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U.S. Supreme Court

United States v. American Tobacco Co., 221 U.S. 106 (1911)

United States v. American Tobacco Company

Nos. 118, 119

Argued January 3, 4, 5, 6, 1910

R; restored to docket for reargument April 11, 1910

Reargued January 9, 10, 11, 12, 1911

Decided My 29, 1911

221 U.S. 106


Standard Oil Co. v. United States, ante, p. 221 U. S. 1, followed and reaffirmed as to the construction to be given to the Anti-Trust Act of July 2, 1890, c. 647, 26 Stat. 209, and held that the combination in this case is one in restraint of trade and an attempt to monopolize the business of tobacco in interstate commerce within the prohibitions of the act. chanrobles.com-red

Page 221 U. S. 107

In order to meet such a situation as is presented by the record in this case and to afford the relief for the evils to be overcome, the Antitrust Act of 1890 must be given a more comprehensive application than affixed to it in any previous decision.

In Standard Oil Co. v. United States, ante, p. 221 U. S. 1, the words "restraint of trade" as used in § 1 of the Anti-Trust Act were properly construed by the resort to reason; the doctrine stated in that case was in accord with all previous decisions of this Court, despite the contrary view at times erroneously attributed to the expressions in United States v. Trans-Missouri Freight Association, 166 U. S. 290, and United States v. Joint Traffic Association, 171 U. S. 505.

The Anti-Trust Act must have a reasonable construction, as there can scarcely be any agreement or contract among business men that does not directly or indirectly affect and possibly restrain commerce. United States v. Joint Traffic Association, 171 U. S. 505, 171 U. S. 568.

The words "restraint of trade" at common law, and in the law of this country at the time of the adoption of the Anti-Trust Act, only embraced acts, contracts, agreements or combinations which operated to the prejudice of the public interests by unduly restricting competition or by unduly obstructing due course of trade, and Congress intended that those words as used in that act should have a like significance, and the ruling in Standard Oil Co. v. United States, ante, p. 221 U. S. 1, to this effect is reexpressed and reaffirmed.

The public policy manifested by the Anti-Trust Act is expressed in such general language that it embraces every conceivable act which can possibly come within the spirit of its prohibitions, and that policy cannot be frustrated by resort to disguise or subterfuge of any kind.

The record in this case discloses a combination on the part of the defendants with the purpose of acquiring dominion and control of interstate commerce in tobacco by methods and manners clearly within the prohibition of the Anti-Trust Act, and the subject matters of the combination and the combination itself are not excluded from the scope of the act as being matters of intrastate commerce and subject to state control.

In this case the combination in all its aspects, both as to stock ownership and as to the corporations independently, including foreign corporations to the extent that they became cooperators in the combination, come within the prohibition of the first and second sections of the Anti-Trust Act.

In giving relief against an unlawful combination under the Anti-Trust Act, the court should give complete and efficacious effect to the chanrobles.com-red

Page 221 U. S. 108

prohibitions of the statute, accomplish this result with as little injury as possible to the interest of the general public, and have a proper regard for the vested property interests innocently acquired. In this case, the combination, in and of itself, and also all of its constituent elements, are decreed to be illegal, and the court below is directed to hear the parties and ascertain and determine a plan or method of dissolution and of recreating a condition in harmony with law, to be carried out within a reasonable period (in this case not to exceed eight months), and, if necessary, to effectuate this result either by injunction or receivership.

Pending the achievement of the result decreed, all parties to the combination in this case should be restrained and enjoined from enlarging the power of the continuation by any means or device whatever.

Where a case is remanded, as this one is, to the lower court with directions to grant the relief in a different manner from that decreed by it, the proper course is not to modify and affirm, but to reverse and remand with directions to enter a decree in conformity with the opinion and to carry out the directions of this Court, with costs to defendants.

164 F.7d 0 reversed and remanded with directions.

The facts, which involve the construction of the Antitrust Act of July 2, 1890, and the question whether the Acts of the defendants amounted to a combination in restraint of interstate commerce in tobacco, are stated in the opinion. chanrobles.com-red

Page 221 U. S. 142


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