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Pullman Strike of 1894 and continue to appear occasionally on the calendar down to the filing of indictments April 27, 1915, charging a conspiracy amongst labor unions in Chicago to prevent the installation of certain lighting fixtures. A number of these labor cases were dismissed. In others injunctions were granted. Merely nominal penalties were assessed in two of the cases, fines aggregating only $110 in a Louisiana case against seventy-two laborers, and sentences of four hours' confinement each against members of a Florida longshoremen's association who entered pleas of guilty to a charge of combining, conspiring, and agreeing upon rules for employment of workmen loading lumber vessels.
There were a number of suits against railway, wharf, and ocean shipping consolidations, including two of the leading cases in the interpretation of the Sherman Act, the Joint Traffic Association case, and the Northern Securities case.
There are many cases against combinations to control (1) Food supplies: sugar, meat, salt, groceries generally, butter, eggs, milk, ice, coffee, fruit, vegetables, canteloupes, breakfast foods, corn and corn products, wheat, oats, rye, and fresh fish; (2) Fuels, such as coal, oil, and kindling wood; (3) Household and manufacturing supplies, such as enamelware, plumbers' supplies, aluminum wares, incandescent lamps, thread, clotheswringers, school and church furniture, umbrella material, magazines, stationery, paper and paper boards, cash registers, lumber, stone, gunpowder and other explosives, tallow, fertilizers, paving bricks, wires and cables, shoe machinery, boot and shoe lasts, iron and
steel and other products, harvesting and agricultural machinery, posters, licorice paste, elevators, drugs and patent medicines, turpentine and resins, coal tar products, photographic supplies, telephones, gasolene tanks, gasolene pumps, and horseshoes. Even such sources of more or less innocent amusement as bicycles, motion picture machines, tobacco, whiskey, and tin cans have been compelled to answer the call of the court on antitrust grounds!
The net result of all this quarter century of Trust prosecution has been the collection of less than $600,000 in fines, a few mild confinement sentences, occasional grants of injunction and, particularly since 1911, some actual dissolutions of giant combinations. More important than these particular penalties has been the development of a general understanding in the business world that the Government will prosecute and that the courts will penalize if the anti-trust law is violated. This understanding has doubtless prevented the formation of combinations which would have been in peril of the law, and it has certainly aided in lessening the use of predatory competitive methods by big business.
The course of the court interpretation of the Sherman Act has not run entirely smoothly. Its earlier interpretations well nigh nullified the law. This accounts, in no small part, for the infrequent prosecutions of Trusts before 1905. Although one hundred and seventy-four cases were instituted under the Sherman Act during its first twenty-six years, only twenty-three of these cases were begun during the first fourteen years under that act.
By 1904 and 1905, notably in the Addyston Pipe
Company case and the Northern Securities case, the court had made clear the way for effective and sweeping application of the law. The deluge of prosecutions followed, more than a hundred cases being filed in the Federal Courts in the eight years beginning 1905.
In May, 1911, came the famous decisions of the Federal Supreme Court in the Oil and the Tobacco cases. These established definitely the interpretative doctrine of the "rule of reason." This doctrine had been used in application of the common law against monopolies and combinations in restraint of trade before the Sherman Act was passed. It had been invoked in dissenting opinions in the leading cases in 1904 and 1905 under the Sherman Act. It required, however, the almost unanimous decision of the Supreme Court in these elaborately prepared 1911 cases to give to the Sherman Act, authoritatively, its present meaning.
A brief review of eight leading cases under the Sherman Act will show the evolution of the court's interpretation of this law.
The Knight case,* instituted in the Circuit Court in Pennsylvania in January, 1894, and finally decided by the Supreme Court January 21, 1895, was the first case in which the law was given full consideration by the Supreme Court.
The bill in the Knight case charged that the American Sugar Refining Company, a New Jersey corporation, prior to March, 1892, had obtained control of all the sugar refineries in the United States with the exception of the Revere, of Boston, and four refineries in Philadelphia owned respectively by the E. C. Knight Com*United States v. E. C. Knight Co., et al. 60 Fed. 306 and 934; 156 U. S., 1.
pany, Spreckels' Sugar Refining Company, Franklin Sugar Refining Company, and the Delaware Sugar House; that these five refineries were competitors of the American and of one another, independently engaged in the manufacture and sale of refined sugar and in trade with the several states and with foreign nations; that the Revere refined annually about 2 per cent., and the four Philadelphia refineries, about 33 per cent. of the total sugar refined in the United States; that in March, 1892, the American Sugar Refining Company, by exchanging shares of its own stock for the stock of the four Philadelphia refineries, came into control of these four refineries and thus became the refiner of 98 per cent. of all the sugar refined in the United States; that to get this control the American Sugar Refining Company had entered into an unlawful scheme to purchase the stock of these competing companies for the purpose of restraining trade and that it monopolized the manufacture and sale of refined sugar in the United States and controlled the price of sugar.
The bill asked that the unlawful agreements be declared void, that the stock of the four companies be returned, and that injunctions be issued preventing the further carrying out of the unlawful contractual agreement and the further violations of the Sherman Act.
In final decision of this case, January 21, 1895, the Supreme Court held that the result of the action of the American Sugar Refining Company in purchasing the four Philadelphia refineries was the creation of a monopoly in the manufacture of a necessary of life which could not be suppressed under the provisions of the
Sherman Act, in the mode attempted in this suit, and that the acquisition of Philadelphia refineries by a New Jersey corporation, and the business of sugar refining in Pennsylvania, bore no direct relation to commerce between the states or with foreign nations.
In stating the opinion of the court, Mr. Chief Justice Fuller said in part:
"The relief of the citizens of each state from the burden of monopoly and the evils resulting from the restraint of trade among such citizens was left with the states to deal with. On the other hand, the power of Congress to regulate commerce among the several states is also exclusive. Commerce succeeds to manufacture, and is not part of it. The power to regulate commerce is the power to prescribe the rule by which commerce shall be governed, and is a power independent of the power to suppress monopoly. The fact that an article is manufactured for export to another state does not of itself make it an article of interstate commerce, and the intent of the manufacturer does not determine the time when the article passes from the control of the state and belongs to commerce if the national power extends to all contracts and combinations in manufacture, agriculture, mining, and other productive industries, whose ultimate result may affect external commerce, comparatively little of business operations and affairs would be left for state control.
There was nothing in the proofs to indicate any intention to put a restraint upon trade or commerce and the fact, as we have seen, that trade or commerce might be indirectly affected was not enough to entitle the complainants to a decree."*
*156 U. S. 11, 12, 13, 16, 17.