Page images
PDF
EPUB

the same.

Intent is almost essential to such a combination and is essential to such

an attempt."
Again (pp. 396 and 397):

* *

Although the combination alleged embraces restraint and monopoly of trade within a single State, its effect upon commerce among the States is not accidental, secondary, remote, or merely probable. * Here the subject matter is sales, and the very point of the combination is to restrain and monopolize commerce among the States in respect of such sales."

Again (pp. 398 and 399), in answer to the objection that what was charged did not constitute a case involving commerce among the States, the court said:

"Commerce among the States is not a technical legal conception, but a practical one, drawn from the course of business. When cattle are sent for sale from a place in one State, with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the stock yards, and when this is a typical, constantly recurring course, the current thus existing is a current of commerce among the States, and the purchase of the cattle is a part and incident of such commerce. What we say is true at least of such a purchase by residents in another State from that of the seller and of the cattle.''

* * *

The application of the commerce clause of the Constitution in the Swift case was the result of the natural development of interstate commerce under modern conditions. It was the inevitable recognition of the great central fact that such streams of commerce from one part of the country to another which are ever flowing are in their very essence the commerce among the States and with foreign nations which historically it was one of the chief purposes of the Constitution to bring under national protection and control. This court declined to defeat this purpose in respect of such a stream and take it out of complete national regulation by a nice and technical inquiry into the noninterstate character of some of its necessary incidents and facilities when considered alone and without reference to their association with the movement of which they were an essential but subordinate part.

Ac

The principles of the Swift case have become a fixed rule of this court in the construction and application of the commerce clause. Its latest expression on the subject is found in Lemke v. Farmers' Grain Co., decided at this term, February 27, 1922. In that case it was held, on the authority of the Swift case, that the delivery and sale of wheat by farmers to local grain elevators in North Dakota to be shipped to Minneapolis, when practically all the wheat purchased by such elevators was so shipped and the price was fixed by that in the Minneapolis market less profit and freight constituted a course of business and determined the interstate character of the transaction. cordingly a State statute which sought to regulate the price and profit of such sales and was found to interfere with the free flow of interstate commerce, was declared invalid as a violation of the commerce clause. Similar confirmation of the principle of the Swift case is to be found in Dahnke v. Bondurant, in Eureka Pipe Line v. Hallanan, and in U. S. Fuel Co. v. Hallanan, all decided December 12, 1921; in Western Union Co. v. Foster (247 U. S. 105, 113), in United States v. Reading (226 U. S. 324, 367, 368); Ohio R. R. Co. v. Worthington (225 U. S. 101, 108); Loewe . Lawler (208 U. S. 274, 301).

It is manifest that Congress framed the packers and stockyards act in keeping with the principles announced and applied in the opinion in the Swift case. The recital in section 2, paragraph b of Title I of the act quoted in the margin leaves no doubt of this. The act deals with the same current of business, and the same practical conception of interstate commerce.

Of course, what we are considering here is not a bill in equity or an indictment charging conspiracy to obstruct interstate commerce, but a law. The language of the law shows that what Congress had in mind primarily was to prevent such conspiracies by supervision of the agencies which would be likely to be employed in it. If Congress could provide for punishment or restraint of such conspiracies after their formation through the antitrust law as in the Swift case, certainly it may provide regulation to prevent their formation. The reasonable fear by Congress that such acts, usually

The first title, sec. 2, par. b, provides that "for the purpose of this act a transaction in respect to any article shall be considered to be in commerce if such article is part of that current of commerce usual in the live stock and meat packing industries whereby live stock and its products are sent from one State with the expectation that they will end their transit after purchase in another, including, in addition to cases within the general description, all cases whose purchase or sale is either for shipment to another State, or'for slaughter of the live stock within the State and the shipment outside of the State of the products resulting from such slaughter. Articles normally in such current of commerce shall not be considered out of such current through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of the act."

[ocr errors]

lawful and affecting only intrastate commerce when considered alone, will probably and more or less constantly be used in conspiracies against interstate commerce or constitute a direct and undue burden on it, expressed in this remedial legislation, serves the same purpose as the intent charged in the Swift indictment to bring acts of a similar character into the current of interstate commerce for Federal restraint. Whatever amounts to more or less constant practice, and threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and meet it. This court will certainly not substitute its judgment for that of Congress in such a matter unless the relation of the subject to interstate commerce and its effect upon it are clearly nonexistent.

In United States v. Ferger et al. (250 U. S. 199), the validity of an act of Congress punishing forgery and utterance of bills of lading for fictitious shipments in interstate commerce was in question. It was contended that there was and could be no commerce in a fraudulent and fictitious bill of lading, and therefore that the power of Congress could not embrace such pretended bill. In upholding the act, this court, speaking through Chief Justice White, answered the objection by saying:

"But this mistakenly assumes that the power of Congress is to be necessarily tested by the intrinsic existence of commerce in the particular subject dealt with, instead of by relation of that subject to commerce and its effect upon it. We say mistakenly assumes, because we think it clear that if the proposition were sustained, it would destroy the power of Congress to regulate, as obviously that power, if it is to exist, must include the authority to deal with obstructions to interstate commerce (In re Debs, 158 U. S. 564) and with a host of other acts which, because of their relation to and influence upon interstate commerce, come within the power of Congress to regulate, although they are not interstate commerce in and of themselves."

The transportation act of 1920 presents a close analogy to this case. It authorizes supervision by the Interstate Commerce Commission of intrastate commerce where it is so carried on as to work undue, unreasonable advantage or perference in favor of persons or localities in intrastate commerce, as against those in interstate commerce, or any undue, unjust, or unreasonable discrimination against interstate commerce itself. Railroad Commission v. Chicago, Burlington & Quincy Railroad Company, decided February 27, 1922. That case followed the Minnesota Rate cases (230 Ū. S. 352, 432, 433); the Shreveport case (234 U. S. 342, 351); Illinois Central R. R. Co. v. Public Utilities Commission (245 U. S. 493); B. & O. Ry. Co. v. Interstate Commerce Commission (221 U. S. 612, 618); Southern Ry. Co. v. United States (222 U. S. 20, 26, 27); Second Employers Liability case (223 Ú. S. 1, 48, 51). The principle of these cases is thus clearly stated by the court in Minnesota Rate cases (p. 399):

"The authority of Congress extends to every part of interstate commerce and to every instrumentality and agency by which it is carried on; and the full control by Congress of the subjects committed to its regulation is not to be denied or thwarted by the commingling of interstate and intrastate operations. This is not to say that the Nation may deal with the internal concerns of the State as such, but that the execution by Congress of its constitutional power to regulate interstate commerce is not limited by the fact that intrastate transactions may have become so interwoven therewith that the effective government of the former incidentally controls the latter. This conclusion necessarily results from the supremacy of the national power within its appointed sphere.'

[ocr errors]

In section 311 of the act quoted in the margin,2 Congress gives to the Secretary of Agriculture in respect to intrastate transactions that affect prejudicially interstate commerce under his protection the same powers given to the Interstate Commerce Commission in respect to intrastate commerce which affects prejudicially interstate railroad commerce in paragraph 4, section 13, as amended in section 416 of the transportation act of 1920. This was the paragraph and section which were enforced in Railroad Commission v. Chicago, Burlington & Quincy Railroad Company, supra, and the validity of which was upheld by this court.

2 Section 311 is as follows:

"Whenever in any investigation under the provisions of this title or in any investigation instituted by petition of the stockyard owner or market agency concerned, which petition is hereby authorized to be filed, the Secretary after full hearing finds that any rate, charge, regulation, or practice of any stockyard owner or market agency for or in connection with the buying or selling on a commission basis or otherwise, receiving, marketing, feeding, holding, delivery, shipment, weighing, or handling, not in commerce, of live stock, causes any undue or unreasonable advantage or preference as between persons or localities in intrastate commerce in live stock on the one hand, and interstate or foreign commerce in live stock on the other hand, or any undue, unjust, or unreasonable discrimination against interstate or foreign commerce which is hereby forbidden and declared to be unlawful, the Secretary shall prescribe the rate, charge, regulation, or practice thereafter to be observed in such manner as in his judgment will remove such advantage, preference, or discrimination. Such rates, charges, regulations, or practices shall be observed while in effect by the stockyard owners or market agencies, parties to such proceeding affected thereby, the law of any State or the decision of any State authority to the contrary notwithstanding."

Counsel for appellants cite cases to show that transactions like those of the commission men or dealers here are not interstate commerce or within the power of Congress to regulate. The chief of these are Hopkins v. United States (171 U. S. 604) and Anderson v. United States (171 U. S. 604). These cases were considered in the Swift case and disposed of by the court as follows (p. 397):

"So again, the line is distinct between this case and Hopkins v. United States (171 U. S. 578). All that was decided there was that the local business of commission merchants was not commerce among the States, even if what the brokers were employed to sell was an object of such commerce. The brokers were not like the defendants before us, themselves the buyers and sellers. They only furnish facilities for sales. Therefore, there again the effects of the combination of brokers upon the commerce was only indirect and not within the act. Whether the case would have been different if the combination had resulted in exorbitant charges was left open. In Anderson v. United States (171 U. S. 604) the defendants were buyers and sellers at the stockyards but their agreement was merely not to employ brokers or to recognize yard traders who were not members of their association. Any yard trader could become a member of the association on complying with the conditions and there was said to be no feature of monopoly in the case. It was held that the combination did not directly regulate commerce between the States and being formed with a different intent, was not within the act. The present case is more like Montague & Co. v. Lowry (193 U. S. 38)."

It is clear from this that if the bill in the Swift case had averred that control of the stockyards and the commission men was one of the means used by the packers to make arbitrary prices in their plan of monopolizing the interstate commerce, the acts of the stockyards owners and commission men would have been regarded as directly affecting interstate commerce and within the antitrust act. Congress has found as an evil to be apprehended and to be prevented by the act here in question, in the use and control of stockyards and the commission men to promote a packers' monopoly of interstate commerce. The act finds and imports this injurious direct effect of such agencies upon interstate commerce just as the intent of the conspiracy charged in the indictment in the Swift case tied together the parts of the scheme there attacked and imported their direct effect upon interstate commerce.

Again, if the result of the combination of commission men in the Hopkins case had been to impose exorbitant charges on the passage of the live stock through the stockyards from one State to another, the case would have been different, as the court suggests. The effect on interstate commerce in such a case would have been direct. Similarly in the Anderson case if the combination of dealers had been directed to collusion with the commission men to secure sales at unduly low prices to the dealers and to double commissions, or to practice any other fraud or oppression calculated to decrease the price received by the shipper and increase the price to the purchaser in the passage of live stock through the stockyards in interstate commerce, this would have been a direct burden on such commerce and within the antitrust act.

The other cases relied on by appellants are less relevant to this discussion than the Anderson and Hopkins cases. Some of them are tax cases. As to them it is well to bear in mind the words of the court in the Swift case (p. 400):

"But we do not mean to imply that the rule which marks the point at which -State taxation or regulation becomes permissible necessarily is beyond the scope of interference by Congress where such interference is deemed necessary for the protection of commerce among the States."

Thus, take the case of Bacon v. Illinois (227 U. S. 504). Bacon had purchased grain in transit from a western State to the East. He exercised the power under his contract to stop the grain in Illinois and put it in a grain elevator there. He intended to send it on to some other State for sale. He might have changed his mind. He did, however, after a time, send it out of the State. The grain was taxed while it was in Illinois. The question was whether it was immune from taxation because in transit in interstate commerce. Following the cases of Woodruff v. Parham (8 Wall. 123); Coe v. Errol (116 U. S. 517); Brown v. Houston (114 U. S. 622); Pittsburg & Southern Coal Co. v. Bates (156 Ú. S. 577); Diamond Match Co. v. Ontonagon (188 U. S. 82, 93, 96); Kelley v. Rhodes (188 U. S. 1, 5, 7); General Oil Co. v. Crain (209 U. S. 211); and American Steel & Wire Co. v. Speed (192 U. S. 500), it was held that property in a State which its owner intends to transport to some other State, but which is not in actual transit and in respect to the disposition of which he may change his mind is not in interstate commerce just because of the intention of its owner, and may, therefore, be taxed by the State where it is. The court brought out the distinction between such cases and this in the remark (p. 516):

105406-22—SER Z- 7

"The question, it should be observed, is not with respect to the extent of the power of Congress to regulate interstate commerce, but whether a particular exercise of state power in view of its nature and operation must be deemed to be in conflict with this paramount authority.'

[ocr errors]

Moreover, it will be noted that even in tax cases where the tax is directed against a commodity in an actual flowing and constant stream out of a State from which the owner may withdraw part of it for use or sale in the State before it reaches the State border, we have held that a tax on the flow is a burden on interstate commerce which the State may not impose because such flow in interstate commerce is an established course of business. (United Fuel Gas Co. v. Hallanan, decided December 12, 1921; the Eureka Pipe Line Company v. Hallanan et al., decided December 12, 1921.) In the former, the court summed up as follows:

"In short, the great body of the gas starts for points outside the State and goes to them. That the necessity of business require a much smaller amount destined to points within the State to be carried undistinguished in the same pipes does not affect the character of the major transportation. Neither is the case as to the gas sold to the three companies changed by the fact that the plaintiff as owner of the gas, and the purchasers after they receive it might change their minds before the gas leaves the State and that the precise proportions between local and outside deliveries may not have been fixed, although they seem to have been. The typical and actual course of events marks the carriage of the greater part as commerce among the States, and theoretical possibilities may be left out of account. There is no break, no period of deliberation, but a steady flow ending as contemplated from the beginning beyond the State line. (Ohio R. R. Commission v. Worthington, 225 U. S. 101, 108; United States v. Reading Co., 226 U. S. 324, 367; Western Union Telegraph Co. v. Foster, 247 U. S. 105, 113.)"

The case of Blumenstock v. Curtis (252 U. S. 436) is easily distinguished from the one at the bar. There it was merely held that an attempt of a publisher to monopolize the business of publishing advertising matter in magazines resulting in refusal of such publisher to accept advertisements in his magazines was too remote in its relation to the interstate commerce of circulating magazines. The court said:

"This case is wholly unlike International Text Book v. Pigg (217 U. S. 91) wherein there was a continuous interstate traffic in textbooks and apparatus for a course of study pursued by means of correspondence, and the movements in interstate commerce were held to bring the subject matter within the domain of Federal control and to exempt it from the burden imposed by State legislation."

Pennsylvania R. R. Co. v. Knight (192 U. S. 21), relied on by counsel for appellants and said to be exactly applicable to the case at bar, was an effort by the Pennsylvania Railroad Co. to secure immunity from city regulation for a cab system which it ran in New York to and from its station to points in New York City, on the ground that it was part of interstate commerce. This court held that because it was independent of the railroad transportation, and not included in the contract of railroad carriage, it did not come within interstate commerce. The case was distinguished in the Swift case (p. 401) from cartage for delivery of the goods when part of the contemplated transit. There is nothing in the case to indicate that if such an agency could be and were used in a conspiracy unduly and constantly to monopolize interstate passenger traffic, it might not be brought within Federal restraint.

As already noted, the word "commerce," when used in the act, is defined to be interstate and foreign commerce. Its provisions are carefully drawn to apply only to those practices and obstructions which in the judgment of Congress are likely to affect interstate commerce prejudically. Thus construed and applied, we think the act clearly within congressional power and valid.

Other objections are made to the act and its provisions as violative of other limitations of the Constitution, but the only one seriously pressed was that based on the commerce clause and we do not deem it necessary to discuss the others.

The orders of the district court refusing the interlocutory injunctions are affirmed. Mr. Justice McReynolds dissents.

Mr. Justice Day did not sit in these cases and took no part in their decision. Mr. MORRILL. I want to say that the raising of this objection in the South St. Paul yard is not altogether the seeking of the Secretary of Agriculture. In other words, just as has been said, whether the right of the State officials and others to complain to the Secretary of Agriculture can be exercised by people outside of the State just as well as by people inside of the State. And, as I said in my statement the other day, the market department of the State of South Dakota first complained about this matter and did so under the section which authorized them to make a complaint, and the question was whether we have power over these rates. And it was insisted by the State that their weighers should be allowed to remain in there and that they

should have the right to collect this weighing charge, because their State law authorized them to do so. If their law was valid there was nothing that we could do about it. But counsel held that it was not valid, because it covered the field of the packers and stockyards act and was in conflict with it as being a regulation of interstate

commerce.

Mr. JONES. That pretty near settles that feature of it. But now could you establish under this act, or are you authorized to do so—I have not read it carefully with that idea in mind-national weighers there and authorize them to make a charge sufficient to cover the cost so that there would not be a drain on the National Treasury in that regard? Are you given that authority?

Mr. MORRILL. That, as I said, is a question that I am not prepared to answer.
Mr. JONES. Yes.

Mr. MORRILL. And I will say that frankly-and I am not withholding anything— I am not prepared to answer that question, because so far we have looked upon this law as a supervision law, and as one that should be carried on by supervision measures until those measures fail.

Mr. TINCHER. Have you any question, Mr. Morrill, in your mind now, in your judgment, as to whether or not you will be able to absolutely prevent any fraud in weighing by supervision?

Mr. MORRILL. I have no question at all in my mind about that, by supervision methods.

Mr. TINCHER. Now, have you any question in your mind as to whether or not you will be able to cure the evils of irresponsible commission men beating the producer out of the price of his live stock, by proper regulation?

Mr. MORRILL. I do not think we have any less authority than the State of Minnesota has claimed to have on that subject.

Mr. JONES. Well, you think it will be ultimately necessary to require a bond even though you have the other?

Mr. MORRILL. I think that is quite likely.

Mr. THOMPSON. Under what section of your law would you be able to requiro bond?

Mr. MORRILL. It does not need the word.

Mr. JONES. He has got the authority.

Mr. TINCHER. He can make a commission company by regulation put up a cade deposit if he wants to.

Mr. MORRILL. This law works two ways. It says in the first place:

"It shall be the duty of every stockyard owner and market agency to furnish upon reasonable request, without discrimination, reasonable stockyard services at such stockyard."

Now bear in mind the definition of "stockyard services:"

"The term 'stockyard services' means services or facilities furnished at a stockyard in connection with the receiving, buying, or selling on a commission basis or otherwise, marketing, feeding, watering, holding, delivery, shipment, weighing, or handling, in commerce.'

Now that operates directly on him. Then it goes on and says:

"It shall be the duty of every stockyard owner and market agency to establish, observe, and enforce just, reasonable, and nondiscriminatory regulations and practices in respect to the furnishing of stockyard services, and every unjust, unreasonable, or discriminatory regulation or practice is prohibited and declared to be unlawful."

Then it goes along still further and says that

Mr. JONES (interposing). Well, somewhere in there it authorizes the Secretary of Agriculture to prescribe all such rules and regulations as are necessary to accomplish such purposes.

Mr. MORRILL. I want to get the whole thing before you, because there has been some question about it:

"SEC. 310. Whenever after full hearing upon a complaint made as provided in section 309, or after full hearing under an order for investigation and hearing made by the Secretary on his own initiative, either in extension of any pending complaint or without any complaint whatever, the Secretary is of the opinion that any rate, charge, regulation, or practice of a stockyard owner or market agency, for or in connection with the furnishing of stockyard services, is or will be unjust, unreasonable. or discriminatory, the Secretary".

It covers a great deal of territory in those words

"(a) May determine and prescribe what will be the just and reasonable rate or charge, or rates or charges, to be thereafter observed in such case, or the maximum or mini

« ՆախորդըՇարունակել »