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pose gave no power to enter upon a scheme of getting control of substantially all the distillery business of the country for the purpose of controlling production and prices, crushing competition, and establishing a virtual monopoly in that business.

The decision in the preceding case was followed in Harding v. American Glucose Co. In the latter case the complainant was a stockholder of that company, which was a New Jersey corporation doing business at Peoria, Ill. It was charged, among other things, that the officers and directors of the corporation were about to make a sale of the plant at Peoria to a new corporation (the Glucose Sugar Refining Co.) and to abandon the business theretofore conducted; that five other corporations engaged in the same business were about to sell their plants to the new corporation; that all these sales constituted one transaction; and that the arrangement constituted a giant pool, trust, or combine, formed for the purpose of controlling the prices of glucose and grape sugar, of suppressing competition, and of creating a monopoly. The alleged method employed was to merge the plants by issuing stock in the new corporation, and where this method failed to buy such organizations and plants for cash. It was in evidence that there were only seven corporations engaged in the manufacture of glucose, and that one of them had refused to enter the combination; that glucose could not be successfully manufactured except in what is known as the corn belt of the United States; that the corn belt constituted an ellipse of about 950 miles in length and about 700 miles in width, with Peoria as the geographical center, and all within 1,000 miles of Chicago; that the contract between the American Glucose Co. and the new corporation provided that the former would not for 25 years within a radius of 1,500 miles of Chicago engage in the business of buying, manufacturing, or selling glucose, grape sugar, or any of the products of any glucose factory; and that somewhat similar contracts had been made with the other corporations. The agreement was carried into effect while the litigation was pending, and it was proved that as soon as the new organization undertook the operation of the plants conveyed to it, the prices of glucose and its products were advanced. The bill was dismissed and the complainant appealed. In reversing the decree the court held, among other things, that any combination of competing corporations for the purpose of controlling prices, or limiting production, or suppressing competition, was contrary to public policy; that the public policy of Illinois had always been against trusts and combinations organized for the purpose of suppressing competition and creating monopoly; that such policy was manifested by the decisions of its courts and the antitrust acts of 1891 and 1893; that under the circumstances the agreement not to

1182 Ill., 551 (1899).

manufacture and sell glucose within 1,500 miles of Chicago amounted to a total restraint of trade, was void, and the transaction, of which it was a part, illegal. The decree dismissing the bill was reversed and the cause was remanded with instructions to enter a decree setting aside the deed to the Glucose Sugar Refining Co. and all contracts, assignments, and other instruments accompanying its delivery, so far as the American Glucose Co. and its directors, officers, and stockholders were concerned. The following is quoted from the opinion of the court:

*

The material consideration in the case of such combinations is, as a general thing, not that prices are raised, but that it rests in the power and discretion of the trust or corporation taking all the plants of the several corporations to raise prices at any time, if it sees fit to do so. It does not relieve the trust of its objectionable features, that it may reduce the price of the articles which it manufactures, because such reduction may be brought about for the express purpose of crushing out some competitor or competitors. ** The transfer . of its property, made by the American Glucose Co., was a transfer to a corporation, created for the express purpose of taking its property and the property of other corporations, so as to use them in the suppression of competition, an1 in the creation of a monopoly in the manufacture of glucose, and grape sugar, and their products and by-products. The whole scheme, as devised and consummated, was a fraud not only on the public but upon the dissenting stockholder filing this bill. * * This contract [not to manufacture, etc.] indicates clearly that the object of the whole scheme was to suppress competition in the manufacture of the products referred to and to create a monopoly therein.

CHAPTER III.

THE FEDERAL ANTITRUST LAWS AND THEIR INTERPRETATION.

Section 1. Introductory.

This chapter presents, in its first part, the text of the Sherman Antitrust Act.

The second part of the chapter seeks to show the scope of the application of this act as determined by judicial decisions, especially with respect to certain kinds of combinations which fall within its prohibitions. The constitutionality of the Sherman Antitrust Act has been affirmed by the Supreme Court, the meaning of the terms used therein defined, and the scope of its application has been largely defined in the numerous cases that have been decided. The several sections indicate in a broad way what the judicial interpretation has been in these matters. In regard to the application of the act, no effort has been made at a minute analysis, the classification adopted being intended to show the ground broadly as to (1) kinds of persons or business affected (e. g., manufacturers, merchants, farmers, laborers, railroads, etc.), and (2) the chief devices for forming business combinations which have been held to be within the meaning of the law (e. g., price agreements, holding companies, mergers, etc.). This grouping, therefore, is not, nor is it intended to be, an exhaustive analysis of the decisions, but rather one of a practical character from the point of view of the layman as distinguished from that of the lawyer. The extent to which the various remedies afforded by the Sherman Antitrust Act have been applied is also described.

The third part of the chapter contains statements concerning other important Federal legislation affecting trusts and combinations in restraint of trade, namely, certain parts of the Wilson Tariff Act of 1894, of the Panama Canal Act of August 24, 1912, of the Federal Trade Commission Act of September 26, 1914, and of the Clayton Antitrust Act of October 15, 1914.

THE SHERMAN ANTITRUST ACT.

Section 2. Text of law.

The first and second sections of the Sherman Antitrust Act contain the two principal prohibitions, namely, against every contract, combination, or conspiracy, in restraint of interstate or foreign commerce, and against monopolizing or attempting to monopolize the same:

SEC. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign

nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

SEC. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

The third section applies the prohibitions of the first section to commerce within the Territories or the District of Columbia or to commerce between such jurisdictions or between them and the States and foreign nations:

SEC. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is hereby declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

Sections 4 and 5 give the circuit courts jurisdiction to enforce the law and provide that proceedings in equity may be brought by the United States Government to prevent and restrain violations thereof. The courts may make other persons parties to the proceedings:

SEC. 4. The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney-General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises. SEC. 5. Whenever it shall appear to the court before which any proceeding under section four of this act may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpoenas to that end may be served in any district by the marshal thereof.

Section 6 authorizes the seizure and condemnation of property in the course of transportation in interstate commerce or to a foreign country belonging to combinations, etc., prohibited in the first section:

SEC. 6. Any property owned under any contract or by any combination, or pursuant to any conspiracy (and being the subject thereof) mentioned in section one of this

act, and being in the course of transportation from one State to another, or to a foreign country, shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure, and condemnation of property imported into the United States contrary to law.

Section 7 gives to any person injured by reason of violation of this law a right to sue for treble damages, costs, etc.:

SEC. 7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.

Section 8 defines the word "person" to include corporations:

SEC. 8. That the word "person," or "persons," wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.

JUDICIAL INTERPRETATION.

Section 3. Topics considered.

The following sections (3 to 24) are intended to show the judicial interpretations of the Sherman Antitrust Act in regard to the following subjects: Constitutionality; interstate commerce; foreign commerce; restraint of trade; monopolize and attempt to monopolize; trading and manufacturing combinations; labor combinations; railroad combinations; farmers' combinations; mergers; holding companies; agreements to fix prices; agreements to limit output; agreements to apportion output; agreements to divide territory; agreements to divide earnings or profits; corners; patent combinations; agreements to fix resale prices, and the question of the certainty of the law. There is also a short section to show the extent to which the various remedies afforded by this law have been applied.

In each of these sections a particular topic is considered, including a general statement, a brief summary of the leading case or cases, and sometimes a few citations of other important cases bearing on the same subject.1

Section 4. Constitutionality.

The constitutionality of the Sherman Antitrust Act was decided at a comparatively early date in favor of the power of Congress to prohibit combinations in restraint of trade in interstate commerce under the clause of the Constitution which grants to Congress the power to regulate commerce among the States and with foreign nations.

1 Cases subsequent to Mar. 15, 1915, are not covered by this report.

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