Argument for the United States. 221 U.S. using its power to actually restrain interstate or foreign trade in oil, or was then in 1906 excluding or attempting to exclude by illegal means others from said trade and attempting to monopolize the same, or a part thereof. The Sherman Act does not compel private traders, however organized, to compete with each other. The character of the oil business was and is such that a great corporation was and is an economic necessity for carrying on that industry. The growth and success of the Standard Oil Company was the result of individual enterprise and the natural laws of trade. It was not the result of unlawful means, but of skill, unremitting toil, denials and hardships, and is an instance of where the continuous use for forty years of skill, labor and capital reached a great success. To prove a violation of § 1 of the Sherman Act the Government must clearly show that when the petition was filed appellants were then actually restraining interstate trade in oil. To prove a monopoly under § 2 of the Sherman Act, the Government must show that the appellants were, when the petition was filed, then using unlawful means to maintain their control of the industry and that the appellants were then by unlawful means excluding others from said industry. The Attorney General and Mr. Frank B. Kellogg, with whom Mr. Cordenio N. Severance was on the brief, for the United States: It is immaterial that this conspiracy had its inception prior to the enactment of the Sherman Law, or that many of the rebates and discriminations granted by the railroads which enabled the defendants to monopolize the commerce in petroleum antedated the enactment of the Interstate Commerce Act; the principles of the common law applied to interstate as well as to intrastate com 221 U.S. merce. Argument for the United States. Western Union Telegraph Co. v. Call Pub. Co., 181 U. S. 92; Murray v. C. & N. W. R. Co., 62 Fed. Rep. 24; Interstate Com. Comm. v. B. & O. R. Co., 145 U. S. 263; Bank of Kentucky v. Adams Express Co., 93 U. S. 174; National Lead Co. v. Grote Paint Store Co., 80 Mo. App. 247; People v. Chicago Gas Trust, 130 Illinois, 268; Richardson v. Buhl, 77 Michigan, 632; State v. Nebraska Distilling Co., 29 Nebraska, 700; Distilling & Cattle Feeding Co. v. People, 156 Illinois, 448. From the earliest date these various corporations were held together by trust agreements which were void at common law. But whether they were void or not, the combination was a continuing one; there was no vested right by reason of the acquisition of these stocks by the trustees, and when the Sherman Act was passed the continuance of the combination became illegal. United States v. Freight Association, 166 U. S. 290, cited and approved in Waters-Pierce Oil Co. v. Texas, 212 U. S. 86; Thompson v. Union Castle Steamship Co., 166 Fed. Rep. 251; United States v. American Tobacco Co., 164 Fed. Rep. 700; Finck v. Schneider Granite Co., 86 S. W. Rep. 221; Ford v. Chicago Milk Assn., 155 Illinois, 166. The Standard Oil Company, through various defendant subsidiary corporations is engaged in producing and purchasing crude petroleum in Pennsylvania, West Virginia, Ohio, Indiana, Illinois, Oklahoma, Kansas and California; in transporting the same by pipe lines from the States in which the same is produced into the various other States to the manufactories of the various defendants; in manufacturing the same into the products of petroleum and transporting those products, largely in the tank cars of the Union Tank Line Company (controlled by the Standard Oil Company of New Jersey) to the various marketing places throughout the United States, and in selling and disposing of the same. This clearly makes the defendants engaged in interstate commerce. Swift & Co. v. Argument for the United States. 221 U.S. United States, 196 U. S. 375; Shawnee Compress Co. v. Anderson, 209 U. S. 423; Loewe v. Lawlor, 208 U. S. 274. The amalgamation of the stocks of all these companies in 1899 in the Standard Oil Company of New Jersey as a holding corporation was a combination in restraint of trade within § 1 of the Sherman Act. United States v. Northern Securities Co., 193 U. S. 197; Harriman v. Northern Securities Co., 197 U. S. 244; Shawnee Compress Co. v. Anderson, 209 U. S. 423; Swift & Co. v. United States, 196 U. S. 375; Loewe v. Lawlor, 208 U. S. 274; Continental Wall Paper Co. v. Voight, 148 Fed. Rep. 939; 212 U. S. 227; Burrows v. Inter. Met. Co., 156 Fed. Rep. 389; Montague v. Lowry, 193 U. S. 38; Distilling & Cattle Feeding Co. v. People, 156 Illinois, 48; Harding v. Am. Glucose Co., 55 N. E. Rep. 577; Dunbar v. American Tel. & Teleg. Co., 79 N. E. Rep. 427; Missouri v. Standard Oil Co., 218 Missouri, 1; Merchants' Ice & Cold Storage Co. v. Rohrman, 128 S. W. Rep. 599; State v. International Harvester Co., 79 Kansas, 371; International Harvester Co. v. Commonwealth, 124 Kentucky, 543; State v. Creamery Package Mfg. Co., 126 N. W. Rep. 126. The Northern Securities Case and other authorities cited under this head are conclusive of the proposition that this is a combination in restraint of trade. The court held that the inhibitions of the Sherman Act were not limited to those direct restraints upon trade and commerce evidenced by contracts between independent lines of railway to fix rates or to maintain rates, or manufacturing or other corporations to limit the supply or control prices; that the power of suppression of competition and therefore of restraint of trade exercised or which could be exercised by reason of stock ownership and control of the various corporations, was as much in violation of the Anti-trust Act as direct restraint by contract. There is nothing in the act which can be construed to prohibit the suppression of competition by reason of stock control of railways 221 U.S. Argument for the United States. and at the same time to permit it in manufacturing industries, pipe line companies, or car line companies engaged in the manufacture and transportation of oil. The contracts, combinations in the form of trusts or otherwise, or conspiracies in restraint of trade, which are inhibited by the first section of the act as applied to these classes of corporations cannot be distinguished from those contracts, combinations in the form of trusts or otherwise, or conspiracies in restraint of trade, when applied to railway companies. The thing inhibited is the restraint of interstate commerce. The thing to be accomplished is the maintenance of the freedom of trade. The inhibition against the suppression of competition by any instrumentality, scheme, plan or device, to evade the act, applies to all corporations and all devices. The real point is not the instrumentality or the scheme used to suppress the competition, but whether competition is thus suppressed and trade restrained and monopolized. Nowhere in the decisions of this court is there authority for the proposition that combinations by stock ownership or the purchase of competing properties is invalid as to railroads but valid as to trading and manufacturing companies. The act of Congress and the decisions of this court, so far as the principle goes, places them upon the same plane. In the argument of the Freight Association cases it was urged by counsel that the inhibitions of the Sherman Act in this regard did not apply to railroads, but only included trading companies. It is now urged that they apply to railroads and do not apply to manufacturing and trading companies. But this court in the Freight Association cases clearly laid down the rule that while there are points of difference existing between the two classes of corporations, yet they are all engaged in interstate commerce, that the injuries to the public have many common features, and that the inhibitions apply to all. 166 U. S. 322. Argument for the United States. 221 U.S. The transfer of the stocks of these companies in 1899 to the Standard Oil Company of New Jersey had no greater legal sanctity than the transfer to the trustees in 1882, nor was it different from the transfer of the stocks of the Northern Pacific and Great Northern Railways to the Northern Securities Company in 1901, two years after the organization of the present corporate Standard Oil combination. It is the usual course of reasoning urged in all of these trust cases-because a person has a right to purchase property, he may therefore purchase a competitor, and because he may purchase one competitor he may purchase all of his competitors, and what an individual may do a corporation may do. These were the identical arguments pressed with great ability by counsel in the Northern Securities Case and in the subsequent case of Harriman v. Northern Securities Co., 197 U. S. 291; but this court held to the contrary. The position is also contrary to the almost universal trend of the American decisions both Federal and state. The exercise of an individual right disconnected from all other circumstances may be legal, but when taken together with the other circumstances may accomplish the prohibited thing. The second section of the act prohibits a person or a single corporation from monopolizing or attempting to monopolize any part of the commerce of the country by any means whatever, and also from conspiring with any other person or persons to accomplish the same object. The two sections of the act were manifestly not intended to cover the same thing; otherwise the second section would be useless. Any contract or combination in the form of a trust or otherwise, or conspiracy in restraint of trade which tends to monopoly is prohibited by the first section. Addyston Pipe Case, 175 U. S. 211; United States v. Northern Securities Co., 193 U. S. 334. The question then is: What is the meaning of the word "monopoly," as used in the second section of the act? |