Asso. 166 U. S. 290, 329, 41 L ed. 1007, 1023, 17 Sup. Ct. Rep. 540.

If this combination is to be adjudged a combination and conspiracy in restraint of commerce, there is scarcely an agreement or contract among business men that cannot be said to have, indirectly or remotely, some bearing upon interstate commerce, and possibly to restrain it.

Hopkins v. United States, 171 U. S. 578, 600, 43 L. ed. 290, 299, 19 Sup. Ct. Rep. 40. Congress did not attempt by the antitrust act to limit and restrict the rights of corporations created by the states, or of citizens of the states, in the acquisition or disposition of property, or to make criminal the acts of persons in the acquisition and control of property, which the states of their residence or creation sanctioned or permitted.

United States v. E. O. Knight Co. 156 U. S. 1, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249.

At common law a cessation or diminution of competition, springing from a unity of ownership,-as, where one competitor sold his business to another, or both sold out to a third person, etc., was never regarded as a restraint of trade; such cessation or diminution being incident to the union of property or business in one ownership, and not a restraint imposed by contract.

And so such purchases, or agreements to purchase, have never been held contracts in restraint of trade.

Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

The formation of corporations for business or manufacturing purposes has never been regarded as in the nature of a contract in restraint of trade or commerce. same may be said of the contract of partnership.

The

United States v. Joint Traffic Asso. 171 U. B. 505, 567, 43 L. ed. 259, 286, 19 Sup. Ct. Rep. 25.

The only question is, Does the contract or combination itself, or do the things the parties contracted to do, restrain commerce! If they do, the parties are criminals, however good their motives. If they do not, the parties are innocent, however reprehensible their designs.

United States v. Trans-Missouri Freight 4880. 166 U. S. 290, 341, 41 L. ed. 1007, 1027, 17 Sup. Ct. Rep. 540; Addyston Pipe Steel Co. v. United States, 175 U. S. 211, 234, 44 L. ed. 136, 145, 20 Sup. Ct. Rep. 96. The power to suppress competition is not of itself suppression.

The position of the government rests on wholly erroneous view of the relations of the shareholders of a railway company to the commerce of the company, and of the power of a majority of the shareholders to restrain or otherwise control that com

merce.

Hoyt v. Thompson, 19 N. Y. 207; Burrill v. Nahant Bank, 2 Met. 163, 35 Am. Dec. 395; Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U. S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194.

A monopoly of trade embraces two essential elements: (1) The acquisition of an exclusive right to or the exclusive control of the trade; and (2) the exclusion of all others from that right and control.

United States v. Trans-Missouri Freight Asso. 7 C. C. A. 15, 19 U. S. App. 36, 4 Inters. Com. Rep. 443, 58 Fed. 58.

An attempt to monopolize any part of the trade or commerce among the states must be an attempt to secure or acquire an exclusive right to such trade or commerce by means which prevent or restrain others from engaging therein.

Re Greene, 52 Fed. 104.

Monopolies are liable to be oppressive, and hence are deemed to be hostile to the public good. But combinations for a mutual advantage, which do not amount to a monopoly, but leave the field open to others, are within neither the reason nor the operation of the rule.

Oakdale Mfg. Co. v. Garst, 18 R. L. 484, 23 L. R. A. 639, 28 Atl. 973.

The anti-trust act and the regulative power of Congress under the commerce clause of the Constitution are alike strictly confined to matters which directly and immediately affect interstate or foreign commerce.

United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; United States v. Trans-Missouri Freight Asso. 166 U. S. 291, 41 L. ed. 1011, 17 Sup. Ct. Rep. 540; United States v. Joint Traffio Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Hopkins v. United States, 171 U. S. 578, 594, 43 L. ed. 290, 296, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U. S. 604, 43 L. ed. 300, 19 Sup. Ct. Rep. 50; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

A state may not tax railway earnings from transportation as such, for that is taxing the commerce, and is a direct regulation of it.

Fargo v. Michigan, 121 U. S. 230, 30 L ed. 888, 1 Inters. Com. Rep. 51, 7 Sup. Ct. State v. Northern Securities Co. 123 Fed. Rep. 857; Philadelphia & S. Mail 8. 8. Co. v.

692.

Pennsylvania, 122 U. S. 326, 338, 30 L. ed.

1200, 1202, 1 Inters. Com. Rep. 308, 7 Sup. | over many contracts purely domestic in Ct. Rep. 1118. their nature.

and 2d sections of the Sherman act.1 The statute is therefore a penal one, defining a criminal offense, for which it provides a punishment. It is an indispensable prerequisite to a conviction for a criminal misdemeanor, especially if there be no criminal intent, and such did not exist in the present case, that the offense condemned shall be clearly defined.

United States v. Wiltberger, 5 Wheat. 76, 5 L. ed. 37; United States v. Whittier, 5 Dill. 35, Fed. Cas. No. 16,688; Andrews v. United States, 2 Story, 213, Fed. Cas. No. 381; United States v. Hartwell, 6 Wall. 385, 396, 18 L. ed. 830, 832; Swearingen v. United States, 161 U. S. 446, 451, 40 L. ed. 765, 16 Sup. Ct. Rep. 562; France v. United States, 164 U. S. 676, 682, 41 L. ed. 595, 597, 17 Sup. Ct. Rep. 219; The Paulina v. United States, 7 Cranch, 61, 3 L. ed. 269; United States v. Reese, 92 U. S. 219, 23 L. ed. 565; United States v. Comerford, 25 Fed. 902; United States v. Chase, 135 U. S. 255, 261, 34 L. ed. 117, 119, 10 Sup. Ct. Rep. 756; United States v. Goldenberg, 168 U. S. 102, 42 L. ed. 398, 18 Sup. Ct. Rep. 3; Sarlls v. United States, 152 U. S. 570, 575, 38 L ed. 556, 558, 14 Sup. Ct. Rep. 720.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. ed. 315.

The power of Congress to regulate commerce does not confer upon it a right to prescribe the persons who may engage therein, or to regulate or control the ownership of shares of stock of corporations which engage therein.

United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 294.

That construction of a statute should be adopted which, without doing violence to the fair meaning of the words used, brings it into harmony with the Constitution.

Grenada County v. Brogden, 112 U. 8. 261, 28 L. ed. 704, 5 Sup. Ct. Rep. 125.

In interpreting a statute the intention of the law-making power will prevail even against the letter of the statute. A thing may be within the letter of the statute, and not within its meaning, or within its meaning, though not within its letter.

Hawaii v. Mankichi, 190 U. S. 197, 47 L. ed. 1016, 23 Sup. Ct. Rep. 787.

In Baltimore & O. R. Co. v. Maryland, 21 Wall. 456, 22 L. ed. 678, a stipulation in the charter of a railroad company, that the company should pay to the state a bonus, or The meaning of the words, "contracts in a portion of its earnings, was held, not rerestraint of trade," was thoroughly under-pugnant to the Constitution of the United stood in jurisprudence and in business when the Sherman act was passed. It was not the intention of Congress to create any new offense.

United States v. Trans-Missouri Freight Asso. 166 U. S. 328, 41 L. ed. 1023, 17 Sup. Ct. Rep. 540.

States.

In Ashley v. Ryan, 153 U. S. 436, 38 L. ed. 773, 4 Inters. Com. Rep. 664, 14 Sup. Ct. Rep. 865, a state was permitted, in allowing consolidation between corporations of dif ferent states, to charge upon the new consolidated company a percentage on its entire authorized stock as a fee, inasmuch as, without the franchises conferred by the state, it could not exist; and such charge was not an interference with interstate

The Sherman act does not apply to the formation of a corporation to carry on any particular line of business by those already engaged therein, or to a contract of part nership or of employment between two per-commerce. sons previously engaged in the same line of business.

United States v. Joint Traffic Asso. 171 U. S. 567, 43 L. ed. 286, 19 Sup. Ct. Rep. 25. The idea of monopoly involves something more than a mere acquisition of the whole, or of the major part, of a commodity or of shares of stock. It involves the idea of exclusion of other supply, as well as inclusion of what is actually acquired.

Re Greene, 52 Fed. 104; Charles River Bridge v. Warren Bridge, 11 Pet. 606, 9 L. ed. 847; 20 Am. & Eng. Enc. Law, p. 846; 2 Bouvier, Law Dict. Rawle's ed. p. 435; 4 Bl. Com. 159; Century Dict. Monopoly; United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

The purchase by one person of the property of his rival, with the intention thereby to destroy his competition, is not illegal, al though by the purchase he will acquire the power to prevent the same.

1 U. S. Comp. St. 1901, p. 8200,

The relief decreed was improper under any aspect of the case.

United States v. E. C. Knight Co. 156 U. S. 1, 17, 39 L. ed. 325, 331, 15 Sup. Ct. Rep. 249.

Mr. John W. Griggs also filed a brief for appellant the Northern Securities Company: In the division of authority with respect to interstate railways, Congress reserves to itself the superior right to control their commerce and forbid interference therewith, while to the states remains the power to create and to regulate the instruments of such commerce, so far as necessary to the conservation of the public interests.

Louisville & N. R. Co. v. Kentucky, 161 U. S. 702, 40 L. ed. 859, 16 Sup. Ct. Rep. 714.

The courts of the United States since the passage of the Sherman act have been called upon to restrain projected consolidations upon the ground that they were contrary to

state statutes, but no suggestion has been made that the legislation of Congress expressed in the Sherman act had any bearing on the subject.

Pearsall v. Great Northern R. Co. 161 U. B. 648, 40 L. ed. 839, 10 Sup. Ct. Rep. 705; Louisville & N. R. Co. v. Kentucky, 161 U. 8. 702, 40 L. ed. 859, 16 Sup. Ct. Rep. 714. The power exists in each state, by appropriate enactments not forbidden by its own or the Federal Constitution, to regulate the relative rights and duties of all persons and corporations within its jurisdiction, so as to provide for the public convenience and the public good. State legislation relating to commerce is not to be deemed a regulation of interstate commerce simply because it may, to some extent or under some circumstances, affect such commerce.

Lake Shore & M. S. R. Co. v. Ohio, 173 U. S. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465.

Pallman's Palace Car Co. v. Missouri P. R. Co. 115 U. &. 567, 29 L. ed. 499, 6 Sup. Ct. Rep. 194.

Where a contract, agreement, or arrangement of any kind is challenged as a combination in restraint of trade or commerce, the court will look at the form of the agree ment, and if it appears on its face to have as a necessary and direct result the effect of restraining trade or commerce, no inquiry into the intention or motives of the parties is requisite.

United States v. Joint Traffic Asso. 171 U. &. 505, 43 L ed. 259, 19 Sup. Ct. Rep. 25.

But if the arrangement is one which in itself is lawful, and is claimed to be invalid only because its ultimate object is to restrain commerce or competition, then it is necessary to examine the facts and circumstances to see if the forms of law are being used to further an illegal purpose.

In Missouri, K. & T. R. Co. v. Haber, 169 U. S. 613, 42 L. ed. 878, 18 Sup. Ct. Rep. United States v. Trans-Missouri Freight 488, it was held that the authority given by | Asso. 166 U. S. 341, 41 L. ed. 1027, 17 Sup. 5258 of the Revised Statutes of the Ct. Rep. 540; Hopkins v. United States, 171 United States1 to carry "freight and prop-U. S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. erty" over their respective roads from one state to another state did not authorize a railroad company to carry into a state cat tle known, or which by due diligence might be known, to be in such condition as to impart or communicate disease to the domestic cattle of such state.

40; United States v. Workingmen's Amalgamated Council, 26 L. R. A. 158, 4 Inters Com. Rep. 831, 54 Fed. 994; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; State ea rel. Atty. Gen. ▼. Shippers' Compress & Warehouse Co. (Tex. Civ. App.) 67 &. W. 1049, 95 Tex. 603, 69 8. W. 58.

In every instance where the Supreme Court has had occasion to pass upon the meaning of the Sherman act, it has been extremely careful to distinguish between acts which directly restrain commerce, and acts which only indirectly or incidentally have that effect.

And it has been expressly adjudged that the above statutory provision was not intended to interfere with the authority of the states to enact such regulations with respect, at least, to a railroad corporation of its own creation, as were not directed against interstate commerce, but which only Incidentally or remotely affected such commerce, and were not in themselves regula- United States v. E. C. Knight Co. 156 U. tions of interstate commerce, but were de- | S. 1, 12, 16, 39 L. ed. 325, 330, 15 Sup. Ct. signed reasonably to subserve the conveni- Rep. 249; United States v. Joint Traffic ence of the public. Asso. 171 U. S. 505, 566, 43 L. ed. 259, 286, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L ed. 136, 20 Sup. Ct. Rep. 96.

Lake Shore & M. 8. R. Co. v. Ohio, 173 U. B. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465; Cleveland, O. O. & St. L. R. Co. v. Illinois, 177 U. S. 514, 44 L. ed. 868, 20 Sup. Ct. Rep. 722.

All that has been done, even as contended by the government, has been to concentrate the ownership of a majority of the shares of the two companies into one hand, the owner being a corporation controlled by the same men who would own and control a majority of the capital stock of both railroad companies if the holding company had not been formed.

The companies remain distinct; the stockholders are not the corporation; each company is just as much subject to all the re quirements of the law as though its stockholders were entirely differen

U. S. Comp. St. 1901, p. 3EGE

Over internal commerce and trade Congress has no power of regulation, nor any direct control. This power belongs exclusive ly to the states. No interference by Congress with the business of citizens transacted within a state is warranted by the Constitution, except such as is strictly incidental to the exercise of powers clearly granted.

License Tax Cases, 72 U. S. 462, 18 L. od

497.

The fact that an article was manufactured for export to another state does not make it an article of interstate commerce.

Coe v. Errol, 116 U. S. 517, 29 L. ed. 715, 6 Sup. Ct. Rep. 475; Kidd v. Pearson, 128

S. 1, 32 L. ed. 346, 2 Inters. Com. Rep. 232, | but it is something more,—it is intercourse. Sup. Ct. Rep. 6.

It describes the commercial intercourse between nations and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse." This definition has been frequently repeated by the court.

Passenger Cases, 7 How. 283, 394, 462, 12 L. ed. 702, 748, 777; Henderson v. Wickham, 92 U. S. 259, 270, 23 L. ed. 543, 548; Lottery Case, 188 U. S. 321, 346, 47 L. ed. 492, 497, 23 Sup. Ct. Rep. 321.

The power of Congress is only to regulate, and is the power to prescribe the rule by which commerce is to be governed.

70.

Gibbons v. Ogden, 9 Wheat 196, 6 L. ed.

The interstate commerce power of Con

The sale of the stock of the two railroad corporations, no matter to whom it may be sold, nor how often such sales and transfers of the stock may take place, cannot, in any proper sense, be said to affect the transportation business carried on by the company.gress justifies only such regulations as act Clarke v. Central R. & Bkg. Co. 66 Fed. 16; upon that commerce directly, and does not Re Greene, 52 Fed. 104; Pearsall v. Great authorize regulations abridging the police Northern R. Co. 161 UJ. S. 646, 671, 40 L powers of the states or the personal rights ed. 838, 846, 16 Sup. Ct. Rep. 705; Rogers v. and privileges of individuals, if they affect Nashville, C. & St. L. R. Co. 33 C. C. A. 517, that commerce only indirectly, remotely, in62 U. S. App. 49, 697, 91 Fed. 312. cidentally, and collaterally.

|

The Sherman act is a penal statute; every Re Greene, 52 Fed. 104; United States v. act which may be prevented by injunctive E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, order would, if committed and proved, sub-15 Sup. Ct. Rep. 249; Gibbons v. Ogden, 9 ject the parties to criminal prosecution. The Wheat. 203, 6 L. ed. 71; United States v. rule of strict construction must therefore Joint Traffic Asso. 171 U. S. 505, 43 L. ed. be applied. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; Hopkins v. United States, 171 U. S. 592, 43 L. ed. 296, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U. S. 615, 43 L. ed. 305, 19 Sup. Ct. Rep. 50; Sherlock v. Alling, 93 U. &. 99, 23 L. ed. 819; Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 701, 40 L. ed. 849, 18 Sup. Ct. Rep. 714.

United States v. Whittier, 5 Dill. 35, Fed. Cas. No. 16,688; United States v. Sheldon, 2 Wheat. 119, 4 L. ed. 199; United States v. Hartwell, 6 Wall. 395, 18 L. ed. 832; United | States v. Shackford, 5 Mason, 445, Fed. Cas. No. 16,262; United States v. Clayton, 2 Dill. 219, Fed. Cas. No. 14,814; United States v. Garretson, 42 Fed. 22; Dwarris, Stat. 641; Hubbard v. Johnstone, 3 Taunt. 177.

Acquiescence by the government for more than eleven years in the actual merger and consolidation of many important parallel and competing limes of railroads and steamships engaged in interstate and international commerce has given a practical construction to the act of July 2, 1890,1 to the effect that it was not intended to forbid, and does not forbid, the natural processes of unification which are brought about under modern methods of lease, consolidation, merger, community of interest, or ownership of stock.

If the decision of the circuit court is correct, all the state laws either forbidding or authorizing consolidations of interstate carriers are and always have been void.

Cooley v. Port Wardens, 12 How. 299, 13 L. ed. 996; Cushing v. The John Fraser, 21 How. 184, 16 L. ed. 106; Pound v. Turck, 95 U. S. 459, 24 L ed. 525; Robbins V. Shelby County Taxing Dist. 120 U. S. 492, 30 L. ed. 695, 1 Inters. Com. Rep. 45, 7 Sup. Ct. Rep. 592; Mobile County ▼. Kimball, 102 U. S. 691, 26 L. ed. 238; United States v. E. C. Knight Co. 156 U. S. 11, 12, 39 L. ed. 328, 329, 15 Sup. Ct. Rep. 249; Addyston

Stuart v. Laird, 1 Cranch, 299, 2 L ed. Pipe & Steel Co. v. United States, 175 U. S.

115.

Mr. Charles W. Bunn argued the cause and filed a brief for appellant the Northern Pacific Railway Company:

The power of Congress has never been more accurately or completely described than by Chief Justice Marshall in Gibbons v. Ogden, 9 Wheat. 1, 189, 190, 6 L. ed. 23, 68: "Commerce, undoubtedly, is traffic. U. & Comp. St. 1901, p. 3200.

230, 44 L. ed. 143, 20 Sup. Ct. Rep. 96.

Except as it punishes contracts, combinations, and conspiracies, the statute intro duces no new rule of law. Whatever is a restraint of commerce now was such before this statute. The act is new only in making the preliminary conspiracy a crime.

Re Debs, 158 U. 8. 564, 39 L. ed. 1092, 15 Sup. Ct. Rep. 900; Addyston Pipe & Steel