tow boat combinations on the Great Lakes, and steerage pools in the European service. A third distinct group of prosecutions dealt with attempted temporary corners in such staples as coffee, grain, and cotton, exemplified in the Sielcken valorization case of 1912, the Patten and Thompson convictions of 1910 and 1913, and the Chicago Board of Trade proceedings. Dealings with public utilities corporations are relatively few. The amicable settlement with the American Telephone and Telegraph Company in 1914 is a rare exception. Apart from the railroads, most public utilities are subject, if at all, to the control of the several states. A large group of the anti-trust prosecutions during the decade after 1901, were directed against local and sometimes petty attempts at the elimination of competition in merchandising.1 Jobbers' and retailers' agreements in the lumber trade were perhaps the most frequent, with coal cases as a close second. Wholesale grocers' associations, particularly in the South; agreements between dealers in such necessities as ice, milk and butter; attempts by pooling or otherwise to enhance prices of fruit and produce, naval stores, wall paper, plumbing supplies, drugs, and even charcoal and kindling wood; combinations between jewelry manufacturers and bill posters; periodical and newspaper "insides" clearing houses; even such apparently free businesses as quarrying and deep-sea fishing; all these have been haled into court with varying degrees of success to the government. Most of these were pools or price agreements of one sort or another, and are best described by reference to the preceding chapters, (I) dealing with the early salt association, (III) the more recent wire nail pool, or (IV) the Addystone pipe combination.2 Of distinctively labor decisions, there were many; although none rivaled the Debs case of 1894 in importance. Fines were imposed upon seventy-two Louisiana laborers in 1908. Joe Cotton and others were indicted for a strike on the Illinois Central; and an alleged conspiracy among longshoremen was attacked three years later. In 1913 the United Mine Workers' and the electricians' unions were proceeded against. And the noteworthy and tragic conviction of the hatters' national union after protracted litigation, in Loewe v. Lawlor, with fines aggregating a quarter of a million dollars exercised a great influence upon the Federal legislation of 1914 amending the Sherman AntiTrust law [Chapter XIX, infra]. And then, more rarely, there are the efforts to control association in their own interest by agriculturists, — the more notable, perhaps, because of the agitation for and subsequent amendment by the Clayton bill in 1914, exempting farmers from the Anti-Trust law altogether. The case of United States v. Steers in 1910, seeking to restrain the Kentucky "Night Riders" from regulating production in the Burley tobacco fields, led to the conviction of, and imposition of fines aggregating $3500 upon, eight

1 Details by Stevens in Quarterly Journal of Economics, Vol. XXVI, 1912, pp. 630 ff. 2 Cf. also Quarterly Journal of Economics, Vol. XXVI, 1912, pp. 593-643, and American Economic Review, 1913, pp. 549-575

of the ring leaders. The prosecution of the butter and egg combinations of Chicago and Elgin, Illinois, in 1912-1914 belongs rather in the category of merchandising than of agricultural production.

Two other distinct groups of cases deal, respectively, with abuse of the privilege of Federal licenses - the so-called patent pools - and with vicious trade practices, as such, irrespective of the nature of the combination. These will be exemplified concretely in the decisions reported in the next chapter, which were framed upon the basis of the construction according to the law of reason in the Standard Oil decision. There were many of each of these during the decade to 1911 under review; but they in no instance attained prominence because of any advance in the interpretation of the anti-monopoly law.1 This distinction was reserved for the two leading opinions reprinted in this chapter. They mark a sharp turning point in construction,2 the entire conviction at last of the mind of the Supreme Court of the United States, that all was not well with business as it had come to be conducted in America, but that, nevertheless, the time had arrived to discriminate between what was evil, deserving elimination, and that which was so inherently sound and necessary as to merit the protection, nay even the encouragement, of the law. The legal basis for this distinction is outlined in the following opinions. — Ed.

THE STANDARD OIL DECISION 8

Mr. Chief Justice White delivered the opinion of the court. The conspiracy was alleged to have been formed in or about the year 1870 by three of the individual defendants, viz.: John D. Rockefeller, William Rockefeller, and Henry M. Flagler. The detailed averments concerning the alleged conspiracy were ar

1 Possible exception may be made of Montague & Company v. Lowry. (193 U. S. Rep. 38. Decided February 23, 1904.) An association was formed in California by manufacturers of and dealers in tiles, mantels, and grates; the dealers agreed not to purchase materials from manufacturers who were not members, and not to sell unset tiles for less than list prices, which were 50 per cent higher than to members. Manufacturers, resident in other states than California, agreed not to sell to any other than members. Membership was prescribed by rules, such as carrying $3000 worth of stock. A firm of outside dealers who were not members, and who did not carry $3000 worth of stock, brought action under § 7 of the Anti-Trust Act of 1890. It was held, that although sales within the state were but a small part of the total transactions involved, the general effect of the scheme was to enhance prices; and that it was impossible to separate intrastate from interstate business; and that a combination in restraint of trade had been shown. The parties aggrieved were entitled to recover threefold damages as found by the jury.

2 On this point ef. Journal of Political Economy, Vol. XXIII, 1915, pp. 204 ff. 3 Standard Oil Co. v. United States, 31 Supreme Court Reporter, 502; 221 U. S. 1. Decided May 15, 1911. Many extended legal çitations are stricken out for purposes

ranged with reference to three periods, the first from 1870 to 1882, the second from 1882 to 1899, and the third from 1899 to the time of the filing of the bill.

The general charge concerning the period from 1870 to 1882 was as follows:

That during said first period the said individual defendants, in connection with the Standard Oil Company of Ohio, purchased and obtained interests through stock ownership and otherwise in, and entered into agreements with, various persons, firms, corporations, and limited partnerships engaged in purchasing, shipping, refining, and selling petroleum and its products among the various states, for the purpose of fixing the price of crude and refined oil and the products thereof, limiting the production thereof, and controlling the transportation therein, and thereby restraining trade and commerce among the several states, and monopolizing the said commerce.

To establish this charge it was averred that John D. and William Rockefeller and several other named individuals, who, prior to 1870, composed three separate partnerships engaged in the business of refining crude oil and shipping its products in interstate commerce, organized in the year 1870 a corporation known as the Standard Oil Company of Ohio, and transferred to that company the business of the said partnerships, the members thereof becoming, in proportion to their prior ownership, stockholders in the corporation. It was averred that the other individual defendants soon afterwards became participants in the illegal combination, and either transferred property to the corporation or to individuals, to be held for the benefit of all parties in interest in proportion to their respective interests in the combination; that is, in proportion to their stock ownership in the Standard Oil Company of Ohio. By the means thus stated, it was charged that by the year 1872, the combination had acquired substantially all but three or four of the thirty-five or forty oil refineries located in Cleveland, Ohio. By reason of the power thus obtained, and in further execution of the intent of condensation, where merely cross references, often without specific indication. This is a compilation for economists, not for lawyers. An excellent commentary by Professor Seager will be found in Political Science Quarterly, Vol. XXVI, 1911, pp. 581-614.

and purpose to restrain trade and to monopolize the commerce, interstate as well as intrastate, in petroleum and its products, the bill alleged that the combination and its members obtained large preferential rates and rebates in many and devious ways over their competitors from various railroad companies, and that by means of the advantage thus obtained many, if not virtually all, competitors were forced either to become members of the combination or were driven out of business; and thus, it was alleged, during the period in question, the following results were brought about: (a) That the combination, in addition to the refineries in Cleveland which it had acquired, as previously stated, and which it had either dismantled to limit production, or continued to operate, also from time to time acquired a large number of refineries of crude petroleum, situated in New York, Pennsylvania, Ohio, and elsewhere. The properties thus acquired, like those previously obtained, although belonging to and being held for the benefit of the combination, were ostensibly divergently controlled, some of them being put in the name of the Standard Oil Company of Ohio, some in the name of corporations or limited partnerships affiliated therewith, or some being left in the name of the original owners, who had become stockholders in the Standard Oil Company of Ohio, and thus members of the alleged illegal combination. (b) That the combination had obtained control of the pipe lines available for transporting oil from the oil fields to the refineries in Cleveland, Pittsburg, Titusville, Philadelphia, New York, and New Jersey. (c) That the combination during the period named had obtained a complete mastery over the oil industry, controlling 90 per cent of the business of producing, shipping, refining, and selling petroleum and its products, and thus was able to fix the price of crude and refined petroleum, and to restrain and monopolize all interstate commerce in those products.

The averments bearing upon the second period (1882 to 1899) had relation to the claim:

That during the said second period of conspiracy the defendants entered into a contract and trust agreement, by which various independent firms, corporations, limited partnerships, and individuals engaged in purchasing, transporting, refining, shipping, and selling

oil and the products thereof among the various states, turned over the management of their said business, corporations, and limited partnerships to nine trustees, composed chiefly of certain individuals defendant herein, which said trust agreement was in restraint of trade and commerce, and in violation of law, as hereinafter more particularly alleged.

The trust agreement thus referred to was set out in the bill. It was made in January, 1882. By its terms the stock of forty corporations, including the Standard Oil Company of Ohio, and a large quantity of various properties which had been previously acquired by the alleged combination, and which was held in diverse forms, as we have previously indicated, for the benefit of the members of the combination, was vested in the trustees and their successors, "to be held for all parties in interest jointly." In the body of the trust agreement was contained a list of the various individuals and corporations and limited partnerships whose stockholders and members, or a portion thereof, became parties to the agreement. This list is in the margin. [Omitted.]

The agreement made provision for the method of controlling and managing the property by the trustees, for the formation of additional manufacturing, etc., corporations in various states, and the trust, unless terminated by a mode specified, was to continue "during the lives of the survivors and survivor of the trustees named in the agreement and for twenty-one years thereafter." The agreement provided for the issue of Standard Oil Trust certificates to represent the interest arising under the trust in the properties affected by the trust, which, of course, in view of the provisions of the agreement and the subject to which it related caused the interest in the certificates to be coincident with and the exact representative of the interest in the combination, that is, in the Standard Oil Company of Ohio. Soon afterwards it was alleged the trustees organized the Standard Oil Company of New Jersey and the Standard Oil Company of New York, the former having a capital stock of $3,000,000 and the latter a capital. stock of $5,000,000, subsequently increased to $10,000,000, and $15,000,000, respectively. The bill alleged "that pursuant to said trust agreement the said trustees caused to be transferred to themselves the stocks of all corporations and limited partnerships named in said trust agreement, and caused various of the