221 U. S. Argument for Appellants. reasonable doubt. In a civil suit under it, the degree is not so great, but the proof must be direct, plain and convincing. United States v. Trans-Missouri Freight Assn., 58 Fed. Rep. 77; Northern Securities Co. v. United States, 193 U. S. 197, 401; State v. Continental Tobacco Co., 177 Mississippi, 1. There is a distinction between private traders and railroad companies; and see also distinction under Sherman Act between quasi-public corporations and private traders. Trans-Missouri Case, 166 U. S. 290. The mere method in which stocks are held is not prescribed by the Sherman Act; all methods are lawful if not used to restrict trade or gain an unlawful monopoly. Under the court's ruling the effectiveness of a large business organization may, by reason of that very fact, bring it under the Sherman Act. The decree below was not justified by the facts found by the court; or by the Sherman Act; after the court in § 5 permitted the distribution among the shareholders of the Standard Oil Company of New Jersey of the stocks held by that company, it did without lawful authority so to do, define and limit the method of that distribution; restrict the distributees in the future sale, use and disposal of their stocks; restrict the distributees in the sale, use and disposal of their properties; and in the contract relations thereafter to exist, as well as the use and disposition of the different properties in such a drastic manner as to greatly injure and destroy the value of the same and render their future profitable use practically impossible. The decree disintegrates properties built with appellants' moneys for joint use so as to create units that never before existed and compels these units separately to carry on business and compete with other units, directly contrary to the purpose of their creation. It allows the future operation and use of the refineries, pipe lines, and other properties of the appellants only under the vague and Argument for Appellants. 221 U. S. indefinite, but broad and comprehensive, terms of § 6 of the decree, by subjecting those who in the future operate them to attachment for contempt for unwittingly violating vague and indefinite terms. It prohibits appellants from engaging in all interstate commerce until the discontinuance of the operation of the illegal combination, thus inflicting a new penalty for an indefinite and uncertain period. All of such restrictions are unauthorized by the Sherman Act, are in violation of the settled rules governing injunctions, and are contrary to the provisions of the different decrees heretofore approved by this court under the Sherman Act, and especially the one in the Northern Securities Case. The decree authorized by the Sherman Act is wholly negative, and one that merely enjoins-stops an illegal thing in operation when the petition is filed or which then is foreseen. Lacassagne v. Chapius, 144 U. S. 124; E. C. Knight Co. Case, 156 U. S. 1, 17; Harriman v. Northern Securities Co., 197 U. S. 244, 289; Swift & Co. v. United States, 196 U. S. 375, 402; United States v. Reading Co., decided by Circuit Court of the Third Circuit, December 8, 1910. The Sherman Act prescribes certain specific methods of relief which are exclusive of all others. Noyes on Intercorporate Relations, 2d ed., 1909, § 406; Greer, Mills & Co. v. Stoller, 77 Fed. Rep. 1, 3; Minnesota v. Northern Securities Co., 194 U. S. 48, 71; Barnet v. National Bank, 98 U. S. 555, 558; East Tennessee R. R. Co. v. Southern Tel. Co., 112 U. S. 306, 310; Farmers' Bank v. Dearing, 91 U. S. 29, 35; United States v. Union Pacific Railroad Co., 98 U.S. 569. The decree hampers and greatly injures the value of the stock of the stockholders, though they are not parties to the bill. A corporation, when party to a bill in equity, does rep 221 U.S. Argument for Appellants. resent its stockholders, but only within the scope of corporate power, and not as to the individual rights of the stockholder to do with his property as he chooses. Taylor & Co. v. Southern Pacific Co., 122 Fed. Rep. 147, 153, 154. A corporation has no right to conclude or affect the right of any shareholder in respect of the ownership or incidents of his particular shares. Brown v. Pacific Mail Steamship Co., Fed. Cas. No. 2025; 5 Blatch. 525; Morse v. Bay State Gas Co., 91 Fed. Rep. 944, 946; Harriman v. Northern Securities Co., 197 U. S. 244, 288-290. The decree follows the appellants and their properties after the dissolution. The Sherman Act closely limits and defines the power of the court on a petition filed to give equitable relief. The petition must pray that such violations shall be enjoined or otherwise prohibited; and it is these violations of the act that the court may now enjoin, and only such violations. Past unlawful competition does not deprive parties of their right to conduct lawful competition. New Haven R. R. Case, 200 U. S. 361, 404. The Sherman Act does not give power to the courts to strike down and disintegrate a non-competing group of physical properties used to manufacture an article of trade. These physical properties are bought and held and used under state laws; they do not enter into interstate commerce and hence are not under Federal control. New Haven R. R. Co. v. Interstate Com. Comm., 200 U. S. 361, 404; State v. Omaha Elevator Co., 75 Nebraska, 637. The effect of the decree is ruinous. For instance, these companies jointly own 54,616 miles of pipe lines, of which the seven individual defendants and their associates built over 50,000 miles, in which they have an investment of over $61,000,000. The decree splits up this pipe line system into eleven parts, takes away from the owners, who jointly built the pipe lines and who created the sub-companies, all control VOL. CCXXI-2 Argument for Appellants. 221 U.S. over the different sub-companies, and compels the eleven different parts to stand alone, independently of their principal and of each other, to be hostile to and to compete with their principal and with one another. Pipe lines are never parallel but always continuous, and each line has a value which depends wholly upon its connection with other parts of the system, and whether all are used together as one whole. The carrying out of the decree would cut the pipe line system into isolated segments, prevent such use, and make the successful operation of the pipe lines impossible. The decree would especially destroy the value of the stock of all shareholders who each had five shares or less. The stockholders on August 19, 1907, holding from one to four shares each numbered 1,157, and the stockholders owning five shares each numbered 439, out of a total number of 5,085 stockholders. Considering the case de novo, and not on the findings of the court below, it is not true that when the petition in this case was filed in 1906, the seven individual appellants and their associates, private traders in oil, were, contrary to the provisions of the Sherman Act, carrying on a conspiracy to restrain interstate and foreign trade in oils, and to gain by illegal means a monopoly thereof. The Federal law allowed and allows each of the individuals to compete freely for the interstate and foreign traffic in oil and its products. He may use all the weapons that his ingenuity and skill can suggest, to wage a successful warfare. His rights to compete are not limited to merely such means as are fair or reasonable, but are only limited to such as are unlawful and directly tend to the violation of the Sherman Act. The Federal law also allows and assures to each competitor whatever share, however large, of the interstate or foreign trade in oil he or they may win provided his means are not unlawful. The Sherman Act was passed to protect trade and further 221 U.S. Argument for Appellants. competition. It makes such restraint and monopoly a crime and inflicts, on conviction, severe penalties for such offense. It permits one set of competitors to purchase the property of other competitors solely to avoid further competition. The mere size of the competing corporations or combinations is immaterial. The monopoly of a trade at common law was forbidden because, and only because, it excluded all others from practicing such trade, and seems to have been then limited to a royal grant, as, for example, giving the exclusive right to manufacture playing cards. It was and is a distinct thing from engrossing, regrating or forestalling the market, all of which were based on the prevention of artificial prices for the necessaries of life. No one of these falls under Federal jurisdiction, but each is subject to state control only. The present litigation is between the Federal Government and certain of its citizens. The questions involved are solely the rights of these Federal citizens and the effect upon those rights of the Sherman Act, and whether these Federal citizens have violated the provisions of that act. There was and is no such thing as a Federal crime, aside from express congressional acts, and as no such act was in existence prior to 1890, as to the matters charged in the petition, all the matters and things done by the defendants prior thereto are immaterial. This case involves, and only involves, the question of the restraint and monopolization of interstate and foreign trade in oil in November, 1906, when the petition was filed; it does not involve any alleged restraint or monopoly of the oil industry in any of the States. The appellants were lawfully entitled to so hold and use in interstate trade all of its combined properties. To succeed in this case, the Government must also show that the said Standard Oil Company was then in 1906 |