the parallel to the Knight case, arguing that "ownership of stock in railroads" was "not commerce at all."

Other anti-trust cases of much interest, both before and after this Northern Securities case might be cited, but the substantial position of the majority of the court, as summarized by Mr. Justice Harlan in this Northern Securities case, stood until the Oil and Tobacco cases of 1911 made the ruling which distinguished between reasonable and unreasonable restraints of trade. This is the one essential change in the court interpretation made during the past decade.

The Oil and Tobacco cases were spectacular by mere reason of the size of the Industrial Combinations at the bar. The combinations were leaders in the great Trust army. Their history reached back to the beginnings of Trusts in the country. Their growth, marked by many questionable competitive practices, had gone on steadily until each was not only in substantial national control of its kind of business, but had passed beyond the national boundaries into world trade relationships of such significance as to presage the possible development of world-wide monopolies. The government challenge of these giants was therefore viewed as a marked challenge to the whole great industrial combination movement. The more notable earlier suits had been against railway associations or minor selling combinations. These two suits sought court order of dissolution of two of the greatest manu. facturing and selling combinations that had ever been formed. The decisions rendered probably determine the interpretation of the Sherman Act that will stand for the life of that act and the decrees of dissolution

make precedents likely to be followed if other great combinations are later adjudged violators of the Sherman Act.

The Oil case* was brought in a Missouri Circuit 7 Court in November, 1906. The court decided in March, 1907, that all the non-resident corporations making up the Standard Oil combination might be made parties to the suits along with the Waters-Pierce Oil Company, a resident of the State of Missouri. In November, 1909, the suit was prosecuted in this Missouri Circuit Court, the entire set of Standard Oil companies being brought to trial. Decision was rendered against the Trust. Appeal was taken to the Supreme Court of the United States, where the case was argued in March 1910, reargued in January, 1911, and decision rendered May 15, 1911.

The original bill charged that the Standard Oil companies of New Jersey, California, Indiana, Iowa, Kansas, Kentucky, Nebraska, New York, and Ohio and sixty-two other corporations and partnerships together with seven individuals had conspired to restrain and to monopolize interstate trade and commerce in crude oil, refined oil, and other products of petroleum. It asked that the Standard Oil Company of New Jersey, which had, in 1899, become a holding company for all the other members of the combination, be declared to be a combination in restraint of trade and a monopoly, and be enjoined from exercising control in any manner over its constituent members. The Circuit Court had dismissed the case against thirty-three of the defend

*United States v. Standard Oil Company of New Jersey et al. 152 Fed. Rep., 290; 173 Fed. Rep. 177; 221 U. S. 1.

ant corporations. So the Standard Oil Company of New Jersey, thirty-seven subsidiary companies, and the seven individuals were the appellants before the Supreme Court.

This court, Mr. Justice Harlan alone dissenting, affirmed the decree of the lower court with slight modifications. In substance its decree held the Standard Oil Company of New Jersey to be a combination in restraint of trade and commerce, and a monopoly in violation of the Sherman Act, that it should be dissolved by the transfer back to the stockholders of the subsidiary corporations all stock that had been given to the New Jersey corporation in exchange for its stock; that the New Jersey corporation and the subsidiary corporations should be enjoined from doing anything which would give effect to further ownership by the New Jersey corporation of the stocks which had been transferred. The thirty days allowed by the Circuit Court for carrying the decree into execution was extended to six months, and that part of the lower court decree which enjoined the carrying on of interstate commerce by any of the corporations in the combination until dissolution had been effected, was annulled. The lower court was ordered to retain jurisdiction to the extent necessary to compel compliance in every respect with its decree.

In giving the decision of the Supreme Court, Mr. Chief Justice White, after stating the case, endorsing the inclusion of the non-resident defendants by the Circuit Court, and noting the numerous and seemingly irreconcilable issues of law and of fact, passed on to consider the correct interpretation of sections one and two of the Sherman Act. All parties agreed that the

controversy in every aspect was controlled by a correct conception of the meaning of these two sections. After he had reviewed common law and the law of the United States in restraint of trade, the Chief Justice said, in part:

"The statute under this view evidenced the intent not to restrain the right to make and enforce contracts, whether resulting from combination or otherwise, which did not unduly restrain interstate or foreign commerce, but to protect that commerce from being restrained by methods whether old or new, which would constitute an interference that is an undue restraint.

Thus not specifying but indubitably 'contemplating and requiring a standard, it follows that it was intended that the standard of reason which had been applied at the common law and in this country in dealing with subjects of the character embraced by the statute was intended to be the measure used for the purpose of determining whether in a given case a particular act had or had not brought about the wrong against which the statute provided. statute by the comprehensiveness of the enumerations embodied in both the first and the second sections makes it certain that its purpose was to prevent undue restraints of every kind and nature."*

The

Mr. Justice Harlan, concurring in part, dissented strongly against reading "undue" and "standard of reason" into the act. He cited the majority opinions of the Supreme Court in the Trans-Missouri Freight and the Joint Traffic cases, commenting:

"It thus appears that fifteen years ago, when the purpose of Congress in passing the Anti-Trust Act was fresh

*221 U. S. 60, 62.

in the minds of courts, lawyers, statesmen and the general public, this court expressly declined to indulge in judicial legislation by inserting in the act the word 'unreasonable' or any other word of like import."*

The Tobacco casef decision by the Supreme Court of May 29, 1911, held that the American Tobacco Company combination and all of its constituent elements were illegal, and ordered the Circuit Court to hear the parties and determine upon a method of dissolution of the combination within eight months, and, if necessary, to effect this result either by injunction or by receivership.

The construction of the Sherman Act as given in the Standard Oil case, reading in such terms as "unduly” and resorting to the "rule of reason" was affirmed, and, as before, Mr. Justice Harlan alone dissented and dissented against this "judicial legislation" only.

These two epochal decisions on the Sherman Act gave the new meaning to that act in obiter dicta, but these obiter dicta were elaborately argued and fully concurred in by all but one member of the court, so that they would seem to have the binding force of ultimate decision. The Sherman Act to-day, by official interpretation of the highest court, seems to stand as it was summarized by Mr. Justice Harlan in the Northern Securities case modified only to allow for the application of the "rule of reason as set forth in these great decisions in the Oil and Tobacco cases.

*221 U. S. 90.

†United States v. American Tobacco Company et al. 164 Fed. Rep. 700; 221 U. S. 106.

*See page 294.