221 U.S.

Argument for the United States.

Ft. Assn., 166 U. S. 290, 341, 342; Addyston Pipe Co. v. United States, 175 U. S. 211, 234; Swift & Co. v. United States, 196 U. S. 375, 396.

The fundamental design of the anti-trust legislation is not punishment of immorality, but prevention of mischief consequent upon unification of control and destruction of competition. The public is chiefly concerned about practical results-not mental attitudes. The lawfulness of a combination cannot be determined by the conscious purpose of the parties; necessary consequences are presumed to have been intended. United States v. Trans-Mo. Ft. Assn., 166 U. S. 290; United States v. Joint Traffic Assn., 171 U. S. 562; Addyston Pipe Co. v. United States, 175 U. S. 211, 234.

The word "unreasonable" cannot be read into the first section of the Sherman Act; but this does not render the prohibitions applicable merely because commerce is in some way affected, or to transactions always enforceable, and never regarded as objectionable from any standpoint. This court has never declared unlawful those ordinary business arrangements always sanctioned at common law and wholly outside the mischief intended to be prevented. Any act, however, although entirely innocent when standing alone may be criminal if part of an unlawful plan. United States v. Joint Traffic Assn., 171 U. S. 505, 567, 568; Hopkins v. United States, 171 U. S. 578, 600; Aikens v. Wisconsin, 195 U. S. 194, 205; Swift & Company v. United States, 196 U. S. 375, 396; Cincinnati Packet Co. v. Bay, 200 U. S. 179.

The Government does not maintain that restraint, obstruction or hindrance of commerce is denounced by the act unless direct and material either in tendency or effect; and, of course, do not insist that every contract or arrangement which merely eliminates a competitor in interstate trade is for that sole reason unlawful. The statute was intended to foster, not destroy, business operations

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universally regarded as promotive of public welfare. The suggestion that the statute denounces as criminal every party to any sort of contract which eliminates any independent dealer in interstate commerce however insignificant is untenable. But when, as in the present case, the restraint is the direct consequence of or that to which the challenged contract or combination necessarily tends, and is also of a material or substantial character it is clearly within the prohibition. The Government does not avouch and will not attempt to support this extreme construction which was adopted by the presiding judge below.

Contracts, combinations or conspiracies which give power materially to restrain commerce and indicate a dangerous probability of its exercise and those which necessarily tend to monopoly are unlawful without more. United States v. E. C. Knight Co., 156 U. S. 1; United States v. Trans-Missouri Ft. Assn., 166 U. S. 290; Northern Securities Company v. United States, 193 U. S. 197; United States v. Standard Oil Co., 173 Fed. Rep. 177. The essential purpose of the statute is to prevent injury-not merely to reverse a course of conduct.

The words, "contract, combination and conspiracy" in the statute are used in their ordinary sense, and there is no exception in favor of sales, conveyances or other executed arrangements. Pettibone v. United States, 148 U. S. 197, 203; Noyes on Intercorporate Relations, §§ 324 et seq.

The decision in United States v. E. C. Knight Company turned upon the conclusion that under the peculiar circumstances of that case what was alleged and proved did not show a direct or necessary obstruction to interstate commerce; and it may be relied upon only where the evidence requires a like finding on that point. The facts of the present case render such a conclusion impossible. The things done had direct reference to interstate and foreign

221 U.S.

Argument for the United States.

commerce; competition therein has been effectively destroyed and monopoly secured. In support of the foregoing doctrines, see United States v. E. C. Knight Company (1895), 156 U. S. 1; Pearsall v. Great Northern R. R. Co. (1896), 161 U. S. 646; United States v. Trans-Missouri Freight Assn. (1897), 166 U. S. 290; United States v. Joint Traffic Assn. (1898), 171 U. S. 505; Hopkins v. United States (1898), 171 U. S. 578; Anderson v. United States (1898), 171 U. S. 604; Addyston Pipe & Steel Company v. United States (1899), 175 U. S. 211; Montague & Company v. Lowry (1903), 193 U. S. 38; Northern Securities Company v. United States (1904), 193 U. S. 197; Harriman v. Northern Securities Company (1905), 197 U. S. 244; Swift & Company v. United States (1905), 196 U. S. 375; Cincinnati etc., Packet Co. v. Bay (1906), 200 U. S. 179; Loewe v. Lawlor (1908), 208 U. S. 274. See also National Cotton Oil Co. v. Texas, 197 U. S. 115; Shawnee Compress Co. v. Anderson, 209 U. S. 423; Continental Wall Paper Co. v. Voight, 212 U. S. 227; Pennsylvania Sugar Refining Company v. American Sugar Refining Co., 166 Fed. Rep. 254; Bigelow v. Calumet & Hecla Mining Company, 167 Fed. Rep. 704, 721; National Fireproofing Company v. Mason Builders Assn., 169 Fed. Rep. 259; United States v. Standard Oil Co., 173 Fed. Rep. 177.

Monopoly is the outcome of the practical cessation of effective business competition. This word in the AntiTrust Act has no reference to a grant of special privileges but is used in a broad sense. Trade and commerce in any commodity are monopolized whenever as the result of the concentration of competing businesses-not occurring as an incident to the orderly growth and development of one of them-one or a few corporations (or persons) acting in concert practically acquire power to control prices and smother competition.

The rights of an individual acting alone are not involved and it is unnecessary to inquire how far his acts

Argument for the United States.

221 U. S.

may be limited. Corporations do not have all the constitutional rights of an individual and are themselves combinations subject to the rules of law applicable to acts done in concert.

The word "monopolize" has no reference to a governmental grant. Congress was striking at an existing evilunification of control with consequent destruction of competition through powerful organizations. The essential idea of monopoly is ability to control prices or to deprive the public of advantages flowing from free competition. Whether the power has been actually exercised, or prices or the total volume of trade increased or diminished is immaterial; and its existence must be determined by practical consideration of existing conditions, giving due weight to the peculiarities of the commerce involved. It is certain that where parties have deliberately pursued a course, the ordinary result or necessary tendency of which is monopoly, they cannot be heard to deny an unlawful intent; and a monopoly acquired through contract, combination or conspiracy which directly and essentially destroys competition clearly is unlawful. United States v. TransMo. Ft. Assn., 166 U. S. 290; Addyston Pipe Co. v. United States, 175 U. S. 211; Swift & Co. v. United States, 196 U. S. 375.

The courts have long referred to "monopoly" the outcome of individual action as distinguished from governmental grant, and have declared unlawful every arrangement tending thereto. The word in the Sherman Act has the same significance as in the well-known opinions, from Mitchell v. Reynolds, 1 P. Williams, 181, to Continental Wall Paper Co. v. Voight, 212 U. S. 227; United States v. Addyston Pipe Co., 85 Fed. Rep. 271; United States v. E. C. Knight Co., 156 U. S. 1, 16; Pearsall v. Great Northern Railway Co., 161 U. S. 644; United States v. Freight Association, 166 U. S. 290, 323; National Cotton Oil Co. v. Texas, 197 U. S. 115; Shawnee Compress Co. v. Anderson,

221 U.S.

Argument for the United States.

209 U. S. 423, 433; People v. North River Sugar Refining Co., 54 Hun, 354; American Biscuit Co. v. Klotz, 44 Fed. Rep. 721, 724; Richardson v. Buhl, 77 Michigan, 632; Pocahontas Coke Co. v. Powhatan C. & C. Co., 60 W. Va. 508; Harding v. American Glucose Co., 182 Illinois, 619, 620; Noyes on Intercorporate Rels., §§ 329 et seq., 389; Andrews, Amer. Law (2d Ed.), Vol. I, 773.

The legislation against combinations and monopolies cannot be defeated by causing a corporation to acquire the shares or property and business of competing corporations; nor by any other scheme or device.

Corporate combinations which bring about the results denounced by the statute are unlawful. They are in fact more injurious to the public than the old forms of simple agreement among separate concerns or the wellknown trust forms. Eddy on Combinations, Vol. I, §§ 617, 620 et seq.; Noyes on Intercorporate Relations, § 307; Distillery Co. v. People, 156 Illinois, 448.

If the corporate form of combination is beyond the reach of Congress, it lacks supreme power to regulate commerce. Certainly a corporation, a mere creature of state law, cannot be endowed with power to obstruct commerce not possessed by the State itself. Deb's Case, 158 U. S. 564; Addyston Pipe Co. v. United States, 175 U. S. 211; Northern Securities Case, 193 U. S. 197.

The right to buy, sell and transfer property is not superior to the right to make other contracts; and all are subordinate to the power of Congress to regulate commerce. Addyston Pipe Co. v. United States, 175 U. S. 211; Northern Securities Co. v. United States, 193 U. S. 197; Swift & Co. v. United States, 196 U. S. 396; Shawnee Compress Co. v. Anderson, 209 U. S. 423; Armour Packing Co. v. United States, 209 U. S. 56; United States v. Del. & Hud. R. R. (Commodities Clause Case), 212 U. S. 366; Natl. Harrow Co. v. Hench, 83 Fed. Rep. 36; S. C., 84 Fed. Rep. 226.

A corporation which, not as an incident to orderly