221 U.S. Argument for the American Tobacco Co. competing corporation, generally for cash. These transactions are not within the operation of the Sherman Law, because they primarily affect manufacturing and not commerce. Veazie v. Moor, 14 How. 568; County of Mobile v. Kimball, 102 U. S. 691; Coe v. Errol, 116 U. S. 517; Turpin v. Burgess, 117 U. S. 504; Kidd v. Pearson, 128 U. S. 1; In re Greene, 52 Fed. Rep. 104; United States v. Knight, 156 U. S. 1. The Knight Case was not a sporadic decision of this court, but was the logical outcome of the cases that preceded it that have just been cited, and it has not been overruled or modified by any subsequent decision, but has been expressly recognized wherever mentioned. Addyston Pipe & Steel Co. v. United States, 175 U. S. 211; Montague v. Lowry, 193 U. S. 38; Swift & Co. v. United States, 196 U. S. 375; Shawnee Compress Co. v. Anderson, 209 U. S. 423; Loewe v. Lawlor, 208 U. S. 274; Northern Securities Co. v. United States, 193 U. S. 197, 406; Continental Wall Paper Co. v. Voight, 212 U. S. 227; Ware v. Mobile County, 209 U. S. 405; Bigelow v. Calumet Co., 167 Fed. Rep. 721. Confusion has arisen and it has been assumed that the Knight Case has been overruled or modified because of the failure to distinguish between the persons complained of and the transaction which is the basis of the complaint. The defendants in this case and the defendants in the Knight Case were engaged in interstate commerce, but the question is not whether the defendant is engaged or not in interstate commerce, but whether the transaction complained of is an act of, or direct in its effect on, interstate commerce; one engaging in interstate commerce does not thereby subject himself and his whole business to the control of Congress. Howard v. Railroad Company, 207 U. S. 463, 502. Any attempt to distinguish this case from the Knight Case based upon unskillful pleading on the part of the Government in the Knight Case, is defeated by a consider Argument for the American Tobacco Co. 221 U. S. ation of the record of that case on file in this court. The scope of the Knight Case as here contended has been assumed by the law department of the Government from 1895 to 1907. Annual Reports of the Attorney General 1895, p. 13; for 1896, p. xxvii; for 1899, pp. 21 et seq.; for 1906, p. 7; Senate Document No. 687, 2d Session, 60th Congress, p. 27. Upon the decision in the Knight Case, the defendants-and these defendants are only one among many in this respect-have proceeded; this adjudication of this court has become a rule of property, and to overrule it would make wrecks of these enterprises; a case of such close analogy to ex post facto laws is presented that the maxim of stare decisis becomes almost as if embodied in the Constitution itself. It is as important that the law should be settled permanently as that it should be settled correctly. Gilbert v. Philadelphia, 3 Wall. 713, 724; Vale v. Arizona, 207 U. S. 201, 205. Without reference to whether the trade is interstate, the transactions shown by this record do not constitute contracts, combinations or conspiracies in restraint of trade, and are not against the public policy which this court has (Northern Securities Case, supra) declared to be the purpose and effect of the Sherman Law. The intent of Congress was not to unsettle legitimate business enterprises, but rather to place a statutory prohibition, with prescribed penalties and remedies, upon those contracts which were in direct restraint of trade, unreasonable, and against public policy. (Mr. Justice Brewer in Northern Securities Case). The transfer of property by purchase, sale, or consolidation, whether by the formation of partnerships, organization of corporations, or consolidation of preëxisting corporations, is not violative of the common law. See Fairbanks v. Leary, 40 Wisconsin, 637; People v. North River Sugar Refining Co., 121 N. Y. 583; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507; Cameron v. Water Co. (N. Y.), 62 Hun, 269; Vinegar Co. v. Foehrenback, 148 N. Y. 221 U.S. Argument for the American Tobacco Co. 58; Dittman v. Distilling Co., 64 N. J. Eq. 544; Commonwealth v. Hunt, 4 Metc. 111; Oakdale Co. v. Garst, 18 R. I. 484; McCauley v. Tierney, 19 R. I. 225; Bohn Co. v. Northwestern Assn., 54 Minnesota, 223; Monongahela Co. v. Jutte, 210 Pa. St. 288, 300. Such transfer and consolidation is not opposed to the public policy, but is expressly authorized and facilitated by the merger statutes of many States, and is forbidden by the statutes of none. Many of the States which authorize the merger of corporations have anti-trust statutes of the same general import as the Sherman Anti-Trust Law, and to give to the Federal AntiTrust statute the meaning contended for by the Government and to import that meaning into the various state anti-trust statutes would work the incongruity of assuming that the States had facilitated the formation of corporations, which by their very formation would become outlaws of commerce. The decision of this court in Northern Securities Case is not in conflict with the contention here made; this court in the Northern Securities Case did not overrule or modify the declarations theretofore made, and in subsequent decisions has not recognized the Northern Securities Case as in conflict with the contention here made. Trans-Missouri Freight Assn. Case, 166 U. S. 290; United States v. Joint Traffic Assn., 171 U. S. 505; Smiley v. Kansas, 196 U. S. 447; National Cotton Oil Co. v. Texas, 197 U. S. 115; Cincinnati Packing Co. v. Bay, 200 U. S. 179; Chesapeake & Ohio Co. v. United States, 115 Fed. Rep. 610, 620; Davis v. Booth, 131 Fed. Rep. 31, 37; Robinson v. Brick Co., 127 Fed. Rep. 804; Connor-McConnell Co. v. McConnell, 140 Fed. Rep. 412; aff., idem, 987; Fisheries Co. v. Lennen, 116 Fed. Rep. 217; Harrison v. Glucose Co., 116 Fed. Rep. 304; National Co. v. Haberman, 120 Fed. Rep. 415; Bigelow v. Calumet Co., 167 Fed. Rep. 721. The combinations and contracts in existence at the passage of the Sherman Law, and in the contemplation of Congress in its enactment, Argument for the American Tobacco Co. 221 U.S. were entirely distinct from those combinations of capital and ability which had long existed in the form of jointstock associations or corporations or partnerships, and it is the duty of the court to apply the Sherman Law as an evolutionary statute, and not assume a revolutionary purpose in the mind of Congress in its enactment. These defendants have not violated the Sherman Law by monopolizing trade or commerce, although they in the aggregate enjoy large, but varying, proportions of the business in the products of tobacco. Monopolizing under the Sherman Law is an activity and not a state of being, and size, and the power that is inherent in size, whether size be considered in relation to investment or to the proportion of business at the time enjoyed, is not monopolizing or an element of monopolizing. Monopoly at common law was a license or privilege for the sole buying and sell`ing, making, working, or using of anything whatsoever, whereby the subject in general is restrained from that liberty in manufacturing or trading which he had before. 4 Blackstone, 159. Monopolizing under the statute carries with it the idea of exclusion, and whatever the magnitude of a concern may be, it is not guilty of monopolizing or attempting to monopolize unless it is doing something by which there is either attained or attempted this result, towit, that "the subject in general is restrained from that liberty of trading which he had before." See dissenting opinion of Mr. Justice Holmes in Northern Securities Case, 193 U. S. 409; In re Greene, 52 Fed. Rep. 115; Chemical Co. v. Providence Co., 64 Fed. Rep. 946, 949; Whitwell v. Continental Tob. Co., 125 Fed. Rep. 462; United States v. Reading Co., 183 Fed. Rep. 427. This is true not only with respect to this statute, but it is so recognized at common law and among economic writers. Mogul Co. v. McGregor, L. R. 23 Q. B. 598, 618; Oakdale v. Garst, 18 R. I. 484; Prof. Ely's "Monopolies and Trusts," 34; Clark's Control of Trusts, 6. 221 U.S. Argument for the American Tobacco Co. These defendants have not, either singly or in combination, excluded or attempted to exclude anyone from trade and commerce. (a) They have not cornered nor attempted to corner the supply of raw material; it is a matter of serious doubt whether such corner or attempting to corner would fall within the inhibition of the Sherman Law, or within the constitutional power of Congress, as being an act of, or direct in its effect on, interstate commerce, even if the record disclosed it. But decisions as to those questions are not necessary to an adjudication of this case. (b) Defendants have not enjoyed rebates or other preference in transportation; (c) they have not enjoyed exclusive advantage in the use of machinery and facilities for manufacturing; (d) they have not excluded nor attempted to exclude competitors from the avenues of distribution-marketing their products. It is impossible to conceive of exclusion or attempt to exclude competitors from trade that does not involve one or the other of the foregoing methods or avenues. The defendants have met active competition, and in meeting it have adopted the ordinary methods of competition. To give a construction to the Sherman Law, intended as it is to foster competition, that would forbid the usual methods of competition, would make the statute self-destructive. Competition, it is often said, is the life of trade, but the object of all competition is to drive out other competitors. To say that a man is to trade freely, but that he is to stop short of any act which is calculated to harm other tradesmen and which is designed to attract business to his own shop would be a strange and impossible counsel of perfection. The rights of competitors are different from the rights of strangers to the trade, and conduct is justified on the part of the person or corporation who seeks to build his own business that would be unlawful if adopted by him whose only motive was the injury of another. Loewe v. Lawlor, supra; Bonsack Machine Co. v. Smith, 70 Fed. Rep. 383, 388; VOL. CCXXI-9 |