Opinion of the Court.

a commercial monopoly. As Judge Hough said in United States v. MacAndrews (C. C.) 149 Fed. at page 833:

"Commerce among the states is not a technical legal conception, but a practical one drawn from the course of business. The criterion as to whether any given business scheme falls within the prohibition of the statute is its effect upon interstate commerce, which need not be a total suppression of trade nor a complete monopoly; it is enough if its necessary operation tends to restrain interstate commerce, and to deprive the public of the advantages flowing from free competition."

The indictments show an agreement, combination, conspiracy and monopoly directly restraining interstate trade. My reading of the indictments is confirmed by the record in the present cases, and has received the sanction of the Supreme Court of the United States.

On May 10, 1902, the district attorney for the Northern District of Illinois filed in the Circuit Court of the United States, in this Circuit, a bill or petition in chancery (case No. 26,291), against these defendants and various corporations and other persons. That action was brought under section 4 of the Sherman Act, and charged the defendants with substantially the same matters and things charged in these indictments. A final decree was entered restraining the defendants from

"entering into, taking part in or performing any contract, combination or conspiracy, the purpose or effect of which will be, as to trade and commerce in fresh meats between the several states and territories and the District of Columbia, a restraint of trade, either by directing or requiring their respective agents to refrain from bidding against each other in the purchase of live stock, or collusively and by agreement to refrain from bidding against each other at the sales of live stock; or by combination, conspiracy or contract raising or lowering the prices, or fixing uniform prices at which said meats will be sold, either directly or through their respective agents, or by curtailing the quantity of such meats shipped to such markets and agents.

*

On May 26, 1903, a new petition was filed, setting out a continuance by the defendants of the matters stated in the original bill.

On December 6, 1910, the defendants in the present proceedings filed their sworn petition, setting out the pleadings

Opinion of the Court.

and orders in chancery suit No. 26,291, and moved this court for an indefinite stay of proceedings. On page 64 of that sworn petition, at paragraph numbered "eighth" it is stated:

"The contemplated acts and transactions of these petitioners restrained and enjoined by said original decree, and the supposed acts and transactions of these petitioners alleged, charged and complained of in said new petition, are the same acts and transactions and are identical in substance and effect."

That same petition then charges, on page 65, in paragraph numbered "ninth " that the grand jurors returned indictment No. 4,509 in which the petitioners were charged with certain offenses, and then continues:

[102] "The alleged acts and transactions of these petitioners charged in and by said indictment to have constituted such combination in restraint of trade and such violation of said Anti-Trust Act are the same identical acts and transactions which are alleged and charged in said new petition against these petitioners."

And on page 66:

"The particular supposed acts and transactions alleged in said indictment No. 4,510 as constituting said illegal conspiracy and said violation of said Anti-Trust Act are the same identical acts and transactions, and not others, which are alleged in said new petition."

And further, on the same page:

"The supposed acts and transactions alleged in said indictment No. 4,511 as constituting the said alleged monopoly are the same identical acts and transactions, and not others, as those charged and alleged against these petitioners in and by said new petition."

The same counsel represented the defendants then as represent them on this demurrer, and even if there were doubt (and I believe there is not) as to whether the bill in chancery charged the same facts as are charged in these indictments, we have the judgment of the defendants themselves that the facts are substantially the same. These indictments were specific enough to warrant the defendants in stating this under oath.

The decree of the Circuit Court in the chancery case was reviewed in the Supreme Court of the United States, and in all essential particulars was sustained, Mr. Justice Holmes delivering the opinion, and all the other members of the

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court concurring. Swift & Co. v. United States, 196 U. S. 375, 25 Sup. Ct. 276, 49 L. Ed. 518. The court there said:

"The scheme, as a whole, seems to us to be within reach of the law."

In the light of that decision, and upon principle, it follows that the indictments in this case state facts which amount in law to a violation of the Sherman Act.

The demurrers will be overruled.

[102] UNITED STATES v. UNION PAC. R. CO. ET AL.a (Circuit Court, D. Utah. June 24, 1911.)

[188 Fed. Rep., 102.]

MONOPOLIES (§ 12)-ANTI-TRUST ACT-CONTRACTS OR COMBINATIONS PROHIBITED. To bring any transaction within the condemnation of Anti-Trust Act July 2, 1890, c. 647, § 1, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200), it must be a contract, combination, or conspiracy in restraint of international or interstate commerce, and this restraint must be substantial in character and the direct and immediate effect of the transaction complained of.

[Ed. Note. For other cases, see Monopolies, Cent. Dig. § 10; Dec. Dig. 12.]

[103] CARRIERS (§ 33)-THROUGH JOINT RATES-OPTION OF CABRIERS TO ESTABLISH.-Prior to the passage of the Hepburn act (Act June 29, 1906, c. 3591, 34 Stat. 584 [U. S. Comp. St. Supp. 1909, p. 1149]), in 1906, connecting railroads were free to adopt or refuse to adopt joint through tariff rates, and this freedom was not abridged, as between the Union Pacific Railroad Company and the Central Pacific Railroad Company, by either section 12 of act July 1, 1862, c. 120, 12 Stat. 495, requiring the roads of such companies to be operated as one continuous line, so far as the public or the government are concerned, or section 15 of act July 2, 1864, c. 216, 13 Stat. 362, which requires them to afford and secure to each equal advantages and facilities as to rates, time, and transportation, without discrimination.

[Ed. Note. For other cases, see Carriers, Cent. Dig. §§ 86-90; Dec. Dig. § 33.]

a Pending in the Supreme Court on the appeal of the United States. Syllabus copyrighted, 1911, by West Publishing Company.

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MONOPOLIES (8 16)-ANTI-TRUST ACT-COMPETING RAILROAD LINES— UNITING CONTROL.-In 1901 the Union Pacific Railroad Company bought stock of the Southern Pacific Company, which gave it practically a controlling interest, and the United States brought suit to enjoin the voting of such stock, on the ground that its acquisition was for the purpose of suppressing competition between the two companies in interstate commerce, and of monopolizing such commerce or a part thereof, in violation of Anti-Trust Act July 2, 1890, c. 647, §§ 1, 2, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200). At that time the Southern Pacific Company owned and operated a steamship line between New York and New Orleans, and rail lines from the latter place to the Pacific Coast, and by way of San Francisco to Portland, Or. It also owned and operated the line of the Central Pacific Railroad Company between San Francisco and Ogden, Utah, from which point it connected eastward with the line of the Union Pacific and also with another competing line. The main line of the Union Pacific extended from Omaha to Ogden, with a branch from Kansas City westward to a connection with the main line. It also, through subsidiary companies, owned and operated a line from a connection with its main line to Portland, and from there operated steamship lines to the Orient and to San Francisco. For through freight for the Pacific Coast originating east of its Missouri river terminals it was dependent on other roads, with which it there connected, and practically all of such freight for San Francisco was forwarded from Ogden over the Central Pacific line. 800 miles long, for which the Southern Pacific received about fourtenths of all the freight from Omaha or Kansas City westward. The rail and water line of the Union Pacific from Ogden to San Francisco by way of Portland was 1,700 miles long, its steamer service was irregular, and the amount of freight sent that way was negligible. The two companies were competitors to a small extent for Oriental business, for business from the Atlantic seaboard to Portland and vicinity, and also, through branches and connecting lines to and from other common points; but the total amount of such competitive business done by the Southern Pacific during the year ending in 1901 amounted to only 0.88 per cent. of its entire ionnage, and that done by the Union Pacific but 3.10 per cent. of its entire tonnage. While the Union Pacific maintained agents in the East to solicit business, it was chiefly from connecting carriers, and it received little more in freights for such business than did the Southern Pacific. Held, that the two roads were not substantial competitors for interstate or foreign business, in such sense that the purchase of the stock by the Union Pacific, for the purpose of giving it an assured connection with San Francisco, which it could control, constituted a direct restraint upon such commerce, in violation of the act.

[Ed. Note. Dig. 16.]

For other cases, see Monopolies, Cent. Dig. § 12; Dec.

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[104] MONOPOLIES (§ 24)—ANTI-TRUST ACT-SUIT FOR VIOLATION.— The purchase by an interstate railroad company of a majority of the stock of another company operating a competing line affords no ground for the granting of an injunction under Anti-Trust Act July 2, 1890, c. 647, § 4, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3201), where such stock was sold prior to the suit.

[Ed. Note. For other cases, see Monopolies, Cent. Dig. § 17; Dec. Dig. § 24.]

MONOPOLIES (§ 16)-ANTI-TRUST ACT-VIOLATION.-The purchase by an interstate railroad company of stock of another company operat ing a competing line, where it was insufficient in amount to give control of its competitor, and no attempt was made to exercise such control, does not effect a combination in restraint of interstate commerce, in violation of Anti-Trust Act July 2, 1890, c. 647, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200).

[Ed. Note. For other cases, see Monopolies, Cent. Dig. § 12; Dec. Dig. § 16.]

MONOPOLIES (§ 16)-ANTI-TRUST ACT-CONTRACTS PROHIBITED. —A contract to strangle a threatened competition, by preventing the construction of an immediately projected line of railway, which, if constructed, would naturally and substantially compete with an existing line for interstate traffic, is one in restraint of interstate commerce, and in violation of Anti-Trust Act July 2, 1890, c. 647, § 1, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200).

[Ed. Note. For other cases, see Monopolies, Cent. Dig. § 12; Dec. Dig. § 16.]

MONOPOLIES (§ 16)-ANTI-TRUST ACT-CONTRACT BETWEEN RAILROAD COMPANIES. The Union Pacific Railroad Company, through a subsidiary company, had projected and partly built a line of road between Salt Lake City and Los Angeles, when a controversy arose over a portion of the right of way through the mountains between that company and another, which also desired to build a road between the same points, which was finally settled by an agreement to unite and build a road in which each party should own a half interest, with a further agreement respecting rates on through business. The Union Pacific Company at that time owned a controlling interest in the Southern Pacific Company, which owned and operated a line through Los Angeles to San Francisco, and one from there to Ogden, near Salt Lake City. Held, that the new line, which was direct, and much more serviceable and convenient for the public, was not a natural competitor of the Southern Pacific Company with respect to business between Los Angeles and Salt Lake City in such sense as to constitute the agreement under which it was built a combination in restraint of interstate commerce, in violation of Anti-Trust Act July 2, 1890, c. 647, § 1, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200), nor was it unlawful thereunder, on the ground that it prevented the building of two