich, doing business as A. F. Rich & Co., Lombard & Curtis, Fulham & Herbert, and the Boston Fish Company.

The Boston Fish Market Corporation is a Massachusetts corporation. It was organized by the dealers in 1910, with a view of acquiring a new location for the fish business, and holds, as lessee of the state of Massachusetts, a long-term lease of the premises at South Boston, where the Fish Pier is located and where the fish business is now conducted; the defendant dealers being sublessees.

The Commonwealth Ice & Cold Storage Company was organized in 1910 by the dealers to operate a cold storage plant, and since 1914 has occupied for this purpose certain premises set apart at the Fish Pier as sublessee of the Boston Fish Market Corporation. It is controlled by the Boston Fish Market Corporation, which owns a majority of its common stock.

The four remaining defendants have locations on the Fish Pier as sublessees of the Boston Fish Market Corporation, where they do a wholesale fresh fish business. They are William J. and Daniel J. O'Brien, copartners under the name of R. O'Brien & Co., Booth Fisheries Company, Bunting & Emery Company, and Gloucester Fresh Fish Company; the three latter being Massachusetts corporations.

The William Haskell Company was a wholesale concern formerly doing business on the Fish Pier. It is alleged in the bill that it was acquired by the Boston Fish Pier Company, but this is not correct. It has gone into bankruptcy and out of business.

For a series of years prior to 1908, the fresh fish business at Boston was conducted at T Wharf. During this period some of the dealers had places of business upon the wharf, and others were accommodated at different points on Atlantic avenue and Commercial street. The supply of fish was brought in by fishing schooners, having been caught at fishing grounds east and northeast of the New England coast. The fleet engaged in this business consisted of 136 schooners. The fishermen connected with the schooner fleet fish from dories with hand trawls. During the latter part of conducting the business at T Wharf, fishing by steam trawlers was introduced, and the supply of fish was thus augmented.

T Wharf was held under a lease by the T Wharf Fish Market Corporation, at a rental of some $35,000 a year and taxes, and such of the dealers as had places of business upon the wharf occupied them as subtenants of the Market Corporation. The wholesale dealers on Atlantic avenue and Commercial street were permitted to make use of T Wharf for obtaining supplies of fish, and some 5 or more retailers were allowed to go there for a like purpose. The revenues of the T Wharf Fish Market Corporation consisted of the rents received from tenants, the sums collected from the other dealers for storage of hand carts, and wharfage charges and charges for scales paid by the fishermen.

Prior to 1908 the dealers and others purchased their fish from the captains, either on the cap log of the wharf or elsewhere, as they saw fit. As a rule the sales were at auction on the wharf and of an entire trip of a given kind of fish. Many abuses sprang up, detrimental alike to the fishermen and the dealers. In 1908 the dealers, with the approval of the captains of the fishing schooners, organized the New England Fish Exchange and put it into operation on T Wharf. One of the purposes of its organization was to improve the methods of conducting the business upon the wharf. The approval of the captains was indicated in a document referred to in the record as the 'Captains' Agreement.' Counsel for the government contend that by it the captains bound themselves to bring all their fish to T Wharf to sell upon the Exchange. But an examination of the document discloses that its fair meaning is, not that they bound themselves to bring all their fish to the wharf to sell on the Exchange, but that they were willing to offer for competitive bidding on the Exchange such fish as they brought there, and to abide by the proposals therein made by the dealers in the nature of rules and regulations governing the transaction of business on the Exchange.

The authorized capital stock of the Exchange was 50 shares, of $100 each, and 44 dealers, who comprised substantially all the wholesale fresh fish dealers then in Boston, each purchased a share of the stock. Rules for the conduct of the business on the Exchange were adopted, which were in substantial accord with the proposals stated in the document called the 'Captains' Agreement.' Under these rules the business between the fishermen and the dealers was transferred from the cap log and elsewhere on the wharf to a room provided for the Exchange, where the captains were required, on the opening of the Exchange, to offer their fish for competitive bidding by the dealers. The captains were precluded from selling fish on the wharf outside of the room of the Exchange, except fish for salting; and a like rule applied to dealers in the purchasing or engaging fish at the wharf. The captains, having offered their fish on the Exchange, could withdraw it if they were not satisfied with the bids which they received, and offer it later on the Exchange or take it elsewhere. The fishermen paid the T Wharf Fish Market Corporation a wharfage charge of 30 cents per 1,000 pounds; they also paid the Exchange a charge of 1 per cent. on the selling price of their fish. In return for the latter charge the Exchange, on its part, undertook to keep a record of the transactions on the Exchange, and to pay each captain the price agreed upon with the dealer for his fish on receiving a card showing that the captain had delivered to the dealer the fish that the latter had bought. The Exchange also established a recognized cull and quality of fish, and provided means for settling disputes between the captains and the dealers and carrying their...