[Syllabus, Complaint, and Answer from pages 197-257 intentionally omitted]

Mr. George B. Young argued the cause and filed a brief for appellant the Northern Securities Company:

[Argument of Counsel from Pages 257-265 intentionally omitted]

The government is not entitled to maintain this proceeding, nor had the circuit court jurisdiction of it; for the conspiracy or combination charged in the petition and found by the circuit court, if it ever existed, had done all it was formed to do, and had come to an end, before the proceeding was instituted.

The only combination of which there is any evidence is a combination formed in aid of commerce, to liberate, protect, and enlarge, and not to restrain it, and which has liberated, protected, aided, and enlarged it, and has not restrained, and does not threaten to restrain it.

All the facts and circumstances are to be considered in order to determine the fundamental question whether the necessary effect of the combination is to restrain interstate commerce.

Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 245, 44 L. ed. 136, 149, 20 Sup. Ct. Rep. 96; Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 68, 22 L. ed. 315, 318.

The law of self-defense and protection applies to one's business as well as to one's person.

United States Chemical Co. v. Provident Chemical Co. 64 Fed. 946.

The combination here is analogous to the covenant of the seller of a business that he will not engage in it, which has been declared not to testrain trade.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 329, 41 L. ed. 1007, 1023, 17 Sup. Ct. Rep. 540.

If this combination is to be adjudged a combination and conspiracy in restraint of commerce, there is scarcely an agreement or contract among business men that cannot be said to have, indirectly or remotely, some bearing upon interstate commerce, and possibly to restrain it.

Hopkins v. United States, 171 U. S. 578, 600, 43 L. ed. 290, 299, 19 Sup. Ct. Rep. 40.

Congress did not attempt by the antitrust act to limit and restrict the rights of corporations created by the states, or of citizens of the states, in the acquisition or disposition of property, or to make criminal the acts of persons in the acquisition and control of property, which the states of their residence or creation sanctioned or permitted.

United States v. E. C. Knight Co. 156 U. S. 1, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249.

At common law a cessation or diminution of competition, springing from a unity of ownership,—as, where one competitor sold his business to another, or both sold out to a third person, etc., was never regarded as a restraint of trade; such cessation or diminution being incident to the union of property or business in one ownership, and not a restraint imposed by contract.

And so such purchases, or agreements to purchase, have never been held contracts in restraint of trade.

Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

The formation of corporations for business or manufacturing purposes has never been regarded as in the nature of a contract in restraint of trade or commerce. The same may be said of the contract of partnership.

United States v. Joint Traffic Asso. 171 U. S. 505, 567, 43 L. ed. 259, 286, 19 Sup. Ct. Rep. 25.

The only question is, Does the contract or combination itself, or do the things the parties contracted to do, restrain commerce? If they do, the parties are criminals, however good their motives. If they do not, the parties are innocent, however reprehensible their designs.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 341, 41 L. ed. 1007, 1027, 17 Sup. Ct. Rep. 540; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 234, 44 L. ed. 136, 145, 20 Sup. Ct. Rep. 96.

The power to suppress competition is not of itself suppression.

State v. Northern Securities Co. 123 Fed. 592.

The position of the government rests on a wholly erroneons view of the relations of the shareholders of a railway company to the commerce of the company, and of the power of a majority of the shareholders to restrain or otherwise control that commerce.

Hoyt v. Thompson, 19 N. Y. 207; Burrill v. Nahant Bank, 2 Met. 163, 35 Am. Dec. 395; Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U. S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194.

A monopoly of trade embraces two essential elements: (1) The acquisition of an exclusive right to or the exclusive control of the trade; and (2) the exclusion of all others from that right and control.

United States v. Trans-Missouri Freight Asso. 7 C. C. A. 15, 19 U. S. App. 36, 4 Inters. Com. Rep. 443, 58 Fed. 58.

An attempt to monopolize any part of the trade or commerce among the states must be an attempt to secure or acquire an exclusive right to such trade or commerce by means which prevent or restrain others from engaging therein.

Re Greene, 52 Fed. 104.

Monopolies are liable to be oppressive, and hence are deemed to be hostile to the public good. But combinations for a mutual advantage, which do not amount to a monopoly, but leave the fleld open to others, are within neither the reason nor the operation of the rule.

Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

The anti-trust act and the regulative power of Congress under the commerce clause of the Constitution are alike strictly confined to matters which directly and immediately affect interstate or foreign commerce.

United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; United States v. Trans-Missouri Freight Asso. 166 U. S. 291, 41 L. ed. 1011, 17 Sup. Ct. Rep. 540; United States v. Joint Traffio Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Hopkins v. United States, 171 U. S. 578, 594, 43 L. ed. 290, 296, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U. S. 604, 43 L. ed. 300, 19 Sup. Ct. Rep. 50; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

A state may not tax railway earnings from transportation as such, for that is taxing the commerce, and is a direct regulation of it.

Fargo v. Michigan, 121 U. S. 230, 30 L. ed. 888, 1 Inters. Com. Rep. 51, 7 Sup. Ct. Rep. 857; Philadelphia & S. Mail S. S. Co. v. Pennsylvania, 122 U. S. 326, 338, 30 L. ed. 1200, 1202, 1 Inters. Com. Rep. 308, 7 Sup. Ct. Rep. 1118.

But it may tax the tolls received by a local railroad company for the use of part of its road by another company engaged in interstate commerce; for this is a tax on property, and not on commerce. Any increase of rates by the carrying company, consequent on a raising of the tolls because of the tax, is 'too remote and indirect' to make the act a regulation of commerce.

New York, L. E. & W. R. Co. v. Pennsylvania, 158 U. S. 431, 39 L. ed. 1043, 15 Sup. Ct. Rep. 896.

A state may tax the franchise of a foreign corporation upon a valuation measured by gross receipts from interstate and foreign as well as domestic commerce. This is not a direct regulation; the tax is not laid on the commerce itself.

Maine v. Grand Trunk R. Co. 142 U. S. 217, 35 L. ed. 994, 3 Inters. Com. Rep. 807, 12 Sup. Ct. Rep. 121, 163.

A law imposing a privilege tax of $50 on every sleeping car running over the railroads of the state is void as to cars used in interstate transportation, for it is a direct regulation of commerce.

Pickard v. Pullman Southern Car Co. 117 U. S. 34, 29 L. ed. 785, 6 Sup. Ct. Rep. 635.

But the state may tax the same cars, not because used in commerce, but because within the state, as property in the state; and the tax may take the form of a tax on the company's capital. Here the tax is laid directly on the property of the company,—its cars,—and not on the use of the cars in interstate commerce; and if it regulates such commerce at all, it does so indirectly.

Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 25, 35 L. ed. 613, 617, 3 Inters. Com. Rep. 595, 11 Sup. Ct. Rep. 876.

A state may not tax United States bonds as such. It may not tax an individual or corporation on the value of the bonds held by him, for this would be to tax the bonds directly. But shares in a national bank are taxable by a state at their full value, like other property, no matter how much of the bank's capital is invested in United States bonds. Such tax does not fall directly on the bonds.

Van Allen v. The Assessors, 3 Wall. 575, 18 L. ed. 229.

If the power to regulate interstate commerce applied to all the incidents to which said commerce might give rise, and to all contracts which might be made in the course of its transaction, that power would embrace the entire sphere of mercantile activity in any way connected with trade between the states, and would exclude state control over many contracts purely domestic in their nature.

Hooper v. California, 155 U. S. 648, 655, 39 L. ed. 297, 300, 5 Inters. Com. Rep. 610, 15 Sup. Ct. Rep. 207; Williams v. Fears, 179 U. S. 270, 278, 45 L. ed. 186, 190, 21 Sup. Ct. Rep. 128.

A complete bar to the government's attempted encroachment on the rights of the states and their citizens is found in Pearsall v. Great Northern R. Co. 161 U. S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705, and Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. ed. 849, 16 Sup. Ct. Rep. 714.

Congress, when passing the act, knew that the railway system of the country rested on consolidations, actual or virtual, authorized by state laws, some of them having existed many years.

Chesapeake & P. Teleph. Co. v. Manning, 186 U. S. 238, 245, 46 L. ed. 1144, 22 Sup. Ct. Rep. 881.

These are also matters within the judicial knowledge of the court.

Ohio L. Ins. & T. Co. v. Debolt, 16 How. 416, 435, 14 L. ed 997, 1005; Baltimore & O. R. Co. v. Maryland, 21 Wall. 456, 469, 22 L. ed. 678, 683; Brown v. Piper, 91 U. S. 37, 42, 23 L. ed. 200, 202; Phillips v. Detroit, 111 U. S. 604, 606, 28 L. ed. 532, 533, 4 Sup. Ct. Rep. 580; Lehigh Valley R. Co. v. Pennsylvania, 145 U. S. 192, 201, 36 L. ed. 672, 675, 4 Inters. Com. Rep. 87, 12 Sup. Ct. Rep. 806; Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 699, 40 L. ed. 849, 858, 16 Sup. Ct. Rep. 714; Preston v. Browder, 1 Wheat. 115, 121, 4 L. ed. 50, 51; United States v. Union P. R. Co. 91 U. S. 72, 79, 23 L. ed. 224, 228; Platt v. Union P. R. Co. 99 U. S. 48, 25 L. ed. 424; Chesapeake & P. Teleph. Co. v. Manning, 186 U. S. 238, 245, 46 L. ed. 1144, 1147, 22 Sup. Ct. Rep. 881.

If Congress had meant to declare such consolidations and stock purchases of competing companies to be illegal, the securities issued by them void, and the state legislation unconstitutional, it would have said so in plain, specific, and apt language.

There can be no question but that every combination declared illegal by the act would have been equally so—no more, no less before the act.

Re Debs, 158 U. S. 564, 581, 39 L. ed. 1092, 1101, 15 Sup. Ct. Rep. 900; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 229, 44 L. ed. 136, 143, 20 Sup. Ct. Rep. 96.

[Argument of Counsel from pages 265-268 intentionally omitted]

Mr. John G. Johnson also argued the cause and filed a brief for appellant the Northern Securities Company:

[Argument of Counsel from pages 268-270 intentionally omitted]

The acts which can be prevented and restrained by proceedings in equity are those, and those alone, made criminal by the 1st and 2d sections of the Sherman act.1 The statute is therefore a penal one, defining a criminal offense, for which it provides a punishment. It is an indispensable prerequisite to a conviction for a criminal misdemeanor,—especially if there be no criminal intent, and such did not exist in the present case,—that the offense condemned shall be clearly defined.

United States v. Wiltberger, 5 Wheat. 76, 5 L. ed. 37; United States v. Whittier, 5 Dill. 35, Fed. Cas. No. 16,688; Andrews v. United States, 2 Story, 213, Fed. Cas. No. 381; United States v. Hartwell, 6 Wall. 385, 396, 18 L. ed. 830, 832; Swearingen v. United States, 161 U. S. 446, 451, 40 L. ed. 765, 16 Sup. Ct. Rep. 562; France v. United States, 164 U. S. 676, 682, 41 L. ed. 595, 597, 17 Sup. Ct. Rep. 219; The Paulina v. United States, 7 Cranch, 61, 3 L. ed. 269; United States v. Reese, 92 U. S. 219, 23 L. ed. 565; United States v. Comerford, 25 Fed. 902; United States v. Chase, 135 U. S. 255, 261, 34 L. ed. 117, 119, 10 Sup. Ct. Rep. 756; United States v. Goldenberg, 166 U. S. 102, 42 L. ed. 398, 18 Sup. Ct. Rep. 3; Sarlls v. United States, 152 U. S. 570, 575, 38 L. ed. 556, 558, 14 Sup. Ct. Rep. 720.

The meaning of the words, 'contracts in restraint of trade,' was thoroughly understood in jurisprudence and in business when the Sherman act was passed. It was not the intention of Congress to create any new offense.

United States v. Trans-Missouri Freight Asso. 166 U. S. 328, 41 L. ed. 1023, 17 Sup. Ct. Rep. 540.

The Sherman act does not apply to the formation of a corporation to carry on any particular line of business by those already engaged therein, or to a contract of partnership or of employment between two persons previously engaged in the same line of business.

United States v. Joint Traffic Asso. 171 U. S. 567, 43 L. ed. 286, 19 Sup. Ct. Rep. 25.

The idea of monopoly involves something more than a mere acquisition of the whole, or of the major part, of a commodity or of shares of stock. It involves the idea of exclusion of other supply, as well as inclusion of what is actually acquired.

Re Greene, 52 Fed. 104; Charles River Bridge v. Warren Bridge, 11 Pet. 606, 9 L. ed. 847; 20 Am. & Eng. Enc. Law, p. 846; 2 Bouvier, Law Dict. Rawle's ed. p. 435; 4 Bl. Com. 159; Century Dict. Monopoly; United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

The purchase by one person of the property of his rival, with the intention thereby to destroy his competition, is not illegal, although by the purchase he will acquire the power to prevent the same.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. ed. 315.

The power of Congress to regulate commerce does not confer upon it a right to prescribe the persons who may engage therein, or to regulate or control the ownership of shares of stock of corporations which engage therein.

United States v. E. C. Knight co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 294.

That construction of a statute should be adopted which, without doing violence to the fair meaning of the words used, brings it into harmony with the Constitution.

Grenada County v. Brogden, 112 U. S. 28 L. ed. 704, 5 Sup. Ct. Rep. 125.

In interpreting a statute the intention of the law-making power will prevail even against the letter of the statute. A thing may be within the letter of the statute, and not within its meaning, or within its meaning, though not within its letter.

Hawaii v. Mankichi, 190 U. S. 197, 47 L. ed. 1016, 23 Sup. Ct. Rep. 787.

In Baltimore & O. R. Co. v. Maryland, 21 Wall. 456, 22 L. ed. 678, a stipulation in the charter of a railroad company, that the company should pay to the state a bonus, or a portion of its earnings, was held, not repugnant to the Constitution of the United States.

In Ashley v. Ryan, 153 U. S. 436, 38 L. ed. 773, 4 Inters. Com. Rep. 664, 14 Sup. Ct. Rep. 865, a state was permitted, in allowing consolidation between corporations of different states, to charge upon the new consolidated company a percentage on its entire authorized stock as a fee, inasmuch as, without the franchises conferred by the state, it could not exist; and such charge was not an interference with interstate commerce.

The relief decreed was improper under any aspect of the case.

United States v. E. C. Knight Co. 156 U. S. 1, 17, 39 L. ed. 325, 331, 15 Sup. Ct. Rep. 249.

Mr. Charles W. Bunn argued the cause and filed a brief for appellant the Northern Pacific Railway Company:

The power of Congress has never been more accurately or completely described than by Chief Justice Marshall in Gibbons v. Ogden, 9 Wheat. 1, 189, 190, 6 L. ed. 23, 68: 'Commerce, undoubtedly, is traffic, but it is something more,—it is intercourse. It describes the commercial intercourse between nations and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse.'

This definition has been frequently repeated by the court.

Passenger Cases, 7 How. 283, 394, 462, 12 L. ed. 702, 748, 777; Henderson v. Wickham, 92 U. S. 259, 270, 23 L. ed. 543, 548; Lottery Case, 188 U. S. 321, 346, 47 L. ed. 492, 497, 23 Sup. Ct. Rep. 321.

The power of Congress is only to regulate, and is the power to prescribe the rule by which commerce is to be governed.

Gibbons v. Ogden, 9 Wheat. 196, 6 L. ed. 79.

The interstate commerce power of Congress justifies only such regulations as act upon that commerce directly, and does not authorize regulations abridging the police powers of the states or the personal rights and privileges of individuals, if they affect that commerce only indirectly, remotely, incidentally, and collaterally.

Re Greene, 52 Fed. 104; United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; Gibbons v. Ogden, 9 Wheat. 203, 6 L. ed. 71; United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; Hopkins v. United States, 171 U. S. 592, 43 L. ed. 296, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U. S. 615, 43 L. ed. 305, 19 Sup. Ct. Rep. 50; Sherlock v. Alling, 93 U. S. 99, 23 L. ed. 819; Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 701, 40 L. ed. 849, 16 Sup. Ct. Rep. 714.

If the decision of the circuit court is correct, all the state laws either forbidding or authorizing consolidations of interstate carriers are and always have been void.

Cooley v. Port Wardens, 12 How. 299, 13 L. ed. 996; Cushing v. The John Fraser, 21 How. 184, 16 L. ed. 106; Pound v. Turck, 95 U. S. 459, 24 L. ed. 525; Robbins v. Shelby County Taxing Dist. 120 U. S. 492, 30 L. ed. 695, 1 Inters. Com. Rep. 45, 7 Sup. Ct. Rep. 592; Mobile County v. Kinball, 102 U. S. 691, 26 L. ed. 238; United States v. E. C. Knight Co. 156 U. S. 11, 12, 39 L. ed. 328, 329, 15 Sup. Ct. Rep. 249; Addyston Pipe & Steel Co. v. United States, 175 U. S. 230, 44 L. ed. 143, 20 Sup. Ct. Rep. 96.

Except as it punishes contracts, combinations, and conspiracies, the statute intreduces no new rule of law. Whatever is a restraint of commerce now was such before this statute. The act is new only in making the preliminary conspiracy a crime.

Re Debs, 158 U. S. 564, 39 L. ed. 1092, 15 Sup. Ct. Rep. 900; Addyston Pipe & Steel Co. v. United States, 175 U. S. 230, 44 L. ed. 143, 20 Sup. Ct. Rep. 96.

If a thing restrains interstate commerce, it is immaterial with what innocent intent it may be done. On the other hand, if the thing complained of does not restrain interstate commerce, it is immaterial how evil may be the intent.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 341, 41 L. ed. 1007, 1027, 17 Sup. Ct. Rep. 540.

If an action be lawful, it is elementary that its purpose is immaterial.

Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; Phelps v. Nowlen, 72 N. Y. 39, 28 Am. Rep. 93; Kiff v. Youmans, 86 N. Y. 324, 40 Am. Rep. 543; Wood v. Amory, 105 N. Y. 278, 11 N. E. 636; Lough v. Outer-bridge, 143 N. Y. 271, 25 L. R. A. 674, 38 N. E. 292; Adler v. Fenton, 24 How. 407, 410, 16 L. ed. 696, 697; United States v. Greenhut, 51 Fed. 205; Re Greene, 52 Fed. 104; Randall v. Hazelton, 12 Allen, 412; Brackett v. Griswold, 112 N. Y. 454, 20 N. E. 376; United States v. Isham, 17 Wall. 496, 21 L. ed. 728; Dickerman v. Northern Trust Co. 176 U. S. 181, 44 L. ed. 423, 20 Sup. Ct. Rep. 311; Fahrney v. Kelly, 102 Fed. 403; Mogul S. S. Co. v. McGregor [1892] A. C. 25, 41; Allen v. Flood [1898] A. C. 1.

If buying and voting the stock restrains interstate commerce, it is illegal. If it does not restrain interstate commerce, it is legal; and the conspiracy behind the formation of the company was a conspiracy to do a lawful thing.

Bohn Mfg. Co. v. Hollis, 54 Minn. 223, sub nom. Bohn Mfg. Co. v. Northwestern Lumbermen's Asso. 21 L. R. A. 337, 55 N. W. 1119.

A combination may destroy competition without restraining trade.

United States v. Joint Traffic Asso. 171 U. S. 567, 43 L. ed. 286, 19 Sup. Ct. Rep. 25; United States v. Addyston Pipe & Steel Co. 46 L. R. A. 122, 29 C. C. A. 141, 54 U. S. App. 744, 85 Fed. 271.

The business of a rival in trade may be purchased for the very purpose of being rid of his competition.

Gamble v. Queens County Water Co. 123 N. Y. 91, 9 L. R. A. 527, 25 N. E. 201; Diamond Match Co. v. Roeber, 106 N. Y. 473, 60 Am. Rep. 464, 13 N. E. 419; Rafferty v. Buffalo City Gas Co. 37 App. Div. 618, 56 N. Y. Supp. 288; Trenton Potteries Co. v. Oliphant, 56 N. J. Eq. 680, 39 Atl. 923; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

Mr. John W. Griggs also filed a brief for appellant the Northern Securities Company:

In the division of authority with respect to interstate railways, Congress reserves to itself the superior right to control their commerce and forbid interference therewith, while to the states remains the power to create and to regulate the instruments of such commerce, so far as necessary to the conservation of the public interests.

Louisville & N. R. Co. v. Kentucky, 161 U. S. 702, 40 L. ed. 859, 16 Sup. Ct. Rep. 714.

The courts of the United States since the passage of the Sherman act have been called upon to restrain projected consolidations upon the ground that they were contrary to state statutes, but no suggestion has been made that the legislation of Congress expressed in the Sherman act had any bearing on the subject.

Pearsall v. Great Northern R. Co. 161 U. S. 648, 40 L. ed. 839, 16 Sup. Ct. Rep. 705; Louisville & N. R. Co. v. Kentucky, 161 U. S. 702, 40 L. ed. 859, 16 Sup. Ct. Rep. 714.

The power exists in each state, by appropriate enactments not forbidden by its own or the Federal Constitution, to regulate the relative rights and duties of all persons and corporations within its jurisdiction, so as to provide for the public convenience and the public good. State legislation relating to commerce is not to be deemed a regulation of interstate commerce simply because it may, to some extent or under some circumstances, affect such commerce.

Lake Shore & M. S. R. Co. v. Ohio, 173 U. S. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465.

In Missouri, K. & T. R. Co. v. Haber, 169 U. S. 613, 42 L. ed. 878, 18 Sup. Ct. Rep. 488, it was held that the authority given by § 5258 of the Revised Statutes of the United States2 to carry 'freight and property' over their respective roads from one state to another state did not authorize a railroad company to carry into a state cattle known, or which by due diligence might be known, to be in such condition as to impart or communicate disease to the domestic cattle of such state.

And it has been expressly adjudged that the above statutory provision was not intended to interfere with the authority of the states to enact such regulations with respect, at least, to a railroad corporation of its own creation, as were not directed against interstate commerce, but which only incidentally or remotely affected such commerce, and were not in themselves regulations of interstate commerce, but were designed reasonably to subserve the convenience of the public.

Lake Shore & M. S. R. Co. v. Ohio, 173 U. S. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465; Cleveland, C. C. & St. L. R. Co. v. Illinois, 177 U. S. 514, 44 L. ed. 868, 20 Sup. Ct. Rep. 722.

All that has been done, even as contended by the government, has been to concentrate the ownership of a majority of the shares of the two companies into one hand, the owner being a corporation controlled by the same men who would own and control a majority of the capital stock of both railroad companies if the holding company had not been formed.

The companies remain distinct; the stockholders are not the corporation; each company is just as much subject to all the requirements of the law as though its stock-holders were entirely different.

Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U. S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194.

When a contract, agreement, or arrangement of any kind is challenged as a combination in restraint of trade or commerce, the court will look at the form of the agreement, and if it appears on its face to have as a necessary and direct result the effect of restraining trade or commerce, no inquiry into the intention or motives of the parties is requisite.

United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

But if the arrangement is one which in itself is lawful, and is claimed to be invalid only because its ultimate object is to restrain commerce or competition, then it is necessary to examine the facts and circumstances to see if the forms of law are being used to further an illegal purpose.

United States v. Trans-Missouri Freight Asso. 166 U. S. 341, 41 L. ed. 1027, 17 Sup. Ct. Rep. 540; Hopkins v. United States, 171 U. S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 40; United States v. Workingmen's Amalgamated Council, 26 L. R. A. 158, 4 Inters. Com. Rep. 831, 54 Fed. 994; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; State ex rel. Atty. Gen. v. Shippers' Compress & Warehouse Co. (Tex. Civ. App.) 67 S. W. 1049, 95 Tex. 603, 69 S. W. 58.

In every instance where the Supreme Court has had occasion to pass upon the meaning of the Sherman act, it has been extremely careful to distinguish between acts which directly restrain commerce, and acts which only indirectly or incidentally have that effect.

United States v. E. C. Knight Co. 156 U. S. 1, 12, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249; United States v. Joint Traffic Asso. 171 U. S. 505, 566, 43 L. ed. 259, 286, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

Over internal commerce and trade Congress has no power of regulation, nor any direct control. This power belongs exclusively to the states. No interference by Congress with the business of citizens transacted within a state is warranted by the Constitution, except such as is strictly incidental to the exercise of powers clearly granted.

License Tax Cases, 72 U. S. 462, 18 L. ed. 497.

The fact that an article was manufactured for export to another state does not make it an article of interstate commerce.

Coe v. Errol, 116 U. S. 517, 29 L. ed. 715, 6 Sup. Ct. Rep. 475; Kidd v. Pearson, 128 U. S. 1, 32 L. ed. 346, 2 Inters. Com. Rep. 232, 9 Sup. Ct. Rep. 6.

In United States v. Boyer, 85 Fed. 425, acts of Congress empowering the Secretary of Agriculture to make inspection of cattle, etc., at slaughter houses located in the several states, the products of which were intended for sale in other states or foreign countries, were declared to be without any constitutional warrant, and therefore void, although the government sought to sustain them as a legitimate exercise of the commerce powers.

The sale of the stock of the two railroad corporations, no matter to whom it may be sold, nor how often such sales and transfers of the stock may take place, cannot, in any proper sense, be said to affect the transportation business carried on by the company.

Clarke v. Central R. & Bkg. Co. 66 Fed. 16; Re Greene, 52 Fed. 104; Pearsall v. Great Northern R. Co. 161 U. S. 646, 671, 40 L. ed. 838, 846, 16 Sup. Ct. Rep. 705; Rogers v. Nashville, C. & St. L. R. Co. 33 C. C. A. 517, 62 U. S. App. 49, 697, 91 Fed. 312.

The Sherman act is a penal statute; every act which may be prevented by injunctive order would, if committed and proved, subject the parties to criminal prosecution. The rule of strict construction must therefore be applied. United States v. Whittier, 5 Dill. 35, Fed. Cas. No. 16,688; United States v. Sheldon, 2 Wheat. 119, 4 L. ed. 199; United States v. Hartwell, 6 Wall. 395, 18 L. ed. 832; United States v. Shackford, 5 Mason, 445, Fed. Cas. No. 16,262; United States v. Clayton, 2 Dill. 219, Fed. Cas. No. 14,814; United States v. Garreston, 42 Fed. 22; Dwarris, Stat. 641; Hubbard v. Johnstone, 3 Taunt. 177.

Acquiescence by the government for more than eleven years in the actual merger and consolidation of many important parallel and competing lines on railroads and steamships engaged in interstate and international commerce has given a practical construction to the act of July 2, 1890,3 to the effect that it was not intended to forbid, and does not forbid, the natural processes of unification which are bronght about under modern methods of lease, consolidation, merger, community of interest, or ownership of stock.

Stuart v. Laird, 1 Cranch, 299, 2 L. ed. 115.

Mr. M. D. Grover filed a brief for appellant the Great Northern Railway Company:

The commerce clause of the Constitution of the United States does not take away from the several states the right to authorize the formation of corporations, define their business, fix the amount of their capital or purchasing power, and regulate the issue, sale, and ownership of their capital stock.

It has been the practice, since the infancy of railroads in this country, for one railroad company to purchase or lease the railroad of a competing company, or to acquire a majority of the shares of a competing company, or of two companies competing with each other, or to effect the consolidation of competing companies. This has been done without objection from any branch of the Federal government, and has invariably proved beneficial to the railway companies concerned, to their shareholders, and to the public.

Unity of ownership of shares of competing corporations engaged in interstate trade, does not restrain such trade, and is not forbidden by the anti-trust act, nor is such unity of ownership a regulation of interstate commerce, and thus subject to exclusive Federal jurisdiction under the commerce clause of the Constitution.

If the legislature undertakes to define a new offense by statute, and provide for its punishment, its will should be expressed in such language as not to deceive or mislead the common mind.

[Argument of Counsel from pages 280-287 intentionally omitted]

Tozer v. United States, 4 Inters. Com. Rep. 246, 52 Fed. 917; The Paulina v. United States, 7 Cranch, 61, 3 L. ed. 269; United States v. Reese, 92 U. S. 214, 23 L. ed. 563.

[Argument of Counsel from pages 287-290 intentionally omitted]

Messrs. Francis Lynde Stetson and David Willcox filed a brief for appellants Morgan, Bacon, and Lamont:

Each individual who has transferred his property to the Securities Company has obtained therefor something entirely different,—namely, an interest in a company holding stock of the other railway company as well. It is manifest that in the fullest possible sense this constituted a sale of the property.

Berger v. United States Steel Corp. 63 N. J. Eq. 809, 53 Atl. 68.

These transactions, being lawful, are not affected by allegations as to the motive which actuated them. As the means employed were lawful, the only question must be whether the result accomplished was unlawful.

Pettibone v. United States, 148 U. S. 197, 203, 37 L. ed. 419, 422, 13 Sup. Ct. Rep. 542.

All the action taken being authorized by law, the motive clearly is unimportant.

United States v. Isham, 17 Wall. 496, 21 L. ed. 728; Adler v. Fenton, 24 How. 407, 410, 16 L. ed. 696, 697; Kiff v. Youmans, 86 N. Y. 324, 40 Am. Rep. 543; Connolly v. Union Sewer Pipe Co. 184 U. S. 540, 546, 46 L. ed. 679, 684, 22 Sup. Ct. Rep. 431; Randall v. Hazelton, 12 Allen, 412; Dickerman v. Northern Trust Co. 176 U. S. 181, 190, 44 L. ed. 423, 430, 20 Sup. Ct. Rep. 311; Strait v. National Harrow Co. 51 Fed. 819; Phelps v. Nowlen, 72 N. Y. 39, 28 Am. Rep. 93; Wood v. Amory, 105 N. Y. 278, 11 N. E. 636; Lough v. Outerbridge, 143 N. Y. 271, 25 L. R. A. 674, 38 N. E. 292; National Protective Asso. v. Cumming, 170 N. Y. 315, 58 L. R. A. 135, 63 N. E. 369; Mogul S. S. Co. v. McGregor [1892] A. C. 25, 41, 42; Allen v. Flood [1898] A. C. 1; Pender v. Lushington, L. R. 6 Ch. Div. 70.

No indirect or remote effect of these lawful transactions upon competition between the railway companies could bring them within the Federal anti-trust act.

United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; Hopkins v. United States, 171 U. S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 40; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 246, 44 L. ed. 136, 149, 20 Sup. Ct. Rep. 96.

The mere fact that a contract has the effect of restraining trade or suppressing competition in some degree does not render it injurious to the public welfare, and thus bring it within the police power.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. ed. 315; Gibbs v. Consolidated Gas Co. 130 U. S. 396, 32 L. ed. 979, 9 Sup. Ct. Rep. 553; Hyer v. Richmond Traction Co. 168 U. S. 471, 477, 42 L. ed. 547, 549, 18 Sup. Ct. Rep. 114, 366, Affirming 26 C. C. A. 175, 42 U. S. App. 522, 80 Fed. 839; Continental Ins. Co. v. Fire Underwriters, 67 Fed. 310; Diamond Match Co. v. Roeber, 106 N. Y. 473, 60 Am. Rep. 464, 13 N. E. 419; Hodge v. Sloan, 107 N. Y. 244, 17 N. E. 335; Leslie v. Lorillard, 110 N. Y. 519, 1 L. R. A. 456, 18 N. E. 363; Matthews v. Associated Press, 136 N. Y. 333, 32 N. E. 981; Lough v. Outerbridge, 143 N. Y. 271, 25 L. R. A. 674, 38 N. E. 292, 145 N. Y. 601, 40 N. E. 164; Oakes v. Cattaraugus Water Co. 143 N. Y. 430, 26 L. R. A. 544, 38 N. E. 461; Curran v. Galen, 152 N. Y. 33, 37 L. R. A. 802, 46 N. E. 297; Watertown Thermometer Co. v. Pool, 51 Hun, 157, 4 N. Y. Supp. 861, Approved in Tode v. Gross, 127 N. Y. 485, 13 L. R. A. 652, 28 N. E. 469; Central Shade Roller Co. v. Cushman, 143 Mass. 353, 9 N. E. 629.

This act is a criminal statute pure and simple, and its meaning and effect as now determined must also be its meaning and effect when made the basis of a criminal proceeding. Conversely, the act should now receive such construction only as it would receive upon the trial of those indicted for violating its provisions.

Criminal intent is essential to constitute a crime, and the testimony bearing thereon is always a question for the jury.

People v. Wiman, 148 N. Y. 29, 42 N. E. 408; People v. Flack, 125 N. Y. 324, 11 L. R. A. 807, 26 N. E. 267.

Such restraints as result from the sale or the purchase of property are not within the provisions of anti-trust statutes. Indeed, it is the settled law that the transfer of a business is not illegal because it restrains trade, even by an express covenant.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. ed. 315; Union Sewer-Pipe Co. v. Connelly, 99 Fed. 354, Affirmed in 184 U. S. 540, 46 L. ed. 679, 22 Sup. Ct. Rep. 431; Fisheries Co. v. Lennen, 116 Fed. 217; Harrison v. Glucose Sugar Ref. Co. 53 C. C. A. 484, 116 Fed. 304; Hodge v. Sloan, 107 N. Y. 244, 17 N. E. 335; Leslie v. Lorillard, 110 N. Y. 519, 1 L. R. A. 456, 18 N. E. 363, 13 L. R. A. 652; Oakes v. Cattaraugus Water Co. 143 N. Y. 430, 26 L. R. A. 544, 38 N. E. 461; Watertown Thermometer Co. v. Pool, 51 Hun, 157, 4 N. Y. Supp. 861, Approved in Tode v. Gross, 127 N. Y. 485, 13 L. R. A. 652, 28 N. E. 469; Wood v. Whitehead Bros. Co. 165 N. Y. 545, 59 N. E. 357; Walsh v. Dwight, 40 App. Div. 513, 58 N. Y. Supp. 91; John D. Park & Sons Co. v. National Wholesale Druggists' Asso. 54 App. Div. 223, 66 N. Y. Supp. 615, 175 N. Y. 1, 62 L. R. A. 632, 67 N. E. 136; Diamond Match Co. v. Roeber, 106 N. Y. 473, 60 Am. Rep. 464, 13 N. E. 419.

So, too, it has been ruled precisely that the formation of associations or corporations is not illegal because the result will be to restrain competition.

Hopkins v. United States, 171 U. S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 40; United States Vinegar Co. v. Foehrenbach, 148 N. Y. 58, 42 N. E. 403; Matthews v. Associated Press, 136 N. Y. 333, 32 N. E. 981; Central Shade Roller Co. v. Cushman, 143 Mass. 353, 9 N. E. 629; Rafferty v. Buffalo City Gas Co. 37 App. Div. 618, 56 N. Y. Supp. 288; United States v. Greenhut, 51 Fed. 205; Re Terrell, 51 Fed. 213; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Mogul S. S. Co. v. McGregor [1892] A. C. 25; Lough v. Outerbridge, 143 N. Y. 283, 25 L. R. A. 674, 38 N. E. 292; State ex rel. Crow v. Continental Tobacco Co. (Mo.) 75 S. W. 737.

If the result of restricting competition should follow from the lawful transactions involved herein, it would not be their direct result, but only an incidental and collateral result, such as must always follow when business interests of a similar character pass into the same ownership. It would be precisely such a result as those recognized as lawful by the court in United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

It has been denied, and it is very doubtful whether in any case the 2d section of the anti-trust act applies to railroads.

16 Harvard Law Rev. 545, June, 1903.

It has generally been deemed wise and safe to use rather a process of exclusion, and determine what is not a monopoly, so far as the case in hand required.

Laredo v. International Bridge Co. 14 C. C. A. 1, 30 U. S. App. 110, 66 Fed. 246.

Corporations can invoke the benefits of the provisions of the Constitution and laws which guarantee to persons the enjoyment of property, or afford to them the means for its protection, or prohibit legislation injuriously affecting it.

Minneapolis & St. L. R. Co. v. Beckwith, 129 U. S. 26, 28, 32 L. ed. 585, 586, 9 Sup. Ct. Rep. 207.

Corporations are persons within the meaning of the constitutional provision forbidding the deprivation of property without due process of law, as well as a denial of the equal protection of the laws.

Covington & L. Turnp. Road Co. v. Sandford, 164 U. S. 578, 592, 41 L. ed. 560, 565, 17 Sup. Ct. Rep. 198; Gulf, C. & S. F. R. Co. v. Ellis, 165 U. S. 150, 154, 41 L. ed. 666, 668, 17 Sup. Ct. Rep. 255; Lake Shore & M. S. R. Co. v. Smith, 173 U. S. 684, 690, 43 L. ed. 858, 861, 19 Sup. Ct. Rep. 565; Santa Clara County v. Southern P. R. Co. 9 Sawy. 165, 18 Fed. 385; San Mateo County v. Southern P. R. Co. 8 Sawy. 238, 13 Fed. 722.

This constitutional provision protects the right to acquire property, equally with the right to hold the same after it has been acquired.

Holden v. Hardy, 169 U. S. 366, 391, 42 L. ed. 780, 790, 18 Sup. Ct. Rep. 383; State v. Goodwill, 33 W. Va. 179, 6 L. R. A. 621, 10 S. E. 285; State v. Julow, 129 Mo. 163, 29 L. R. A. 257, 31 S. W. 781.

These rights are not affected by the statute now invoked.

United States v. E. C. Knight Co. 156 U. S. 1, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249.

The 5th Amendment to the Federal Constitution secures all persons in their 'liberty,' and invalidates any legislation by Congress depriving them of liberty 'without due process of law.'

As thus used, 'liberty' means not merely bodily liberty, freedom from physical duress,—but in effect comprehends substantially all those personal and civil rights of the citizen which it is meant to place beyond the power of the general government to destroy or impair.

Slaughter-House Cases, 16 Wall. 36, 122, 127, 21 L. ed. 394, 423, 425; Munn v. Illinois, 94 U. S. 113, 142, 24 L. ed. 77, 90; People ex rel. Annan v. Walsh, 117 N. Y. 621, 22 N. E. 682; Reg. v. Druitt, 10 Cox C. C. 592; Butchers' Union S. H. & L. S. L. Co. v. Crescent City L. S. L. & S. H. Co. 111 U. S. 746, 28 L. ed. 585, 4 Sup. Ct. Rep. 652; Allgeyer v. Louisiana, 165 U. S. 578, 41 L. ed. 832, 17 Sup. Ct. Rep. 427; United States v. Joint Traffic Asso. 171 U. S. 505, 572, 43 L. ed. 259, 288, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 228, 229, 41 L. ed. 136, 143; 20 Sup. Ct. Rep. 96; Bertholf v. O'Reilly, 74 N. Y. 509, 30 Am. Rep. 323; Re Jacobs, 98 N. Y. 98, 50 Am. Rep. 636; People v. Gillson, 109 N. Y. 389, 17 N. E. 343; People v. King, 110 N. Y. 418, 1 L. R. A. 293, 18 N. E. 245; Godcharles v. Wigeman, 113 Pa. 431, 6 Atl. 354.

As used in the 5th constitutional Amendment, 'liberty' includes equality of rights under the law, and secures citizens similarly situated against discriminations between them, which are arbitrary and without foundation in reason.

United States v. Cruikshank, 92 U. S. 542, 554, 555, 23 L. ed. 588, 592; Yick Wo. v. Hopkins, 118 U. S. 356, 369, 30 L. ed. 220. 6 Sup. Ct. Rep. 1064; Gulf, C. & S. F. R. Co. v. Ellis, 165 U. S. 150, 160, 41 L. ed. 666, 670, 17 Sup. Ct. Rep. 255.

This court has held invalid statutes singling out railroad companies and requiring them to pay attorneys' fees to successful adverse litigants (Gulf, C. & S. F. R. Co. v. Ellis, 165 U. S. 150, 41 L. ed. 666, 17 Sup. Ct. Rep. 255), and singling out a single stockyard company, under pretense of classification, for reduction of charges (Cotting v. Kansas City Stock Yards Co. 183 U. S. 79, 46 L. ed. 92, 22 Sup. Ct. Rep. 30), and permitting two or more live-stock raisers to combine to prevent competition, while making it criminal for two or more persons holding property for sale or exchange to combine for the same purpose (Connolly v. Union Sewer Pipe Co. 184 U. S. 540, 46 L. ed. 679, 22 Sup. Ct. Rep. 431).

One of the objects of this suit is to annul all sales of stock of the railway companies to the Securities Company, and to cancel all certificates of stock of the latter company issued in purchase thereof. Even if there were any prohibition in the premises on the railway companies, it would not apply to their stockholders.

A corporation and its stockholders are entirely different entities.

Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U. S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194; Watson v. Bonfils, 53 C. C. A. 535, 116 Fed. 157; American Preservers' Co. v. Norris, 43 Fed. 711; Electric R. Co. v. Jamaica & B. R. C0. 61 Fed. 655.

Any effort to limit the right to sell would necessarily deprive these defendants of their property without due process of law.

Cleveland, C. C. & St. L. R. Co. v. Backus, 154 U. S. 439, 445, 38 L. ed. 1041, 1046, 4 Inters. Com. Rep. 677, 14 Sup. Ct. Rep. 1122;

Any combination 'for the purpose of 146 N. Y. 304, 40 N. E. 996; Ingersoll v. Nassau Electric R. Co. 157 N. Y. 453, 43 L. R. A. 236, 52 N. E. 545; People ex rel. Manhattan Sav. Inst. v. Otis, 90 N. Y. 48; Holden v. Hardy, 169 U. S. 366, 391, 42 L. ed. 780, 790, 18 Sup. Ct. Rep. 383; People v. Marx, 99 N. Y. 377, 52 Am. Rep. 34, 2 N. E. 29; People v. Gillson, 109 N. Y. 389, 17 N. E. 343; Forster v. Scott, 136 N. Y. 577, 18 L. R. A. 543, 32 N. E. 976; Purdy v. Erie R. Co. 162 N. Y. 42, 48 L. R. A. 669, 56 N. E. 508; Buffalo v. Collins Baking Co. 39 App. Div. 432, 57 N. Y. Supp. 347; Rochester & C. Turnp. Co. v. Joel, 41 App. Div. 43, 58 N. Y. Supp. 346; People v. Meyer, 44 App. Div. 1, 60 N. Y. Supp. 415; Ingraham v. National Salt Co. 72 App. Div. 582, 76 N. Y. Supp. 1016; Janesville v. Carpenter, 77 Wis. 288, 8 L. R. A. 808, 46 N. W. 128.

Whatever view be taken of the character of the transaction, the decree of the circuit court transcended the authority of the court under the statute, which was the sole ground and source of its jurisdiction.

Thorndike on the Merger Case (Boston, 1903).

Attorney General Knox argued the cause, and, with Mr. W. A. Day, filed a brief for appellee:

The anti-trust act is not primarily a criminal statute.

The civil remedy by injunction, and the liability to punishment under the criminal provisions of the act, are entirely distinct.

[Argument of Counsel from pages 297-300 intentionally omitted]

United States v. Trans-Missouri Freight Asso. 166 U. S. 342, 41 L. ed. 1028, 17 Sup. Ct. Rep. 540.

In its remedial aspect it ought to be construed liberally and given the widest effect consistent with the language employed. It ought not to be frittered away by the refinements

Broom, Legal Max. 5th Am. ed. 3d London ed. 80; Potter's Dwarr. Stat. & Const. p. 234.

And it makes no difference in the application of these rules that the statute has a penal as well as a remedial side.

Dwarris, Stat. 653, 655; Sedgw. Stat. & Const. Law, 2d ed. p. 309, 310; Hyde v. Cogan, 2 Dougl. 702.

Every contract, combination, or conspiracy in restraint of interstate of foreign commerce is illegal. The method adopted in bringing about the combination is immaterial; and the device of a holding corporation for the purpose of circumventing the law can be no more effectual than any other means.

Noyes, Intercorporate Relations, § 393.

The anti-trust act applies to and covers common carriers by railroad, as well as all other persons, natural or artificial.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540.

The words, 'in restraint of trade or commerce,' as used in the anti-trust act, are not confined to unreasonable or total restraints only, but extend to any and all direct restraints of trade or commerce, even if reasonable or only partial.

Ibid; United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

And while this rule applies with equal force to restraints upon individuals, private corporations, and quasi-public corporations, such as railroads, there is a peculiar reason for its application to restraints upon the latter.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540.

In exercising the powers over commerce vested in the Federal government, Congress may to some extent limit the right of private contract, the right to buy and sell property, without violating the 5th Amendment. It may declare that no contract, combination, or monopoly which restrains trade or commerce by shutting out the operation of the general law of competition shall be legal.

United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

Any combination 'for the purpose of avoiding the effects of competition' in interstate or international trade or commerce is within the prohibition of the act.

United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540; United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 244, 44 L. ed. 136, 148, 20 Sup. Ct. Rep. 96.

As used in the act, the word 'monopoly' is not confined to its common-law meaning of an exclusive grant to one or a few to do that which before had been free and open to all in common.

United States v. Trans-Missouri Freight Asso. 166 U. S. 342, 41 L. ed. 1028, 17 Sup. Ct. Rep. 540.

The term, as used by modern legislators and judges, signifies the combining or bringing together, in the hands of one person or set of persons, of the control, or the power of control, over a particular business or employment, so that competition therein may be suppressed.

People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 294, 8 L. R. A. 497, 22 N. E. 798; People v. North River Sugar Ref. Co. 54 Hun, 377, 2 L. R. A. 33, 3 N. Y. Supp. 401; United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249.

A combination or consolidation of two competing railroads, brought about by transferring to one road a majority of the stock of the other, is such a monopoly.

Pearsall v. Great Northern R. Co. 161 U. S. 646, 677, 40 L. ed. 838, 16 Sup. Ct. Rep. 705; Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. ed. 849, 16 Sup. Ct. Rep. 714.

To prove that a combination or monopoly exists within the meaning of the act, it is not necessary to show that the immediate effect of the acts complained of is to suppress competition or to create a complete monopoly. It is sufficient to show that they tend to bring about those results.

People v. North River Sugar Ref. Co. 54 Hun, 377, 3 N. Y. Supp. 401; United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 237, 44 L. ed. 136, 146, 20 Sup. Ct. Rep. 96; Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 672.

The very existence of the power to restrain trade constitutes a restraint.

United States v. Joint Traffic Asso. 171 U. S. 505, 571, 43 L. ed. 259, 288, 19 Sup. Ct. Rep. 25; United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; Pearsall v. Great Northern R. Co. U. S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705.

It is not necessary in order to bring a combination or conspiracy within the operation of the act, that the members bind themselves each with the other to do the acts alleged to be in restraint of trade. It has always been held to be enough that they act together in pursuance of a common object, and while, of course, this presupposes agreement between them in a broad sense, an agreement or contract in the technical sense is not at all essential.

Reg. v. Murphy, 8 Car. & P. 397.

If in point of law the effect or the tendency of the combination is to restrain trade or commerce the combination is unlawful, and the motive behind it, however beneficent, does not alter that fact in the slightest degree.

United States v. Trans-Missouri Freight Asso. 166 U. S. 341, 342, 41 L. ed. 1028, 17 Sup. Ct. Rep. 540; Addyston Pipe & Steel Co. v. United States, 175 U. S. 234, 44 L. ed. 145, 20 Sup. Ct. Rep. 96; Chesapeake & O. Fuel Co. v. United States, 53 C. C. A. 256, 115 Fed. 623.

The anti-trust act, prohibiting combinations and monopolies in restraint of interstate and foreign commerce, is an exercise of the power granted to Congress to regulate commerce.

Lottery Case, 188 U. S. 321, 47 L. ed. 492, 23 Sup. Ct. Rep. 321.

The term 'commerce,' as used in that grant, embraces the instrumentalities by which commerce is or may be carried on.

Chicago & N. W. R. Co. v. Fuller, 17 Wall. 560, 568, 21 L. ed. 710, 714; Welton v. Missouri, 91 U. S. 275, 280, 23 L. ed. 347, 349; Pensacola Teleg. Co. v. Western U. Teleg. Co. 96 U. S. 1, 24 L. ed. 708; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 203, 29 L. ed. 158, 161, 1 Inters. Com. Rep. 382, 5 Sup. Ct. Rep. 826.

The commerce powers of the Federal government are broad and ample enough to prevent the restraint or obstruction of interstate commerce by combinations and monopolies of competing lines or instrumentalities of interstate transportation.

Gibbons v. Ogden, 9 Wheat. 1, 6 L. ed. 23; Brown v. Maryland, 12 Wheat. 419, 6 L. ed. 678; Passenger Cases, 7 How. 283, 12 L. ed. 702; Re Debs, 158 U. S. 564, 39 L. ed. 1092, 15 Sup. Ct. Rep. 900; Lottery Case, 188 U. S. 321, 47 L. ed. 492, 23 Sup. Ct. Rep. 321; Stockton v. Baltimore & N. Y. R. Co. 1 Inters. Com. Rep. 411, 32 Fed. 11; Boardman v. Lake Shore & M. S. R. Co. 84 N. Y. 157; Noyes, Intercorporate Relations, § 19; Louisville & N. R. Co. v. Kentucky, 161 U. S. 701, 40 L. ed. 859, 16 Sup. Ct. Rep. 714.

Of the various reasons for investing the Federal government with the power to regulate commerce among the several states, the one uppermost in the minds of the members of the constitutional convention was to keep the channels of such commerce open and free from obstructions and restraints.

Pensacola Teleg. Co. v. Western U. Teleg. Co. 96 U. S. 1, 24 L. ed. 708.

The exclusive jurisdiction of the Federal government over commerce with foreign nations and among the states, and over the instrumentalities of such commerce, includes the power of police, or that which is its equivalent, over those subjects in all its undefined breadth and fullness.

Cooley, Const. Lim. 722, 723; Thayer, Cases on Const. Law, p. 742, note.

The police power—or equivalent power—of the Federal government over interstate and foreign commerce is not less plenary and complete because, as to those commercial subjects which are local and do not admit of uniform regulation, the states are permitted to exercise the power until Congress, by its legislation, covers the same field.

Cooley, Const. Lim. 723.

Laws against combinations for the purpose of restricting production, maintaining prices, or suppressing competition have a relation to the end of all police regulations,—the comfort, welfare, or safety of society.

Noyes, Intercorporate Relations, § 409.

Anti-trust statutes therefore are enacted in the exercise of the police, or an analogous, power.

State ex rel. Crow v. Firemen's Fund Ins. Co. 152 Mo. 46, 45 L. R. A. 363, 52 S. W. 363; State ex rel. Astor v. Schlitz Brewing Co. 104 Tenn. 715, 59 S. W. 1033; Waters-Pierce Oil Co. v. State, 19 Tex. Civ. App. 1, 44 S. W. 936.

The police powers or the reserved powers of the states, are not, for any purposes, paramount to the powers of Congress in fields wherein the Federal government has been invested by the Constitution with complete and supreme authority.

New Orleans Gaslight Co. v. Louisiana Light & H. P. & Mfg. Co. 115 U. S. 650, 661, 29 L. ed. 516, 520, 6 Sup. Ct. Rep. 252.

When, in Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 40 L. ed. 849, 16 Sup. Ct. Rep. 714, the court said that to the states remains the power to regulate the instruments of interstate commerce, it had in mind those regulations of a local character which the states are permitted to make in the absence of Federal legislation covering the same subjects, and did not intend to change any old principle, or to enunciate any new principle, of constitutional construction.

California v. Central P. R. Co. 127 U. S. 1, 32 L. ed. 150, 2 Inters. Com. Rep. 153, 8 Sup. Ct. Rep. 1073; Welton v. Missouri, 91 U. S. 275, 23 L. ed. 347; Cooley v. Port Wardens, 12 How. 299, 320, 13 L. ed. 996, 1005; Sherlock v. Alling, 93 U. S. 99, 104, 23 L. ed. 819, 821; Morgan's L. & T. R. & S. S. Co. v. Louisiana Bd. of Health, 118 U. S. 455, 463, 30 L. ed. 237, 241, 6 Sup. Ct. Rep. 1114; Smith v. Alabama, 124 U. S. 465, 31 L. ed. 508, 1 Inters. Com. Rep. 804, 8 Sup. Ct. Rep. 564; Nashville, C. & St. L. R. Co. v. Alabama, 128 U. S. 96, 32 L. ed. 352, 2 Inters. Com. Rep. 238, 9 Sup. Ct. Rep. 28; Hennington v. Georgia, 163 U. S. 299, 41 L. ed. 166, 16 Sup. Ct. Rep. 1086; New York, N. H. & H. R. Co. v. New York, 165 U. S. 628, 631, 41 L. ed. 853, 854, 17 Sup. Ct. Rep. 418 Missouri, K. & T. R. Co. v. Haber, 169 U. S. 613, 626, 42 L. ed. 878, 882, 18 Sup. Ct. Rep. 488.

Ownership of a majority of its stock constitutes the control of a corporation, when the inquiry is whether a combination or monopoly has been formed to stifle competition between two or more rival and competing railroads.

Noyes, Intercorporate Relations, § 294; Farmers' Loan & T. Co. v. New York & N. R. Co. 150 N. Y. 410, 34 L. R. A. 76, 44 N. E. 1043; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798; Pearsall v. Great Northern R. Co. 161 U. S. 646, 671, 40 L. ed. 838, 846, 16 Sup. Ct. Rep. 705; Pennsylvania R. Co. v. Com. (Pa.) 4 Cent. Rep. 495, 7 Atl. 368.

There is no great difficulty in getting at what Congress meant by a 'trust.' Century Dict.; State ex rel. Watson v. Standard Oil Co. 49 Ohio St. 137, 15 L. R. A. 145, 30 N. E. 279; Eddy, Combinations, § 582; Noyes, Intercorporate Relations, § 304; Dodd, Combinations; Their Uses & Abuses.

The trustee in a trust combination may be either a natural or an artificial person.

Beach, Monopolies & Industrial Trusts, § 159; Eddy, Combinations, § 582; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 275, 8 L. R. A. 497, 22 N. E. 798.

The charter of a corporation is the unanimous agreement of its stockholders, declaring the nature and conditions of the trust relation between them and the corporate entity.

Morawetz, Priv. Corp. § 237.

While a written trust agreement between the stockholders is a usual element of the trust form of combination, it is not an essential one. It is sufficient to show that the stockholders acted in pursuance of any understanding, plan, or scheme, written, verbal, or otherwise.

Harding v. American Glucose Co. 182 Ill. 551, 55 N. E. 577.

The Securities Company constitutes a 'combination in the form of a trust.'

Beach, Monopolies & Industrial Trusts, § 159; Noyes, Intercorporate Relations, §§ 310, 393; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798; Harding v. American Glucose Co. 182 Ill. 551, 55 N. E. 577.

The disguise by which the defendants sought to hide the fact of a combination of the Great Northern and Northern Pacific, and their connection therewith, appears so thin and transparent that it is a cause of wonder that they should ever have adopted it.

Atty. Gen. v. Great Northern R. Co. 6 Jur. N. S. 1006, 1 Drew. & S. 159; Stockton v. Central R. Co. 50 N. J. Eq. 52, 17 L. R. A. 97, 24 Atl. 964.

Devices of exactly the same character had already been repudiated by courts of high standing.

Ford v. Chicago Milk Shippers' Asso. 155 Ill. 166, 27 L. R. A. 298, 39 N. E. 651; Distilling & Cattle Feeding Co. v. People, 156 Ill. 448, 41 L. ed. 188.

[Argument of Counsel from pages 310-312 intentionally omitted]

Fictions of law, invented to promote justice, can never be invoked to accomplish its defeat.

Mostyn v. Fabrigas, Cowp. 177; Morris v. Pugh, 3 Burr. 1243.

It is well settled that, when it is in the interest of the administration of justice to do so, courts may and will ignore the fiction that a corporation is a legal being apart from the stockholders, and will consider its acts as the acts of its constituent members; and this is emphatically the case when the state—the sovereign authority—is the complaining party.

People v. North River Sugar Ref. Co. 121 N. Y. 582, 9 L. R. A. 33, 24 N. E. 834; Morawetz, Private Corp. §§ 1, 227; Taylor, Priv. Corp. § 50; Clark & M. Private Corp. pp. 17, 22; State ex rel. Watson v. Standard Oil Co. 49 Ohio St. 137, 15 L. R. A. 145, 30 N. E. 279; Ford v. Chicago Milk Shippers' Asso. 155 Ill. 166, 27 L. R. A. 298, 39 N. E. 651; Atty. Gen. v. Great Northern R. Co. 6 Jur. N. S. 1006, 1 Drew & S. 157; Pennsylvania R. Co. v. Com. (Pa.) 4 Cent. Rep. 495, 7 Atl. 368; Stockton v. Central R. Co. 50 N. J. Eq. 52, 17 L. R. A. 97, 24 Atl. 964.

'To monopolize' signifies the combining or bringing together, in the hands of one person or set of persons, of the control of, or the power to control, several rival and competing businesses, to the end that competition between them may be suppressed.

United States v. E. C. Knight Co. 156 U. S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540.

By acquiring a majority of the shares of the Great Northern and Northern Pacific the Securities Company has obtained the control of, and therefore the power to suppress competition between, two rival and competing lines of railway engaged in interstate commerce, and in that way has monopolized a part of interstate commerce.

Pearsall v. Great Northern R. Co. 161 U. S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798.

In the exercise of its regulative and police powers over interstate commerce, Congress may suppress monopolies in restraint thereof, by whomsoever created, notwithstanding that in doing so it restricts the right of private contract to some extent.

United States v. Joint Traffic Asso. 171 U. S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

Even if a natural person could lawfully have done what the Securities Company has done, that would be no argument to prove that the Securities Company, in so doing, has not violated the law against monopolies.

People v. North River Sugar Ref. Co. 121 N. Y. 625, 9 L. R. A. 33, 24 N. E. 834.

Because a person has the right to purchase stock it does not follow that stockholders of two or more competing corporations can combine among themselves and with such person to sell him their stock and induce others to do the same, so as to center the controlling stock interests of the several corporations in a single head, in violation of statutes against combinations, consolidations, and monopolies.

Noyes, Intercorporate Relations, § 36; Pennsylvania R. Co. v. Com. (Pa.) 4 Cent. Rep. 495, 7 At1. 373.

The failure to observe the distinction between an actual, bona fide sale, and what is nominally a sale, but in reality only a cloak under which to accomplish a combination of corporate properties or interests, has sometimes led to confusion of language, if not of thought, in the discussion of trade combinations.

Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Noyes, Intercorporate Relations, § 354.

Even if it were true that the government had acquiesced for eleven years in the creation of combinations like the one now in issue, it would not thereby be estopped from prosecuting the case at bar; nor could its inaction for that period be considered a contemporaneous or practical construction of the act.

Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 689, 690, 40 L. ed. 849, 855, 16 Sup. Ct. Rep. 714.

That a combination or monopoly of competing interstate carriers affects interstate commerce directly, and not incidentally or remotely, is universally conceded.

Noyes, Intercorporate Relations, § 392.

The court below, as a court of equity, had ample power to decree the relief it did, and in the form it did.

Pomeroy, Eq. Jur. 2d ed. § 111, p. 115; § 170, p. 192; Taylor v. Salmon, 4 Myl. & C. 141; Chicago, R. I. & P. R. Co. v. Union P. R. Co. 47 Fed. 15.

Mr. Justice Harlan announced the affirmance of the decree of the circuit court, and delivered the following opinion:

This suit was brought by the United States against the Northern Securities Company, a corporation of New Jersey; the Great Northern Railway Company, a corporation of Minnesota; the Northern Pacific Railway Company, a corporation of Wisconsin; James J. Hill, a citizen of Minnesota; and William P. Clough, D. Willis James, John S. Kennedy, J. Pierpont Morgan, Robert Bacon, George F. Baker, and Daniel S. Lamont, citizens