U.S. Supreme Court United States v. Socony-Vacuum Oil
Co., Inc., 310
U.S. 150 (1940) United States v. Socony-Vacuum Oil
Co., Inc. No. 346 Argued February 5, 6,
1940 Decided May 6, 1940 310
U.S. 150 ast|>* 310
U.S. 150 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SEVENTH
CIRCUIT Syllabus 1. Agreements to fix prices in interstate commerce are unlawful per se under the Sherman Act, and no showing of so-called
competitive abuses or evils which the agreements were designed to
eliminate or alleviate may be interposed as a defense. Pp. 310 U. S. 210 , 310 U. S.
218 .

															2. Numerous oil companies and individuals were convicted under
an indictment alleging that, in violation of § 1 of the Sherman
Act, they conspired to raise and maintain spot market prices of
gasoline, and prices to jobbers and consumers in the "Midwestern
Area," embracing many States, by buying up "distress" gasoline on
the spot markets and eliminating it as a market factor. In support
of allegations of the indictment, there was evidence to prove that
the defendants, with intent to raise and maintain prices, devised
and carried out an organized program of regularly ascertaining the
amounts of surplus spot market gasoline, of assigning its sellers
to buyers who were in the combination, and of purchasing it at fair
going market prices, and that this process, by removing part of the
spot market supply, was at least a contributing factor in
stabilizing the spot market and thereby causing an increase of
prices, so that jobbers and consumers in the midwestern area paid
more for their gasoline than they would have paid but for the
conspiracy, their prices being geared to spot market prices. Held: (1) It is immaterial to the question of guilt that other factors
also may have contributed to the rise and stability of the markets,
and that competition on the spot markets was not entirely
eliminated. P. 310 U. S.
219 .

															(2) The elimination of so-called competitive evils is no legal
justification for such buying programs. So far as price-fixing
agreements are concerned, the Act establishes one uniform rule
applicable to all industries alike. P. 310 U. S.
220 . Page 310 U. S. 151 (3) Even though the members of the price-fixing group were in no
position to control the market, yet, to the extent that they
raised, lowered, fixed, pegged, or stabilized prices, they would be
directly interfering with the free play of market forces. P. 310 U. S.
221 .

															(4) There was no error in the refusal to charge that, in order
to convict, the jury must find that the resultant prices were
raised and maintained at "high, arbitrary and noncompetitive
levels." A charge in the indictment to that effect was surplusage.
P. 310 U. S.
222 .

															(5) Nor is it important that the prices paid by the combination
were not fixed in the sense of being uniform and inflexible. P. 310 U. S.
222 .

															(6) A combination formed for the purpose and with the effect of
raising, depressing, fixing, pegging, or stabilizing the price of a
commodity in interstate or foreign commerce is illegal per
se under the Act. P. 310 U. S.
223 .

															(7) Where the means for price-fixing are purchases of a part of
the supply of the commodity for the purpose of keeping it from
having a depressive effect on the market, power to fix prices may
be found to exist though the combination does not control a
substantial part of the commodity. P. 310 U. S.
224 .

															(8) Price-fixing agreements may have effective influence over
the market, and utility to members of the conspiracy group, though
the power possessed or exerted by the combination falls far short
of domination and control. The Sherman Act is not concerned solely
with monopoly power. P. 310 U. S.
224 .

															(9) Proof that a combination was formed for the purpose of
fixing prices, and that it caused them to be fixed or contributed
to that result, is proof of the completion of a price-fixing
conspiracy under § 1 of the Act. P. 310 U. S.
224 .

															(10) A conspiracy to fix prices violates § 1 of the Act though
no overt act is shown, though it is not established that the
conspirators had the means available for accomplishment of their
objective, and though the conspiracy embraced but a part of the
interstate or foreign commerce in the commodity. P. 310 U. S.
225 n.

															(11) Under the National Industrial Recovery Act, 48 Stat. 195, a
price-fixing agreement could be exempted from the provisions of the
Sherman Act only through the code machinery with the approval of
the President as provided in §§ 3(a) and 5; mere knowledge,
acquiescence or tacit approval by government employees would not
suffice. Pp. 310 U. S.
225 -227. Page 310 U. S. 152 (12) A practice contrary to the Sherman Act, even if approved
under the National Industrial Recovery Act, became unlawful when
continued after the expiration of the Recovery Act. P. 310 U. S.
227 .

															(13) The fact that the buying program in this case may have been
consistent with the general objectives of the National Industrial
Recovery Act is irrelevant to its legality under the Sherman Act
where the method provided by Congress for alleviating the penalties
of the Sherman Act was not followed. P. 310 U. S.
227 .

															(14) Offers of proof by defendants to show that, by their buying
program, they had not raised spot market prices of gasoline to an
artificial, noncompetitive level held properly denied as
immaterial. P. 310 U. S.
229 .

															(15) Offers of proof by defendants to establish and evaluate
other contributing causes for price rise and market stability
during the indictment period held properly denied as
cumulative and collateral. A trial court has a wide range of
discretion in the exclusion of such evidence. P. 310 U. S.
229 .

															3. In a trial under the Sherman Act, where much evidence had
been given of general economic conditions before and during the
indictment period, the defense offered further evidence of market
conditions antedating that period, introduction of which would have
complicated the case, confused the jury possibly, and protracted an
already lengthy trial, held that refusal of the offers was
not ground for a new trial, matters of substance not being
affected. P. 310 U. S.
229 .

															4. Use of grand jury testimony for the purpose of refreshing the
recollection of a witness rests in the sound discretion of the
trial judge, and no iron-clad rule requires that opposing counsel
be shown the grand jury transcript where it is not shown the
witness and where some appropriate procedure is adopted to prevent
its improper use. Pp. 310 U. S. 231 , 310 U. S.
233 .

															5. Grand jury testimony is ordinarily confidential. But, after
the grand jury's functions are ended, disclosure is wholly proper
where the ends of justice require it. Pp. 310 U. S.
233 -234.

															6. Permission to use grand jury testimony to refresh the
memories of witnesses in a criminal case is not ground for a new
trial, even if erroneous, where it was clearly not prejudicial, and
did not affect substantial rights of the defendant. Jud.Code, §
269. P. 310 U. S.
235 .

															7. In the absence of exceptional circumstances, improper remarks
made by a prosecuting attorney in his argument to the jury in a
criminal trial are not ground for a new trial if they were not
objected to at the time. Pp. 310 U. S. 237 , 310 U. S.
238 -239. Page 310 U. S. 153 8. It is not improper in a Sherman Act case to discuss corporate
power, its use and abuse, relevantly to the issues, for the subject
is material to the philosophy of that Act and its purposes and
objectives are clearly legitimate subjects for discussion before
the jury. P. 310 U. S.
239 .

															9. Appeals to class prejudice in argument to a jury are highly
improper and cannot be condoned, and trial courts should ever be
alert to prevent them. P. 310 U. S.
239 .

															10. Although some of the remarks made to the jury by government
counsel in argument of this case appealed to class prejudice, were
undignified and intemperate, and did not comport with the standards
of propriety expected of a prosecutor, they are, in the particular
circumstances, not regarded as prejudicial, but as minor
aberrations in a prolonged trial of a strong case which could not
have influenced the minds of jurors. P. 310 U. S.
239 .

															11. Statements made in argument to the jury by government
counsel in a prosecution under the Sherman Act to the effect that
it was the wish and desire of the highest officials in the
Government to have the defendants convicted held not
ground for a new trial, because the defendants had sought to
justify their activities as done with government approval and
because the statements were but casual episodes in a long
summation, and not at all reflective of the quality of the argument
as a whole. Pp. 310 U. S.
241 -242.

															12. Assertions of personal knowledge, made in argument to the
jury by government counsel, held not prejudicial where
they related to a matter irrelevant to the case and, upon
objection, were withdrawn, and the jury instructed to disregard
them. P. 310 U. S.
242 .

															13. The granting of a new trial to some of the defendants
convicted of a conspiracy does not require that a new trial be
granted to the others, where participation by the former was not
necessary to the existence of the crime charged and the jury was
instructed that it could convict any of the defendants found to
have been members of the combination, and that it need not convict
all or none. Pp. 310 U. S. 243 , 310 U. S.
246 .

															14. In a Sherman Act case, as in other conspiracy cases, the
grant of a new trial to some defendants and its denial to others is
not per se reversible error. After the jury's verdict has
been set aside as respects some of the alleged coconspirators,
those remaining cannot seize on that action as ground for the
granting of a new trial to them unless they can establish that such
action was so clearly prejudicial to them that the denial of their
motions constituted a plain abuse of discretion. P. 310 U. S.
247 . Page 310 U. S. 154 15. As a general rule, neither this Court nor the Circuit Court
of Appeals will review the action of a federal trial court in
granting or denying a motion for a new trial for error of fact,
since such action is a matter within the discretion of the trial
court. P. 310 U. S.
247 .

															16. A denial of a motion for new trial on the ground that the
verdict was against the weight of the evidence is not subject to
review. P. 310 U. S.
248 .

															17. Where an indictment charges various means by which a
conspiracy is to be effectuated, not all of them need be proved. P. 310 U. S.
249 .

															18. Where a price-fixing conspiracy, violating the Sherman Act,
embraced, at least by clear implication, the making of sales at
advanced prices to jobbers and consumers in a wide area, held that prosecution would lie in a judicial district
within that area and within which such sales were made by any of
the conspirators, though the conspiracy was formed elsewhere. P. 310 U. S.
250 .

															19. Conspiracies under the Act are not dependent on the doing of
any act other than the act of conspiring, as a condition of
liability. P. 310 U. S.
252 .

															105 F.2d 809 reversed.

															Certiorari, 308 U.S. 540, on cross-petitions, to review the
rulings of the court below in a case involving the indictment and
conviction of corporations and individuals for a conspiracy in
violation of § 1 of the Sherman Anti-Trust Act. The opinion of the
District Court is reported in 23 F. Supp.
937 . Page 310 U. S. 165 MR. JUSTICE DOUGLAS delivered the opinion of the Court.

															Respondents [ Footnote 1 ]
were convicted by a jury, [ Footnote
2 ] 23 F. Supp.
937 , under an indictment charging violations of § 1 of the
Sherman Anti-Trust Act, [ Footnote
3 ] 26 Stat. 209, 50 Stat. 693. Page 310 U. S. 166 The Circuit Court of Appeals reversed and remanded for a new
trial. 105 F.2d 809. The case is here on a petition and
cross-petition for certiorari, both of which we granted because of
the public importance of the issues raised. 308 U.S. 540. I . The Indictment. The indictment was returned in December, 1936, in the United
States District Court for the Western District of Wisconsin. It
charges that certain major oil companies, [ Footnote 4 ] selling gasoline in the Mid-Western area
[ Footnote 5 ] (which includes
the Western District of Wisconsin), (1) "combined and conspired
together for the purpose of artificially raising and fixing the
tank car prices of gasoline" in the "spot markets" in the East
Texas [ Footnote 6 ] and
Mid-Continent [ Footnote 7 ]
fields; (2) "have artificially raised and fixed said spot market
tank car prices of gasoline and have maintained said prices at
artificially high and noncompetitive levels, and at levels agreed
upon among them and have thereby intentionally increased and fixed
the tank car prices of gasoline contracted to be sold and sold in
interstate commerce as aforesaid in the Mid-Western area;" (3)
"have arbitrarily," by reason of the provisions of the prevailing
form of jobber contracts which made the price to the jobber
dependent on the average spot market price, "exacted large sums of
money from thousands of jobbers with Page 310 U. S. 167 whom they have had such contracts in said Mid-Western area;" and
(4) "in turn have intentionally raised the general level of retail
prices prevailing in said Mid-Western area."

															The manner and means of effectuating such
conspiracy are alleged in substance as follows: defendants, from
February, 1935, to December, 1936, "have knowingly and unlawfully
engaged and participated in two concerted gasoline buying programs"
for the purchase

															"from independent refiners in spot transactions of large
quantities of gasoline in the East Texas and Mid-Continent fields
at uniform, high, and at times progressively increased prices."

															The East Texas buying program is alleged to have embraced
purchases of gasoline in spot transactions from most of the
independent refiners in the East Texas field, who were members of
the East Texas Refiners' Marketing Association, formed in February,
1935, with the knowledge and approval of some of the defendants
"for the purpose of selling and facilitating the sale of gasoline
to defendant major oil companies." It is alleged that arrangements
were made and carried out for allotting orders for gasoline
received from defendants among the members of that association, and
that such purchases amounted to more than 50% of all gasoline
produced by those independent refiners. The Mid-Continent buying
program is alleged to have included "large and increased purchases
of gasoline" by defendants from independent refiners located in the
Mid-Continent fields pursuant to allotments among themselves. Those
purchases, it is charged, were made from independent refiners who
were assigned to certain of the defendants at monthly meetings of a
group representing defendants. It is alleged that the purchases in
this buying program amounted to nearly 50% of all gasoline sold by
those independents. As respects both the East Texas and the
Mid-Continent buying programs, it is alleged that the purchases of
gasoline were in excess of the amounts which defendants would
have Page 310 U. S. 168 purchased but for those programs; that, at the instance of
certain defendants, these independent refiners curtailed their
production of gasoline.

															The independent refiners selling in these programs were named as
coconspirators, but not as defendants.

															Certain market journals -- Chicago Journal of Commerce, Platt's
Oilgram, National Petroleum News -- were made defendants. [ Footnote 8 ] Their participation in the
conspiracy is alleged as follows: that they have been "the chief
agencies and instrumentalities" through which the wrongfully raised
prices "have affected the prices paid by jobbers, retail dealers,
and consumers for gasoline in the Mid-Western area," that they
"knowingly published and circulated as such price quotations the
wrongfully and artificially raised and fixed prices for gasoline
paid by" defendants in these buying programs, while "representing
the price quotations published by them" to be gasoline prices
"prevailing in spot sales to jobbers in tank car lots" and while
"knowing and intending them to be relied on as such by jobbers and
to be made the basis of prices to jobbers." Jurisdiction and venue in the Western District
of Wisconsin are alleged as follows: that most of defendant major
oil companies have sold large quantities of gasoline in tank car
lots to jobbers in that district at the "artificially raised and
fixed and noncompetitive prices;" that they have "solicited and
taken contracts and orders" for Page 310 U. S. 169 gasoline in that district, and that they have required retail
dealers and consumers therein "to pay artificially increased prices
for gasoline" pursuant to the conspiracy. The methods of marketing and selling gasoline in the
Mid-Western area are set forth in the indictment in some detail.
Since we hereafter develop the facts concerning them, it will
suffice at this point to summarize them briefly. Each defendant
major oil company owns, operates, or leases retail service stations
in this area. It supplies those stations, as well as independent
retail stations, with gasoline from its bulk storage plants. All
but one sell large quantities of gasoline to jobbers in tank car
lots under term contracts. In this area, these jobbers exceed 4,000
in number, and distribute about 50% of all gasoline distributed to
retail service stations therein, the bulk of the jobbers' purchases
being made from the defendant companies. The price to the jobbers
under those contracts with defendant companies is made dependent on
the spot market price, pursuant to a formula hereinafter discussed.
And the spot market tank car prices of gasoline directly and
substantially influence the retail prices in the area. In sum, it
is alleged that defendants, by raising and fixing the tank car
prices of gasoline in these spot markets, could and did increase
the tank car prices and the retail prices of gasoline sold in the
Mid-Western area. The vulnerability of these spot markets to that
type of manipulation or stabilization is emphasized by the
allegation that spot market prices published in the journals were
the result of spot sales made chiefly by independent refiners of a
relatively small amount of the gasoline sold in that area --
virtually all gasoline sold in tank car quantities in spot market
transactions in the Mid-Western Page 310 U. S. 170 area being sold by independent refiners, such sales amounting to
less than 5% of all gasoline marketed therein.

															So much for the indictment. II . Background of the Alleged Conspiracy. Evidence was introduced (or respondents made offers of proof)
showing or tending to show the following conditions preceding the
commencement of the alleged conspiracy in February, 1935. As we
shall develop later, these facts were, in the main, relevant to
certain defenses which respondents at the trial unsuccessfully
sought to interpose to the indictment.

															Beginning about 1926, there commenced a period of production of
crude oil in such quantities as seriously to affect crude oil and
gasoline markets throughout the United States. Overproduction was
wasteful, reduced the productive capacity of the oil fields, and
drove the price of oil down to levels below the cost of production
from pumping and stripper [ Footnote
9 ] wells. When the price falls below such cost, those wells
must be abandoned. Once abandoned, subsurface changes make it
difficult or impossible to bring those wells back into production.
Since such wells constitute about 40% of the country's known oil
reserves, conservation requires that the price of crude oil be
maintained at a level which will permit such wells to be operated.
As Oklahoma and Kansas were attempting to remedy the situation
through their proration laws, the largest oil field in history was
discovered in East Texas. That was in 1930. The supply of oil from
this Page 310 U. S. 171 field was so great that, at one time, crude oil sank to 10 or 15
cents a barrel, and gasoline was sold in the East Texas field for 2
1/8� a gallon. Enforcement by Texas of its proration law was
extremely difficult. Orders restricting production were violated,
the oil unlawfully produced being known as "hot oil" and the
gasoline manufactured therefrom, "hot gasoline." Hot oil sold for
substantially lower prices than those posted for legal oil. Hot
gasoline therefore cost less, and at times could be sold for less
than it cost to manufacture legal gasoline. The latter, deprived of
its normal outlets, had to be sold at distress prices. The
condition of many independent refiners using legal crude oil was
precarious. In spite of their unprofitable operations, they could
not afford to shut down, for, if they did so, they would be apt to
lose their oil connections in the field and their regular
customers. Having little storage capacity, they had to sell their
gasoline as fast as they made it. As a result, their gasoline
became "distress" gasoline -- gasoline which the refiner could not
store, for which he had no regular sales outlets, and which
therefore he had to sell for whatever price it would bring. Such
sales drove the market down.

															In the spring of 1933, conditions were acute. The wholesale
market was below the cost of manufacture. As the market became
flooded with cheap gasoline, gasoline was dumped at whatever price
it would bring. On June 1, 1933, the price of crude oil was 25� a
barrel; the tank car price of regular gasoline was 2 5/8� a gallon.
In June. 1933. Congress passed the National Industrial Recovery
Act, 48 Stat. 195. Sec. 9(c) of that Act authorized the President
to forbid the interstate and foreign shipment of petroleum and its
products produced or withdrawn from storage in violation of state
laws. By Executive Order, the President, on July 11, 1933, forbade
such shipments. On August 19, 1933, a code of fair competition Page 310 U. S. 172 for the petroleum industry was approved. [ Footnote 10 ] The Secretary of the Interior was
designated as Administrator of that Code. He established a
Petroleum Administrative Board to "advise with and make
recommendations" to him. A Planning and Coordination Committee was
appointed, of which respondent Charles E. Arnott, a vice-president
of Socony-Vacuum, was a member, to aid in the administration of the
Code. In addressing that Committee in the fall of 1933, the
Administrator said: "Our task is to stabilize the oil industry upon
a profitable basis." Considerable progress was made. The price of
crude oil was a dollar a barrel near the end of September, 1933, as
a result of the voluntary action of the industry, [ Footnote 11 ] but, according to respondents,
in accordance with the Administrator's policy and desire. In April,
1934, an amendment to the Code was adopted under which an attempt
was made to balance the supply of gasoline with the demand by
allocating the amount of crude oil which each refiner could process
with the view of creating a firmer condition in the market, and
thus increasing the Page 310 U. S. 173 price of gasoline. [ Footnote
12 ] This amendment also authorized the Planning and
Coordination Committee, with the approval of the President, to make
suitable arrangements for the purchase of gasoline from
nonintegrated or semi-integrated refiners and the resale of the
same through orderly channels. Thereafter, four buying programs
were approved by the Administrator. [ Footnote 13 ] These permitted the major companies to
purchase distress gasoline from the independent refiners. Standard
forms of contract were provided. The evil aimed at was, in part at
least, the production of hot oil and hot gasoline. The contracts
(to at least one of which the Administrator was a party) were made
pursuant to the provisions of the National Industrial Recovery Act
and the Code, and bound the purchasing company to buy fixed amounts
of gasoline at designated prices [ Footnote 14 ] on condition that the seller Page 310 U. S. 174 should abide by the provisions of the Code. According to the
1935 Annual Report of the Secretary of the Interior, these buying
programs were not successful, as

															"the production of gasoline from 'hot oil' continued, stocks of
gasoline mounted, wholesale prices for gasoline remained below
parity with crude oil prices, and, in the early fall of 1934, the
industry approached a serious collapse of the wholesale market.
[ Footnote 15 ]"

															Restoration of the price of gasoline to parity with crude oil at
one dollar per barrel was not realized.

															The flow of hot oil out of East Texas continued. Refiners in the
field could procure such oil for 35� or less a barrel and
manufacture gasoline from it for 2 or 2 1/2� a gallon. This
competition of the cheap hot gasoline drove the price of legal
gasoline down below the cost of production. The problem of distress
gasoline also persisted. The disparity between the price of
gasoline and the cost of crude oil, which had been at $1 per barrel
since September, 1933, caused losses to many independent refiners,
no matter how efficient they were. In October, 1934, the
Administrator set up a Federal Tender Board and issued an order
making it illegal to ship crude oil or gasoline out of East Texas
in interstate or foreign commerce unless it were accompanied by a
tender issued by that Board certifying that it had been legally
produced or manufactured. Prices rose sharply. But the improvement
was only temporary, as the enforcement of § 9(c) of the Act was
enjoined in a number of suits. On January 7, 1935, this Court held
§ 9(c) to be unconstitutional. Panama Refining Co. v.
Ryan, 293 U. S. 388 .
Following that decision, there was a renewed influx of hot gasoline
into the Mid-Western area and the tank car market fell. Page 310 U. S. 175 Meanwhile, the retail markets had been swept by a series of
price wars. These price wars affected all markets -- service
station, tank wagon, and tank car. Early in 1934 the Petroleum
Administrative Board tried to deal with them -- by negotiating
agreements between marketing companies and persuading individual
companies to raise the price level for a period. On July 9, 1934,
that Board asked respondent Arnott, chairman of the Planning and
Coordination Committee's Marketing Committee, [ Footnote 16 ] if he would head up a voluntary
cooperative movement to deal with price wars. According to Arnott,
he pointed out that, in order to stabilize the retail market, it
was necessary to stabilize the tank car market through elimination
of hot oil and distress gasoline. [ Footnote 17 ] On July 20, 1934, the Administrator wrote
Arnott, described the disturbance caused by price wars, and
said:

															"Under Article VII, Section 3 of the Code, it is the duty of the
Planning and Coordination Committee to cooperate with the
Administration as a planning and fair practice agency for the
industry. I am therefore requesting you, as Chairman of the
Marketing Committee of the Planning and Coordination Committee, to
take action which we deem necessary to restore markets to their
normal conditions in areas where wasteful competition has caused
them to become depressed. The number and extent of these situations
would make it impractical for the Petroleum Administrative Board,
acting alone, to deal with each specific situation. Therefore, I am
requesting Page 310 U. S. 176 and authorizing you, as Chairman of the Marketing Committee, to
designate committees for each locality when and as price wars
develop, with authority to confer and to negotiate and to hold due
public hearings with a view to ascertaining the elements of
conflict that are present, and, in a cooperative manner, to
stabilize the price level to conform to that normally prevailing in
contiguous areas where marketing conditions are similar. Any
activities of your Committee must, of course, be consistent with
the requirements of Clause 2 of Sub-section (a) of Section III of
the Act. . . . [ Footnote 18 ]
" Page 310 U. S. 177 After receiving that letter, Arnott appointed a General
Stabilization Committee with headquarters in Washington and a
regional chairman in each region. Over fifty state and local
committees were set up. The Petroleum Administrative Board worked
closely with Arnott and the committees until the end of the Code
near the middle of 1935 . The effort (first local, then statewide,
and finally regional) was to eliminate price wars by negotiation
and by persuading suppliers to see to it that those who bought from
them sold at a fair price. In the first week of December, 1934,
Arnott held a meeting of the General Stabilization Committee in
Chicago and a series of meetings on the next four or five days
attended by hundreds of members of the industry from the middle
west. These meetings were said to have been highly successful in
elimination of many price wars. Arnott reported the results to
members of the Petroleum Administrative Board on December 18, 1934,
and stated that he was going to have a follow-up meeting in the
near future. It was at that next meeting that the groundwork for
the alleged conspiracy was laid. III . The Alleged Conspiracy. The alleged conspiracy is not to be found in any formal contract
or agreement. It is to be pieced together from the testimony of
many witnesses and the contents of over 1,000 exhibits, extending
through the 3,900 printed pages of the record. What follows is
based almost entirely on unequivocal testimony or undisputed
contents of exhibits, only occasionally on the irresistible
inferences from those facts. Page 310 U. S. 178 A. FORMATION OF THE MID-CONTINENT BUYING PROGRAM The next meeting of the General Stabilization Committee was held
in Chicago on January 4, 1935, and was attended by all of the
individual respondents, by representatives of the corporate
respondents, and by others. Representatives of independent refiners
present at the meeting complained of the failure of the price of
refined gasoline to reach a parity with the crude oil price of $1 a
barrel. And complaints by the independents of the depressing effect
on the market of hot and distress gasoline were reported. Views
were expressed to the effect that, "if we were going to have
general stabilization in retail markets, we must have some sort of
a firm market in the tank car market." As a result of the
discussion, Arnott appointed a Tank Car Stabilization Committee
[ Footnote 19 ] to study the
situation and make a report, or, to use the language of one of
those present, "to consider ways and means of establishing and
maintaining an active and strong tank car market on gasoline."
Three days after this committee was appointed, this Court decided Panama Refining Co. v. Ryan, supra. As we have said, there
was evidence that, following that decision, there was a renewed
influx of hot gasoline into the Mid-Western area, with a consequent
falling off of the tank car market prices.

															The first meeting of the Tank Car Committee was held February 5,
1935, and the second on February 11, 1935. At these meetings, the
alleged conspiracy was formed, the substance of which, so far as it
pertained to the Mid-Continent phase, was as follows:

															It was estimated that there would be between 600 and 700 tank
cars of distress gasoline produced in the Mid-Continent Page 310 U. S. 179 oil field every month by about 17 independent refiners. These
refiners, not having regular outlets for the gasoline, would be
unable to dispose of it except at distress prices. Accordingly, it
was proposed and decided that certain major companies (including
the corporate respondents) would purchase gasoline from these
refiners. The Committee would assemble each month information as to
the quantity and location of this distress gasoline. Each of the
major companies was to select one (or more) of the independent
refiners having distress gasoline as its "dancing partner,"
[ Footnote 20 ] and would
assume responsibility for purchasing its distress supply. In this
manner, buying power would be coordinated, purchases would be
effectively placed, and the results would be much superior to the
previous haphazard purchasing. There were to be no formal
contractual commitments to purchase this gasoline, either between
the major companies or between the majors and the independents.
Rather, it was an informal gentlemen's agreement or understanding
whereby each undertook to perform his share of the joint
undertaking. Page 310 U. S. 180 Purchases were to be made at the "fair going market price."

															A Mechanical Sub-Committee [ Footnote 21 ] was appointed to find purchasers for any new
distress gasoline which might appear between the monthly meetings
of the Tank Car Stabilization Committee, and to handle detailed
problems arising during these periods. It was agreed that any such
attempt to stabilize the tank car market was hopeless until the
flow of hot gasoline was stopped. But it was expected that a bill
pending before Congress to prohibit interstate shipment of hot
gasoline would soon be enacted, which would deal effectively with
that problem. Accordingly, it was decided not to put any program
into operation until this bill had been enacted and became
operative. It was left to respondent Arnott to give the signal for
putting the program into operation after this had occurred.

															The Connally Act, 49 Stat. 30, became law on February 22, 1935.
The enforcement agency under this act was the Federal Tender Board
which was appointed about March 1st. It issued its first tenders
March 4th. On March 1st, respondents Arnott and Ashton explained
the buying program to a group of Mid-Continent independent refiners
in Kansas City, who expressed a desire to cooperate and who
appointed a committee to attend a meeting of the Tank Car
Stabilization Committee in St. Louis on March 5th to learn more
about the details. This meeting was held with the committee of the
independents present as one of the sessions. At a later session
that day, the final details of the Mid-Continent buying program
were worked out, including an assignment Page 310 U. S. 181 of the "dancing partners" among the major companies. [ Footnote 22 ] On March 6th, Ashton
telephoned Arnott and told him what had been accomplished at the
St. Louis meeting. Later the same day, Arnott told Ashton by
telephone that the program should be put into operation as soon as
possible, since the Federal Tender Board seemed to be cleaning up
the hot oil situation in East Texas. Ashton advised McDowell,
chairman of the Mechanical Sub-Committee, of Arnott's instructions.
And, on March 7th, that committee went into action. They divided up
the major companies; each communicated with those on his list,
advised them that the program was launched, and suggested that they
get in touch with their respective "dancing partners." Before the
month was out, all companies alleged to have participated in the
program (except one or two) made purchases; 757 tank cars were
bought from all but three of the independent refiners who were
named in the indictment as sellers. B. THE MID-CONTINENT BUYING PROGRAM IN OPERATION No specific term for the buying program was decided upon, beyond
the first month. But it was started with the hope of its
continuance from month to month. And, in fact, it did go on for
over a year, as we shall see.

															The concerted action under this program took the following
form:

															The Tank Car Stabilization Committee had A. V. Bourque,
Secretary of the Western Petroleum Refiners' Page 310 U. S. 182 Association, [ Footnote
23 ] make a monthly survey, showing the amount of distress
gasoline which each independent refiner would have during the
month. From March, 1935, through February, 1936, that Committee met
once a month. At these meetings, the surveys showing the amount and
location of distress gasoline were presented and discussed. They
usually revealed that from 600 to 800 tank cars of distress
gasoline would become available during the month. Each member of
the Committee present would indicate how much his company would
buy, and from whom. Those companies which were not represented at
the meetings were approached by the Mechanical Sub-Committee; "word
was gotten to them as to the amount of gasoline that it was felt
they could take in that month." Also, as we have stated, the
Mechanical Sub-Committee would endeavor to find purchasers for any
new distress gasoline which appeared between the meetings of the
Tank Car Stabilization Committee. It would report such new
surpluses to Bourque. The functions of the Mechanical Sub-Committee
were apparently not restricted merely to dissemination of
information to the buyers. One of its members testified that he
urged the majors to buy more distress gasoline. Throughout,
persuasion was apparently used to the end that all distress
gasoline would be taken by the majors, and so kept from the tank
car markets. As the program progressed, most of the major companies
continued to buy from the same "dancing partners" with whom they
had started.

															One of the tasks of the Mechanical Sub-Committee was to keep
itself informed as to the current prices of Page 310 U. S. 183 gasoline and to use its persuasion and influence to see to it
that the majors paid a fair going market price, and did not
"chisel" on the small refiners. It did so. At its meetings during
the spring of 1935, the question of the fair going market price was
discussed. For example, Jacobi, a member of the Sub-Committee,
testified that, at the meeting of March 14, 1935, "the
sub-committee . . . arrived at what we thought was a fair market
price for the week following," viz., 3 2/4� and 4 2/4�.
[ Footnote 24 ] Jacobi termed
these prices arrived at by the Sub-Committee as the "recommended
prices." He made it a practice of recommending these prices to the
major companies with which he communicated. According to his
testimony, those "recommendations" were represented by him to be
not the Sub-Committee's, but his own, idea. McDowell testified that
he never made any such price recommendations, but, if asked, would
tell the purchasing companies what his own company was paying for
gasoline. [ Footnote 25 ] Up
to June 7, 1935, price "recommendations" were made five or seven
times, each time the "recommended" prices constituting a price
advance of 1/8� or 1/4� over the previous "recommendation." No more
price "recommendations" were made in 1935. In January, 1936, there
was an advance in the price of crude oil. The members of the
Sub-Committee discussed the price situation and concluded that an
advance of 1/2� a gallon of gasoline purchased under the program
should be made. Jacobi made that "recommendation" to the companies
on his list. Page 310 U. S. 184 We shall discuss later the effect of this buying program on the
market.

															The major companies regularly reported to Bourque, the trade
association representative of the Mid-Continent independent
refiners, the volume of their purchases under the program and the
prices paid. Representatives of one of the corporate respondents
repeatedly characterized its purchases under the program as
"quotas," "obligations," or "allocations." They spoke of one of its
"dancing partners" under the buying program as "one of the babies
placed in our lap last spring when this thing was inaugurated." And
they stated that

															"we don't have much choice as to whose material we are to take,
when we purchase outside third grade gasoline in connection with
the Buying Program Committee's operations. On such purchases, we
have refineries 'assigned' to us."

															This was doubtless laymen's, not lawyers,' language. As we have
said, there does not appear to have been any binding commitment to
purchase; the plan was wholly voluntary; there is nothing in the
record to indicate that a participant would be penalized for
failure to cooperate. But, though the arrangement was informal, it
was nonetheless effective, as we shall see. And, as stated by the
Circuit Court of Appeals, there did appear to be at least a moral
obligation to purchase the amounts specified at the fair market
prices "recommended." That alone would seem to explain why some of
the major companies cancelled or declined to enter into profitable
deals for the exchange of gasoline with other companies in order to
participate in this buying program. Respondent Skelly Oil Co.
apparently lost at least some of its pipeline transportation profit
of 2/16� a gallon "on every car of gasoline" purchased by it in the
buying program. And both that company and respondent Wadhams Oil
Co. continued to make purchases of gasoline under the program
although they were unable then to dispose of it. Page 310 U. S. 185 Up to June, 1935, the expenses incurred by the members of the
Mechanical Sub-Committee were charged to and paid by the Planning
and Coordination Committee of the Code of Fair Competition for the
Petroleum Industry. On May 27, 1935, this Court held, in A.L.A.
Schechter Poultry Corp. v. United States, 295 U.
S. 495 , that the codemaking authority conferred by the
National Industrial Recovery Act was an unconstitutional delegation
of legislative power. Shortly thereafter, the Tank Car
Stabilization Committee held a meeting to discuss their future
course of action. It was decided that the buying program should
continue. Accordingly, that Committee continued to meet each month
through February, 1936. The procedure at these meetings was
essentially the same as at the earlier ones. Gradually the buying
program worked almost automatically, as contacts between buyer and
seller became well established. The Mechanical Sub-Committee met at
irregular intervals until December, 1935. Thereafter, it conducted
its work on the telephone. C. FORMATION AND NATURE OF THE EAST TEXAS BUYING
PROGRAM In the meetings when the Mid-Continent buying program was being
formulated, it was recognized that it would be necessary or
desirable to take the East Texas surplus gasoline off the market so
that it would not be a "disturbing influence in the Standard of
Indiana territory." The reason was that weakness in East Texas spot
market prices might make East Texas gasoline competitive with
Mid-Continent gasoline in the Mid-Western area, and thus affect
Mid-Continent spot market prices. The tank car rate on gasoline
shipments from the East Texas field to points in the Mid-Western
area was about 1/8� a gallon higher than from the Mid-Continent
field. With East Texas spot market prices more then 1/8� a Page 310 U. S. 186 gallon below Mid-Continent spot market prices, there might well
be a resulting depressing effect on the Mid-Continent spot market
prices. [ Footnote 26 ]

															Early in 1935, the East Texas Refiners' Marketing Association
was formed to dispose of the surplus gasoline manufactured by the
East Texas refiners. The occasion for the formation of this
Association was the stoppage of the shipment of hot oil and
gasoline as a consequence of a Texas law enacted in December, 1934.
As long as these refiners had operated on cheap hot oil, they had
been able to compete for business throughout the Middle West. If
they used legal crude at a dollar a barrel, their costs would
increase. Their shift from a hot oil to a legal oil basis
necessitated a change in their marketing methods. They were already
supplying jobbers and dealers of Texas with all the gasoline they
could use. Hence, their problem was to find additional markets for
the surplus gasoline which they manufactured from legal crude. The
Association was to act as the sales agency for those surpluses.
Shipments north would be against the freight differential.
Therefore, without regular outlets for this surplus gasoline, they
would have been forced to dump it on the market at distress prices.
Their plan was to persuade the major companies, if possible, to buy
more East Texas gasoline and to purchase it through the
Association, which would allocate it among its members who had
surpluses. Neil Buckley, a buyer for Cities Service Page 310 U. S. 187 Export Corporation in Tulsa, was recommended by one of the
independents as the contact man. Buckley undertook the job.
[ Footnote 27 ]

															Thus, it was not established that the major companies caused the
Association to be formed. But it is clear that the services of the
Association were utilized in connection with a buying program by
defendant companies. The record is quite voluminous on the
activities of Buckley in getting the support of the majors to the
Association's program. Suffice it to say that he encountered many
difficulties, most of them due to the suspicion and mistrust of the
majors as a result of the earlier hot oil record of the East Texas
independents. His initial task was to convince the majors of the
good faith of the East Texas independents. Many conferences were
had. Arnott gave help to Buckley. Thus, on March 1, 1935, Arnott
wired a small group of representatives of major companies, who were
buyers and users of East Texas gasoline, inviting them to attend a
meeting in New York City on March 6th

															"to hear outcome my meeting with East Texas refiners and to
consider future action surplus gasoline this and other groups that
is awaiting our decision . . . matter of extreme importance."

															The problem was discussed at that meeting, [ Footnote 28 ] but reliable information was
lacking as to the probable amount of distress gasoline, the size of
the independents' federal allocations, and whether or not such
gasoline was going to be manufactured within Page 310 U. S. 188 those allocations. Accordingly, Arnott appointed a committee to
attend the meeting of the District Allocators [ Footnote 29 ] on March 13th and to obtain the
information. That information was obtained, and a schedule was
prepared showing the probable amount of surplus gasoline in East
Texas and the Gulf, the names of the regular buyers in those areas,
and the amounts they might take. Arnott, on March 14th, by
telegraph called another meeting in New York City for the next day,
saying "The question of surplus gasoline which has been under
consideration must be finalized tomorrow." At that meeting, someone
(apparently a representative of respondent Sinclair) "arose with a
slip of paper in his hand and stated that it had been suggested"
that each of 12 to 15 major companies "take so much gasoline" from
East Texas, "the amounts being read off as to what each company
would take." Nothing definite was decided at the meeting. Buckley
continued his efforts, talking with Arnott and representatives of
other majors. It is impossible to find from the record the exact
point of crystalization of a buying program. But it is clear that,
as a result of Buckley's and Arnott's efforts and of the
discussions at the various meetings, various major companies did
come into line, and that a concerted buying program was launched.
The correspondence of employees of some of the majors throughout
the period in question is replete with references such as the
following: "buying program in East Texas;" "our allocation of five
cars per day;" "a general buying movement;" "regular weekly
purchases from the East Texas group;" "allocations and purchases"
in the East Texas field, and the like. Page 310 U. S. 189 In 1935, the East Texas refiners named in the indictment sold
285,592,188 gallons of gasoline. Of this, certain defendant
companies [ Footnote 30 ]
bought 40,195,754 gallons, or 14.07%. In the same year, all
independent refiners in East Texas sold 378,920,346 gallons --
practically all of it on the spot market. Of this amount, those
defendant companies purchased 12.03% or 45,598,453 gallons. Of the
8,797 tank cars purchased by all defendants (except Sinclair) from
March, 1935, through April, 1936, from independent refiners in the
East Texas field, 2,412 tank cars were purchased by the present
corporate respondents.

															Every Monday morning, the secretary of the East Texas
association ascertained from each member the amount of his
forthcoming weekly surplus gasoline and the price he wanted. He
used the consensus of opinion as the asking price. He would call
the major companies; they would call him. He exchanged market
information with them. Orders received for less than the asking
price would not be handled by the Association; rather, the
secretary would refer the buyer to one of the independents, who
might sell at the lower price. Very few cars were purchased through
the Association by others than the major oil companies. [ Footnote 31 ] The majors bought about
7,000 tank cars through the Association in 1935, and about 2,700
tank cars in the first four months of 1936. And, in 1935, the
secretary of the Association placed an additional 1,000 tank cars
by bringing the purchasers and the independent refiners together.
The purchases in 1935 in East Texas were, with minor exceptions,
either Page 310 U. S. 190 at the low or slightly below the low quotation in Platt's
Oilgram, following it closely as the market rose in March, April,
and May, 1935; they conformed to the market as it flattened out
into more or less of a plateau through the balance of 1935, with a
low for third grade gasoline of 4 5/8�. This was consistent with
the policy of the buying program. For the majors were requested to
purchase at the "fair going market price." [ Footnote 32 ] And it is clear that this East
Texas buying program was, as we have said, supplementary or
auxiliary to the Mid-Continent program. As stated in March, 1935,
in an inter-company memorandum of one of the majors:

															". . . with east coast refiners having a program to purchase
surplus East Texas gasoline over the next four months, we feel that
still further advances can be made in the tank car market, and a
resultant increase in the service station price." D. SCOPE AND PURPOSE OF THE ALLEGED CONSPIRACY As a result of these buying programs, it was hoped and intended
that both the tank car and the retail markets would improve. The
conclusion is irresistible that defendants' purpose was not merely
to raise the spot market prices, but, as the real and ultimate end,
to raise the price of gasoline in their sales to jobbers and
consumers in the Mid-Western area. Their agreement or plan embraced
not only buying on the spot markets, but also, at least by clear
implication, an understanding to maintain such improvements in
Mid-Western prices as would result from those purchases of distress
gasoline. The latter obviously would be achieved by selling at the
increased prices, not Page 310 U. S. 191 by price-cutting. Any other understanding would have been wholly
inconsistent with and contrary to the philosophy of the broad
stabilization efforts which were under way. In essence, the raising
and maintenance of the spot market prices were but the means
adopted for raising and maintaining prices to jobbers and
consumers. The broad sweep of the agreement was indicated by Arnott
before a group of the industry on March 13, 1935. He described the
plan as one

															"whereby this whole stabilization effort of markets, the holding
up of normal sales market structures, the question of the
realization of refineries, the working together of those two great
groups in order that we may balance this whole picture and in order
that we may interest a great many buyers in this so-called surplus
or homeless gasoline, can be done along organized lines. . . ."

															Certainly there was enough evidence to support a finding by the
jury that such were the scope and purpose of the plan.

															But there was no substantial competent evidence that defendants,
as charged in the indictment, induced the independent refiners to
curtail their production. E. MARKETING AND DISTRIBUTION METHODS Before discussing the effect of these buying programs, some
description of the methods of marketing and distributing gasoline
in the Mid-Western area during the indictment period is
necessary.

															The defendant companies sold about 83% of all gasoline sold in
the Mid-Western area during 1935. As we have noted, major
companies, such as most of the defendants, are those whose
operations are fully integrated -- producing crude oil, having
pipelines for shipment of the crude to its refineries, refining
crude oil, and marketing gasoline at retail and at wholesale.
During the greater part of the indictment period, the defendant
companies Page 310 U. S. 192 owned and operated many retail service stations [ Footnote 33 ] through which they sold about
20% of their Mid-Western gasoline in 1935 and about 12% during the
first seven months of 1936. Standard Oil Company (Indiana)
[ Footnote 34 ] was known
during this period as the price leader or market leader throughout
the Mid-Western area. It was customary for retail distributors,
whether independent or owned or controlled by major companies, to
follow Standard's posted retail prices. Its posted retail price in
any given place in the Mid-Western area was determined by computing
the Mid-Continent spot market price and adding thereto the tank car
freight rate from the Mid-Continent field, taxes, and 5 1/2�. The 5
1/2� was the equivalent of the customary 2� jobber margin and 3
1/2� service station margin. In this manner, the retail price
structure throughout the Mid-Western area during the indictment
period was based, in the main, on Mid-Continent spot market
quotations, [ Footnote 35 ]
or, as stated by one of the witnesses for the defendants, the spot
market was a "peg to hang the price structure on."

															About 24% of defendant companies' sales in the Mid-Western area
in 1935 were to jobbers, who perform the function of middlemen or
wholesalers. Since 1925, jobbers were purchasing less of their
gasoline on the spot tank car markets and more under long-term
supply contracts from major companies and independent refiners.
These contracts usually ran for a year or more, and covered all of
the jobber's gasoline requirements during the period. The price
which the jobber was to pay over the life of the contract was not
fixed, but a formula for its computation Page 310 U. S. 193 was included. About 80% or more of defendant companies' jobber
contracts provided that the price of gasoline sold thereunder
should be the Mid-Continent spot market price on the date of
shipment. This spot market price was to be determined by averaging
the high and low spot market quotations reported in the Chicago
Journal of Commerce and Platt's Oilgram or by averaging the high
and low quotations reported in the Journal alone. The contracts
also gave the jobber a wholly or partially guaranteed margin
between the price he had to pay for the gasoline and the normal
price to service stations -- customarily a 2� margin. [ Footnote 36 ]

															There is no central exchange or market place for spot market
transactions. Each sale is the result of individual bargaining
between a refiner and his customers, sales under long-term
contracts not being included. It is a "spot" market because
shipment is to be made in the immediate future -- usually within
ten or fifteen days. Sales on the spot tank car markets are either
sales to jobbers or consumers, sales by one refiner to another not
being included. [ Footnote
37 ] The prices paid by jobbers and consumers in the various
spot markets are published daily Page 310 U. S. 194 in the trade journals, Platt's Oilgram and Chicago Journal of
Commerce. In the case of the Oilgram, these prices are obtained by
a market checker who daily calls refiners in the various refinery
areas (major companies as well as independents) and ascertains the
quantity and price of gasoline which they have sold to jobbers in
spot sales. [ Footnote 38 ]
After checking the prices so obtained against other sources of
information (such as brokers' sales), and after considering the
volume of sales reported at each price, he determines the lowest
and highest prices at which gasoline is being sold to jobbers in
substantial quantities on the spot market. [ Footnote 39 ] Thus, if he finds that substantial
sales are reported at 5 1/8�, 5 1/4� and 5 2/8�, the Oilgram
reports a price range of 5 1/8-5 2/8�. The result is published in
the Oilgram that same day. [ Footnote 40 ] The Chicago Journal of Commerce Publishes
similar quotations the day after the sales are reported. And its
quotations cover sales to industrial consumers, as well as to
jobbers. But it was not shown that either journal had published
prices paid by a major company as a price paid by jobbers on the
tank car market. F. THE SPOT MARKET PRICES DURING THE BUYING PROGRAM In 1935, the 14 independent Mid-Continent refiners named in the
indictment sold 377,988,736 gallons of gasoline. Of that output,
the corporate respondents purchased Page 310 U. S. 195 about 56,200,000 gallons, or approximately 15%, [ Footnote 41 ] and the defendant companies
who went to trial about 17%. The monthly purchases of all defendant
companies from Mid-Continent independents from March, 1935, to
April, 1936, usually ranged between 600 and 900 tank cars, and in a
few months somewhat exceeded those amounts.

															Major company buying began under the Mid-Continent program on
March 7, 1935. During the week before that buying commenced, the
Mid-Continent spot market for third grade gasoline rose 2/8�. The
low quotation on third grade gasoline was 3 1/2� on March 6, 1935.
It rose to 4 2/4� early in June. That advance was evidenced by ten
successive steps. The market on third grade gasoline then leveled
out on a plateau which extended into January, 1936, except for a
temporary decline in the low quotation late in 1935. By the middle
of January, the low again had risen, this time to 5 1/4�. It held
substantially at that point until the middle of February, 1936. By
the end of February, it had dropped to 5�. It then leveled off at
that low and remained there into May, 1936, when the low dropped
first to 4 7/8� and then to 4 2/4�. It stayed there until the first
week in July, 1936. The low then rose to 4 7/8�, maintained that
level until mid-August, then started to drop until, by successive
steps, it had declined to 4 1/2� before the middle of September. It
stayed there Page 310 U. S. 196 until early October, when it rose to 4 5/8�, continuing at that
level until middle November, when it rose to 4 2/4�. The low
remained at substantially that point throughout the balance of
1936.

															During 1935, as the Mid-Continent spot market for third grade
gasoline was rising, so was the East Texas spot market. And when,
in June, 1935, the former leveled off for the balance of the year
at a low of 4 2/4�, the latter [ Footnote 42 ] leveled off, as we have seen, at a low of 4
5/8�.

															During this period, there were comparable movements on the
Mid-Continent spot market for regular gasoline. From a low of 4
2/8� on March 7, 1935, it rose to a low of 5 5/8� early in June,
that advance being evidenced by nine successive steps. As in the
case of third-grade gasoline, the market for regular gasoline then
leveled out on a plateau which extended into January, 1936. By the
middle of January, the low had risen to 6 1/8�. It held at that
point until the middle of February 1936. By the end of February, it
had dropped to 5 7/8�. It rose to 6� in the first week of March,
leveled off at that low and remained there into August, 1936. By
mid-August, it started to drop -- reaching 5 1/2� in September,
going to 5 5/8� in October and to 5 2/4� in November, where it
stayed through the balance of 1936.

															These plateaus are clearly shown by a chart of the market
journals' quotations. But that does not, of course, mean that all
sales on the spot market were made between the high and the low
during the period in question. As we have said, the quotations of
the market journals merely indicated the range of prices (usually
an eighth) within which the bulk of the gasoline was being sold.
Hence, actual sales took place above the high and below Page 310 U. S. 197 the low. Thus, between June and December, 1935, while the low
for third grade gasoline remained substantially at 4 2/4� and the
high at 4 7/8�, jobbers' and consumers' purchases [ Footnote 43 ] ranged from 4 2/8� to 5 1/8�.
A similar condition existed as respects regular gasoline.

															Purchases by the major companies likewise did not always fall
within the range of these quotations. In fact, between 85 and 90%
of their purchases from the independent refiners were made at
prices which were at or below the low quotations in the market
journals. [ Footnote 44 ] Page 310 U. S. 198 There were few such purchases above the high and not a
substantial percentage at the high. [ Footnote 45 ] G. JOBBER AND RETAIL PRICES DURING THE BUYING
PROGRAMS That the spot market prices controlled prices of gasoline sold
by the majors to the jobbers in the Mid-Western area during the
indictment period is beyond question. For, as we have seen, the
vest majority of jobbers' supply contracts during that period
contained price formulae which were directly dependent on the
Mid-Continent spot market prices. [ Footnote 46 ] Hence, as the latter rose, the prices to the
jobbers under those contracts increased.

															There was also ample evidence that the spot market prices
substantially affected the retail prices in the Mid-Western area
during the indictment period. As we have seen, Standard of Indiana
was known during this period as the price or market leader
throughout this area. It was customary for the retailers to follow
Standard's posted retail prices, which had as their original base
the Mid-Continent spot market price. Standard's policy was Page 310 U. S. 199 to make changes in its posted retail price only when the spot
market base went up or down at least 2/10� a gallon and maintained
that change for a period of 7 days or more. [ Footnote 47 ] Standard's net reduction in posted
prices for the 6 months preceding March, 1935, was 1.9� per gallon.
From March, 1935, to June, 1935, its posted retail prices were
advanced 2/10� four times.

															Retail prices in the Mid-Western area kept close step with
Mid-Continent spot market prices during 1935 and 1936, though there
was a short lag between advances in the spot market prices and the
consequent rises in retail prices. [ Footnote 48 ] This was true in general both of the
subnormal [ Footnote 49 ] Page 310 U. S. 200 and normal retail prices. To be sure, when the tank car spot
market leveled out on a plateau from June to the end of 1935, there
was not quite the same evenness in the higher plateau of the
average retail prices. For there were, during the period in
question, large numbers of retail price cuts in various parts of
the Mid-Western area, though they diminished substantially during
the spring and summer of 1935. Yet the average service station
price [ Footnote 50 ] (less
tax), having reached 13.26� by the middle of April (from 12.56�
near the first of March), never once fell below that amount;
advanced regularly to 13.83� by the middle of June; declined to
13.44� in August, and, after an increase to 13.60� during the last
of the summer, remained at 13.41� during the balance of 1935 except
for a minor intermediate drop. In sum, the contours of the retail
prices conformed in general to those of the tank car spot markets.
The movements of the two were not just somewhat comparable; they
were strikingly similar. Irrespective of whether the tank car spot
market prices controlled the retail prices in this area, there was
substantial competent evidence that they influenced them --
substantially and effectively. And, in this connection, it will be
recalled that, when the buying program was formulated, it was in
part predicated on the proposition that a firm tank car market was
necessary for a stabilization of the retail markets. As reported by
one who attended the meeting on February 5, 1935, where the buying
program was being discussed: "It was generally assumed that all
companies would come into the picture, since a stable retail market
requires a higher tank car market." Page 310 U. S. 201 IV . Other Circumstances Allegedly Relevant to the Offense Charged in the Indictment The following facts or circumstances were developed at the trial
by testimony or other evidence or were embraced in offers or proof
made by respondents. A. ALLEGED KNOWLEDGE AND ACQUIESCENCE OF THE FEDERAL GOVERNMENT Such of the following facts as were included in respondents'
offers of proof were not sought to be proved in order to establish
immunity from prosecution under the antitrust laws. For admittedly
the authorization under the National Industrial Recovery Act
necessary for such immunity [ Footnote 51 ] had not been obtained. Rather, respondents'
offers of proof were made in order to show the circumstances which,
respondents argue, should be taken into consideration in order to
judge the purpose, effect, and reasonableness of their activities
in connection with the buying program.

															Arnott testified that, on January 8 or 9, 1935, he reported the
appointment of the Tank Car Stabilization Committee to officials of
the Petroleum Administrative Board who, he said, expressed great
interest in it. A member of that Committee, late in January, 1935,
advised the chairman of that Board of the "necessity for action in
getting tank car prices up before it is too late." The chairman
replied that

															"the tank car situation in relation to the price of crude is one
about which we have no disagreement. How to bring about a
correction is the stumbling block."

															There was evidence that at least general information concerning
the meetings of the Tank Car Stabilization Committee was given a
representative of the Board in February, 1935. In March, 1935, the
Code Page 310 U. S. 202 authorities, with the approval of the Administrator, asked the
major companies to curtail their manufacture of gasoline during
that month by 1,400,000 barrels. The purpose was said to be to aid
the small refiners by forcing the majors to buy part of their
requirements from them. A voluntary curtailment of some 960,000
barrels was made.

															On March 12, 1935, Arnott saw the Chairman and at least one
other representative of the Board. Among other things, the buying
programs were discussed. Arnott did not ask for the Board's
approval of these programs, nor its "blessing." A representative of
the Board testified that Arnott told them that he was conducting
those buying programs "on his own responsibility." Arnott denied
this. The Chairman of the Board asked Arnott if the programs
violated the antitrust laws. Arnott said he did not believe they
did, and described what his group was doing. Arnott testified that
he felt that the Board thought the program was sound, and hoped it
would work, and that, if he had thought they disapproved, he would
have discontinued his activities. There was no evidence that the
Board told Arnott to discontinue the program. But, on March 13,
1935, Arnott, in addressing the District Allocators' meeting said,
respecting these buying programs:

															"I am perfectly conscious that we have made other efforts at
times to have this question dealt with. It has always been done in
group form. That has involved agreements, group agreements. Those
of us who have had anything to do whatsoever with the whole
national picture, who have come to Washington and have had any
experience with the PAB and eventually the Department of Justice,
know just how long that road is, and for some good reason, or for
some unknown reason, or for no reason Page 310 U. S. 203 at all, those agreements seem to have disappeared; those
outstanding attempts -- and they were really sincere and worthy
attempts -- have disappeared in a sort of cloud of mystery, and I
don't think I, for one, or anybody else can tell you just where
they have gone -- they are out of our minds, they are completed,
they are finished, and we are not interested."

															Respondents also offered to prove that a committee of the
industry (the Blazer Committee) appointed by the Administrator to
study the condition of the small units in the industry, made a
report to him in March, 1935, which stated, inter alia, as
a recommendation:

															"We know of nothing, apart from continued improvement in crude
production control, which would be so helpful to the tank-car price
of gasoline at this time as the substantial buying of distress
gasoline by major companies. We understand a program of this sort
is being considered by the Industry now in connection with a broad
stabilization program. We therefore urge that the Administrator
give it his approval and active support. [ Footnote 52 ]"

															They also offered a memorandum dated March 22, 1935, from the
Chairman of the Petroleum Administrative Page 310 U. S. 204 Board to the Administrator [ Footnote 53 ] commenting on the above report and making
the following suggestion:

															"We believe success in Code administration, assuming that it is
to continue, requires that some of the recommendations made should
be adopted -- e.g., we have encouraged stabilization
efforts designed at this time to aid the independent refiner. . .
."

															On April 2, 1935, the Administrator wrote Arnott, referred to
his letter of July 20, 1934, and stated, inter alia: "The matter that at present concerns me is the necessity of
complying with the requirements of the basic law. In authorizing
the formulation of a stabilization program, I necessarily
conditioned the authority granted, by providing that the
requirements of Clause 2 of Subsection (a) of Section 3 of the
National Industrial Recovery Act should be observed. I know you
will appreciate that agreements between supplying companies which
might be in conflict with the antitrust laws of the United States
require specific approval after due consideration if companies are
to receive the protection afforded by Sections 4 and 5 of the
National Industrial Recovery Act. " Page 310 U. S. 205 "I understand that the temporary character of a number of
situations and the need for immediate action has made formalized
agreements impracticable, and, in a number of instances, they may
be unnecessary. However, when the understandings arrived at as
bases of solution of price wars affecting the industry over a
considerable area are intended to operate over a definite period of
time or involve substantial changes in the policy of the various
supplying companies made only in consideration of similar action on
the part of other companies, it is necessary that the procedure
required by the Recovery Act be followed in order that the
arrangement be legal. If any such agreements have been made, I
should like a report as to them. If they require approval to be
effective . . . , I should be glad to give consideration to them
under the provisions of the Act."

															On April 22, 1935, the Petroleum Administrative Board wrote a
letter to Arnott imposing three conditions on general stabilization
work: (1) there should be no stabilization meeting without a
representative of the Board being present; (2) every element in the
industry should be heard from before any decisions were made; (3)
no general instructions should be given under the July 20, 1934,
letter. A meeting of Arnott's committee and members of the Board
was held on May 8, 1935. A representative of the Board testified
that they called Arnott "on the carpet to request him to explain"
to them "what he had been doing." Arnott's group considered the
conditions imposed by the Board quite impossible. The Board
assigned two of its staff to work the problem out with one of
Arnott's men. According to the testimony of one of the
representatives of the Board at that meeting, Arnott Page 310 U. S. 206 did not ask for the Board's approval of the buying programs --
nothing being said "one way or the other, about approval or
disapproval." And he testified that Arnott in substance was told at
that meeting by the Board's Chairman that the letter of July 20,
1934, from the Administrator to Arnott (quoted supra, p. 310 U. S. 175 )
did not give authority to conduct any buying program, [ Footnote 54 ] and that Arnott said he
was not relying on that letter for approval. Arnott, however,
testified that he recalled no such statement made by the Board's
Chairman. Apparently, however, Arnott, in answer to questions, gave
a general explanation of the buying programs, stating that the
majors were continuing informally to buy, that there was no pool,
that no one was obliged to make purchases, that they were trying to
lift from independent refiners distress gasoline which was
burdening the market. [ Footnote
55 ]

															Respondents also offered to prove that, on May 14, 1935, the
Chairman of the Petroleum Administrative Board asked Arnott to
undertake to stabilize the Pennsylvania refinery market in the way
that he had stabilized the Mid-Continent refinery market; that, in
connection with this request, the Board evinced support and
approval Page 310 U. S. 207 of the Mid-Continent buying program, and that Arnott undertook
to do what he could in the matter and called a meeting of the
Pennsylvania refiners for May 28, 1935. Apparently the Schechter decision terminated that undertaking.

															Respondents also offered portions of a final report [ Footnote 56 ] prepared by the
Marketing Division of the Petroleum Administrative Board which
discussed the work of the General Stabilization Committee,
[ Footnote 57 ] saying, inter alia: "One of the most important was the tank-car committee, which
attempted to get the tank-car market raised more in line with the
price of crude recovery cost on the theory that a firm tank-car
market was essential to a stabilized retail structure."

															And respondents offered testimony of a member of the Board
before a Senate Committee in 1937 respecting the "buying pool
efforts, that began in December of 1933 and continued from then on
during the entire period of the Petroleum Code." That testimony
was:

															"It was an effort of the Department and the industrial
committees to bring about the normal relationship between gasoline
prices and crude oil prices, in order to permit the independent,
non integrated, refiner to be able to operate without loss."

															In sum, respondents by this and similar evidence offered to
establish that the Petroleum Administrative Board knew of the
buying programs and acquiesced in them. And respondents by those
facts, together with those discussed under 310 U.
S. supra, undertook to show that their
objective under the buying programs were in line Page 310 U. S. 208 with those of the Federal government under the Code: to keep the
price of crude oil at a minimum of $1 a barrel; to restore the
wholesale price level of gasoline at the refinery to a parity with
crude oil; to stabilize retail prices at a normal spread between
the refinery price and the retail price. B. OTHER FACTORS ALLEGED TO HAVE CAUSED OR
CONTRIBUTED TO THE RISE IN THE SPOT MARKET Respondents do not contend that the buying programs were not a
factor in the price rise and in the stabilization of the spot
markets during 1935 and 1936. But they do contend that they were
relatively minor ones, because of the presence of other economic
forces such as the following: 1. Control of production of crude oil Under the Code, an attempt was made for the first time to
balance the production of crude oil with the consumptive demand for
gasoline. Monthly estimates of gasoline consumption would be made
by the Bureau of Mines. The quantity of crude oil necessary to
satisfy that demand was also estimated, broken down into allowables
for each state, and recommended to the states. And there was
evidence that the states would approximately conform to those
recommendations. After the Code, the oil states continued the same
practice under an Interstate Compact which permitted them to agree
as to the quantities of crude oil which they would allow to be
produced. [ Footnote 58 ] 2. Connally Act As we have noted, this law was enacted late in February, 1935,
and began to be effective the first part of March, 1935. Prior to
this act, control of hot oil by the states Page 310 U. S. 209 had not been effective for any extended period of time.
Throughout 1933 and 1934, from 150,000 to 200,000 barrels of crude
oil a day were estimated to have been produced in East Texas in
excess of the state's allowables, much of it going into interstate
commerce. After the Connally Act went into operation, no hot
gasoline went into interstate commerce, according to respondents'
evidence. 3. $1 Crude oil As we have noted, crude oil was brought to a dollar a barrel
near the end of September, 1933. Before the Connally Act, however,
hot oil flooded the market at substantially lower prices. Gasoline
produced from hot oil forced the price of gasoline produced from
crude oil down below cost. But, with the elimination of the hot
oil, fluctuations in the price of crude ceased. This had a
stabilizing effect on the price of gasoline. 4. Increase in consumptive demand Beginning in the spring of 1935, there was an increase in demand
for gasoline. During the whole indictment period, every month
showed an increase over the corresponding month in the previous
year. For the entire year of 1935, consumption for the country as a
whole was 7% more than for 1934; that for 1936 was about 10% over
1935 -- substantially the same increases taking place in the
Mid-Western area. 5. Control of inventory withdrawal and of manufacture of
gasoline Under the Code, crude oil could be withdrawn from storage only
with the approval of the Administrator. Also, under the Code, there
were manufacturing quotas for gasoline which, through Code
authorities, were allocated among the refiners. In March, 1935, as
we have seen, gasoline inventories of the majors were reduced by
over Page 310 U. S. 210 900,000 barrels through a voluntary curtailment program. The
demand was so heavy that the industry withdrew from storage and
refined over 22,000,000 barrels of crude oil in storage in 1935.
Further, imports of crude oil were limited by order of the
Administrator. 6. Improved business conditions The years 1935 and 1936 were marked by improving general
business conditions and rising prices everywhere.

															Much testimony was taken on these and related points. It was
designed to show that, under the conditions which existed during
the indictment period, stability in the market was to be expected
from the play of these various economic forces. For it was argued
that, by reason of those forces, supply and demand were brought
into a reasonable continuing balance with the resultant
stabilization of the markets. And there was much testimony from
respondents' witnesses that the above factors, as well as the
buying programs, did contribute to price stability during this
period. But no witness assumed to testify as to how much of a
factor the buying program had been. V . Application of the Sherman Act A. CHARGE TO THE JURY The court charged the jury that it was a violation of the
Sherman Act for a group of individuals or corporations to act
together to raise the prices to be charged for the commodity which
they manufactured where they controlled a substantial part of the
interstate trade and commerce in that commodity. The court stated
that, where the members of a combination had the power to raise
prices and acted together for that purpose, the combination was
illegal, and that it was immaterial how reasonable or unreasonable
those prices were or to what extent they had been affected by the
combination. It further charged that, if such illegal combination
existed, Page 310 U. S. 211 it did not matter that there may also have been other factors
which contributed to the raising of the prices. In that connection,
it referred specifically to the economic factors which we have
previously discussed and which respondents contended were primarily
responsible for the price rise and the spot markets' stability in
1935 and 1936 -- viz., control of production, the Connally
Act, the price of crude oil, an increase in consumptive demand,
control of inventories and manufacturing quotas, and improved
business conditions. The court then charged that, unless the jury
found beyond a reasonable doubt that the price rise and its
continuance were "caused" by the combination and not caused by
those other factors, verdicts of "not guilty" should be returned.
It also charged that there was no evidence of governmental approval
which would exempt the buying programs from the prohibitions of the
Sherman Act, and that knowledge or acquiescence of officers of the
government or the good intentions of the members of the combination
would not give immunity from prosecution under that Act.

															The Circuit Court of Appeals held this charge to be reversible
error, since it was based upon the theory that such a combination
was illegal per se. In its view, respondents' activities
were not unlawful unless they constituted an unreasonable restraint
of trade. Hence, since that issue had not been submitted to the
jury, and since evidence bearing on it had been excluded, that
court reversed and remanded for a new trial so that the character
of those activities and their effect on competition could be
determined. In answer to the government's petition, respondents
here contend that the judgment of the Circuit Court of Appeals was
correct, since there was evidence that they had affected prices
only in the sense that the removal of the competitive evil of
distress gasoline by the buying programs had permitted prices to
rise to a normal competitive level; that their activities promoted,
rather Page 310 U. S. 212 than impaired, fair competitive opportunities, and therefore
that their activities had not unduly or unreasonably restrained
trade. And they also contend that certain evidence which was
offered should have been admitted as bearing on the purpose and end
sought to be attained, the evil believed to exist, and the nature
of the restraint and its effect. By their cross-petition,
respondents contend that the record contains no substantial
competent evidence that the combination, either in purpose or
effect, unreasonably restrained trade within the meaning of the
Sherman Act, and therefore that the Circuit Court of Appeals erred
in holding that they were not entitled to directed verdicts of
acquittal.

															In United States v. Trenton Potteries Co., 273 U.
S. 392 , this Court sustained a conviction under the
Sherman Act where the jury was charged that an agreement on the
part of the members of a combination, controlling a substantial
part of an industry, upon the prices which the members are to
charge for their commodity is, in itself, an unreasonable restraint
of trade without regard to the reasonableness of the prices or the
good intentions of the combining units. There, the combination was
composed of those who controlled some 82 percent of the business of
manufacturing and distributing in the United States vitreous
pottery. Their object was to fix the prices for the sale of that
commodity. In that case, the trial court refused various requests
to charge that the agreement to fix prices did not itself
constitute a violation of law unless the jury also found that it
unreasonably restrained interstate commerce. This Court reviewed
the various price-fixing cases under the Sherman Act, beginning
with United States v. Trans-Missouri Freight Assn., 166 U. S. 290 , and United States v. Joint Traffic Assn., 171 U.
S. 505 , and said

															". . . it has since often been decided and always assumed that
uniform Page 310 U. S. 213 price-fixing by those controlling in any substantial manner a
trade or business in interstate commerce is prohibited by the
Sherman Law, despite the reasonableness of the particular prices
agreed upon."

															(P. 273 U. S. 398 )
This Court pointed out that the so-called "rule of reason"
announced in Standard Oil Co. v. United States, 221 U. S. 1 , and in United States v. American Tobacco Co., 221 U. S.
1 06, had not affected this view of the illegality of
price-fixing agreements. And, in holding that agreements "to fix or
maintain prices" are not reasonable restraints of trade under the
statute merely because the prices themselves are reasonable, it
said (pp. 273 U. S.
397 ):

															"The aim and result of every price-fixing agreement, if
effective, is the elimination of one form of competition. The power
to fix prices, whether reasonably exercised or not, involves power
to control the market and to fix arbitrary and unreasonable prices.
The reasonable price fixed today may. through economic and business
changes. become the unreasonable price of tomorrow. Once
established, it may be maintained unchanged because of the absence
of competition secured by the agreement for a price reasonable when
fixed. Agreements which create such potential power may well be
held to be in themselves unreasonable or unlawful restraints,
without the necessity of minute inquiry whether a particular price
is reasonable or unreasonable as fixed and without placing on the
government in enforcing the Sherman Law the burden of ascertaining
from day to day whether it has become unreasonable through the mere
variation of economic conditions. Moreover, in the absence of
express legislation requiring it, we should hesitate to adopt a
construction making the difference between legal and illegal
conduct in the field of business relations depend upon so uncertain
a test as whether prices are reasonable -- a determination which
can be satisfactorily made Page 310 U. S. 214 only after a complete survey of our economic organization and a
choice between rival philosophies."

															In conclusion, this Court emphasized that the Sherman Act is not
only a prohibition against the infliction of a particular type of
public injury, but also, as stated in Standard Sanitary Mfg.
Co. v. United States, 226 U. S. 20 , 226 U. S. 49 , a
"limitation of rights" which may be "pushed to evil consequences,
and therefore restrained."

															But respondents claim that other decisions of this Court afford
them adequate defenses to the indictment. Among those on which they
place reliance are Appalachian Coals, Inc. v. United
States, 288 U. S. 344 ; Sugar Institute, Inc. v. United States, 297 U.
S. 553 ; Maple Flooring Mfrs.' Assn. v. United
States, 268 U. S. 563 ; Cement Mfrs.' Protective Assn. v. United States, 268 U. S. 588 ; Chicago Board of Trade v. United States, 246 U.
S. 231 , and the American Tobacco and Standard Oil cases, supra. But we do not think that line of cases is apposite. As clearly
indicated in the Trenton Potteries case, the American
Tobacco and Standard Oil cases have no application to
combinations operating directly on prices or price structures.

															And we are of the opinion that Appalachian Coals, Inc. v.
United States, supra, is not in point.

															In that case, certain producers of bituminous coal created an
exclusive selling agency for their coal. The agency was to
establish standard classifications and sell the coal of its
principals at the best prices obtainable. The occasion for the
formation of the agency was the existence of certain so-called
injurious practices and conditions in the industry. One of these
was the problem of "distress coal" -- coal shipped to the market
which was unsold at the time of delivery and therefore dumped on
the market irrespective of demand. The agency was to promote the
systematic study of the marketing and distribution Page 310 U. S. 215 of coal, its demand and consumption; to maintain an inspection
and an engineering department to demonstrate to customers the
advantages of this type of coal and to promote an extensive
advertising campaign; to provide a research department to
demonstrate proper and efficient methods of burning coal, and thus
to aid producers in their competition with substitute fuels; to
operate a credit department dealing with the reliability of
purchasers, and to make the sale of coal more economical. That
agency was also to sell all the coal of its principals at the best
prices obtainable and, if all could not be sold, to apportion
orders upon a stated basis. And, save for certain stated
exceptions, it was to determine the prices at which sales would be
made without consultation with its principals. This Court concluded
that, so far as actual purpose was concerned, the defendant
producers were engaged in a "fair and open endeavor to aid the
industry in a measurable recovery from its plight." And it observed
that the plan did not either contemplate or involve "the fixing of
market prices;" that defendants would not be able to fix the price
of coal in the consuming markets; that their coal would continue to
be subject to "active competition." To the contention that the plan
would have a tendency to stabilize market prices and to raise them
to a higher level, this Court replied (p. 288 U. S.
374 ):

															"The fact that the correction of abuses may tend to stabilize a
business, or to produce fairer price levels, does not mean that the
abuses should go uncorrected, or that cooperative endeavor to
correct them necessarily constitutes an unreasonable restraint of
trade. The intelligent conduct of commerce through the acquisition
of full information of all relevant facts may properly be sought by
the cooperation of those engaged in trade, although stabilization
of trade and more reasonable prices may be the result. " Page 310 U. S. 216 In distinguishing the Trenton Potteries case, this
Court said (p. 288 U. S.
375 ):

															"In the instant case there is, as we have seen, no intent or
power to fix prices, abundant competitive opportunities will exist
in all markets where defendants' coal is sold, and nothing has been
shown to warrant the conclusion that defendants' plan will have an
injurious effect upon competition in these markets."

															Thus, in reality, the only essential thing in common between the
instant case and the Appalachian Coals case is the
presence in each of so-called demoralizing or injurious practices.
The methods of dealing with them were quite divergent. In the
instant case, there were buying programs of distress gasoline which
had as their direct purpose and aim the raising and maintenance of
spot market prices and of prices to jobbers and consumers in the
Mid-Western area by the elimination of distress gasoline as a
market factor. The increase in the spot market prices was to be
accomplished by a well organized buying program on that market:
regular ascertainment of the amounts of surplus gasoline;
assignment of sellers among the buyers; regular purchases at prices
which would place and keep a floor under the market. Unlike the
plan in the instant case, the plan in the Appalachian
Coals case was not designed to operate vis a vis the
general consuming market and to fix the prices on that market.
Furthermore, the effect, if any, of that plan on prices was not
only wholly incidental, but also highly conjectural. For the plan
had not then been put into operation. Hence, this Court expressly
reserved jurisdiction in the District Court to take further
proceedings if, inter alia, in "actual operation" the plan
proved to be "an undue restraint upon interstate commerce." And as
we have seen it would per se constitute such a restraint
if price-fixing were involved. Page 310 U. S. 217 Nor are Maple Flooring Mfrs.' Assn. v. United States and Cement Mfrs.' Protective Assn. v. United States,
supra, at all relevant to the problem at hand. For the systems
there under attack were methods of gathering and distributing
information respecting business operations. It was noted in those
cases that there was not present any agreement for price-fixing.
And they were decided, as indicated in the Trenton
Potteries case, on the express assumption that any agreement
for price-fixing would have been illegal per se. And since
that element was lacking, the only issues were whether or not on
the precise facts there presented such activities of the
combinations constituted unlawful restraints of commerce. A
majority of the Court held that they did not.

															Nor can respondents find sanction in Chicago Board of Trade
v. United States, supra, for the buying programs here under
attack. That case involved a prohibition on the members of the
Chicago Board of Trade from purchasing or offering to purchase
between the closing of the session and its opening the next day
grains (under a special class of contracts) at a price other than
the closing bid. The rule was somewhat akin to rules of an exchange
limiting the period of trading, for, as stated by this Court, the
"restriction was upon the period of price-making." No attempt was
made to show that the purpose or effect of the rule was to raise or
depress prices. The rule affected only a small proportion of the
commerce in question. And among its effects was the creation of a
public market for grains under that special contract class where
prices were determined competitively and openly. Since it was not
aimed at price manipulation or the control of the market prices,
and since it had "no appreciable effect on general market prices,"
the rule survived as a reasonable restraint of trade.

															There was no deviation from the principle of the Trenton
Potteries case in Sugar Institute, Inc. v. United
States, Page 310 U. S. 218 supra. For, in that case, so-called competitive abuses
were not permitted as defenses to violations of the Sherman Act
bottomed on a trade association's efforts to create and maintain a
uniform price structure.

															Thus, for over forty years, this Court has consistently and
without deviation adhered to the principle that price-fixing
agreements are unlawful per se under the Sherman Act, and
that no showing of so-called competitive abuses or evils which
those agreements were designed to eliminate or alleviate may be
interposed as a defense. And we reaffirmed that well established
rule in clear and unequivocal terms in Ethyl Gasoline Corp. v.
United States, 309 U. S. 436 ,
where we said:

															"Agreements for price maintenance of articles moving in
interstate commerce are, without more, unreasonable restraints
within the meaning of the Sherman Act because they eliminate
competition, United States v. Trenton Potteries Co., 273 U. S.
392 , and agreements which create potential power for
such price maintenance exhibited by its actual exertion for that
purpose are in themselves unlawful restraints within the meaning of
the Sherman Act. . . ."

															Therefore, the sole remaining question on this phase of the case
is the applicability of the rule of the Trenton Potteries case to these facts.

															Respondents seek to distinguish the Trenton Potteries case from the instant one. They assert that, in that case, the
parties substituted an agreed-on price for one determined by
competition; that the defendants there had the power and purpose to
suppress the play of competition in the determination of the market
price, and therefore that the controlling factor in that decision
was the destruction of market competition, not whether prices were
higher or lower, reasonable or unreasonable. Respondents contend
that, in the instant case, there was no elimination in the spot
tank car market of competition Page 310 U. S. 219 which prevented the prices in that market from being made by the
play of competition in sales between independent refiners and their
jobber and consumer customers; that, during the buying programs,
those prices were in fact determined by such competition; that the
purchases under those programs were closely related to or dependent
on the spot market prices; that there was no evidence that the
purchases of distress gasoline under those programs had any effect
on the competitive market price beyond that flowing from the
removal of a competitive evil, and that, if respondents had tried
to do more than free competition from the effect of distress
gasoline and to set an arbitrary noncompetitive price through their
purchases, they would have been without power to do so.

															But we do not deem those distinctions material.

															In the first place, there was abundant evidence that the
combination had the purpose to raise prices. And likewise there was
ample evidence that the buying programs at least contributed to the
price rise and the stability of the spot markets, and to increases
in the price of gasoline sold in the Mid-Western area during the
indictment period. That other factors also may have contributed to
that rise and stability of the markets is immaterial. For, in any
such market movement, forces other than the purchasing power of the
buyers normally would contribute to the price rise and the market
stability. So far as cause and effect are concerned, it is
sufficient in this type of case if the buying programs of the
combination resulted in a price rise and market stability which,
but for them, would not have happened. For this reason, the charge
to the jury that the buying programs must have "caused" the price
rise and its continuance was more favorable to respondents than
they could have required. Proof that there was a conspiracy, that
its purpose was to raise prices, and that it caused or contributed
to a price rise Page 310 U. S. 220 is proof of the actual consummation or execution of a conspiracy
under § 1 of the Sherman Act.

															Secondly, the fact that sales on the spot markets were still
governed by some competition is of no consequence. For it is
indisputable that that competition was restricted through the
removal by respondents of a part of the supply which, but for the
buying programs, would have been a factor in determining the going
prices on those markets. But the vice of the conspiracy was not
merely the restriction of supply of gasoline by removal of a
surplus. As we have said, this was a well organized program. The
timing and strategic placement of the buying orders for distress
gasoline played an important and significant role. Buying orders
were carefully placed so as to remove the distress gasoline from
weak hands. Purchases were timed. Sellers were assigned to the
buyers so that regular outlets for distress gasoline would be
available. The whole scheme was carefully planned and executed to
the end that distress gasoline would not overhang the markets and
depress them at any time. And, as a result of the payment of fair
going market prices, a floor was placed and kept under the spot
markets. Prices rose and jobbers and consumers in the Mid-Western
area paid more for their gasoline than they would have paid but for
the conspiracy. Competition was not eliminated from the markets,
but it was clearly curtailed, since restriction of the supply of
gasoline, the timing and placement of the purchases under the
buying programs, and the placing of a floor under the spot markets
obviously reduced the play of the forces of supply and demand.

															The elimination of so-called competitive evils is no legal
justification for such buying programs. The elimination of such
conditions was sought primarily for its effect on the price
structures. Fairer competitive prices, it is claimed, resulted when
distress gasoline was removed from the market. But such defense is
typical of the protestations Page 310 U. S. 221 usually made in price-fixing cases. Ruinous competition,
financial disaster, evils of price-cutting, and the like appear
throughout our history as ostensible justifications for
price-fixing. If the so-called competitive abuses were to be
appraised here, the reasonableness of prices would necessarily
become an issue in every price-fixing case. In that event, the
Sherman Act would soon be emasculated; its philosophy would be
supplanted by one which is wholly alien to a system of free
competition; it would not be the charter of freedom which its
framers intended.

															The reasonableness of prices has no constancy due to the dynamic
quality of the business facts underlying price structures. Those
who fixed reasonable prices today would perpetuate unreasonable
prices tomorrow, since those prices would not be subject to
continuous administrative supervision and readjustment in light of
changed conditions. Those who controlled the prices would control
or effectively dominate the market. And those who were in that
strategic position would have it in their power to destroy or
drastically impair the competitive system. But the thrust of the
rule is deeper, and reaches more than monopoly power. Any
combination which tampers with price structures is engaged in an
unlawful activity. Even though the members of the price-fixing
group were in no position to control the market, to the extent that
they raised, lowered, or stabilized prices, they would be directly
interfering with the free play of market forces. The Act places all
such schemes beyond the pale, and protects that vital part of our
economy against any degree of interference. Congress has not left
with us the determination of whether or not particular price-fixing
schemes are wise or unwise, healthy or destructive. It has not
permitted the age-old cry of ruinous competition and competitive
evils to be a defense to price-fixing conspiracies. It has no more
allowed genuine or fancied Page 310 U. S. 222 competitive abuses as a legal justification for such schemes
than it has the good intentions of the members of the combination.
If such a shift is to be made, it must be done by the Congress.
Certainly Congress has not left us with any such choice. Nor has
the Act created or authorized the creation of any special exception
in favor of the oil industry. Whatever may be its peculiar problems
and characteristics, the Sherman Act, so far as price-fixing
agreements are concerned, establishes one uniform rule applicable
to all industries alike. There was accordingly no error in the
refusal to charge that in order to convict the jury must find that
the resultant prices were raised and maintained at "high, arbitrary
and noncompetitive levels." The charge in the indictment to that
effect was surplusage.

															Nor is it important that the prices paid by the combination were
not fixed in the sense that they were uniform and inflexible.
"Price-fixing," as used in the Trenton Potteries case, has
no such limited meaning. An agreement to pay or charge rigid,
uniform prices would be an illegal agreement under the Sherman Act.
But so would agreements to raise or lower prices whatever machinery
for price-fixing was used. That price-fixing includes more than the
mere establishment of uniform prices is clearly evident from the Trenton Potteries case itself, where this Court noted with
approval Swift & Co. v. United States, 196 U.
S. 375 , in which a decree was affirmed which restrained
a combination from "raising or lowering prices or fixing uniform
prices" at which meats will be sold. Hence, prices are fixed within
the meaning of the Trenton Potteries case if the range
within which purchases or sales will be made is agreed upon, if the
prices paid or charged are to be at a certain level or on ascending
or descending scales, if they are to be uniform, or if, by various
formulae, they are related to the market prices. They are fixed
because they are agreed upon. And the Page 310 U. S. 223 fact that, as here, they are fixed at the fair going market
price is immaterial. For purchases at or under the market are one
species of price-fixing. In this case, the result was to place a
floor under the market -- a floor which served the function of
increasing the stability and firmness of market prices. That was
repeatedly characterized in this case as stabilization. But, in
terms of market operations, stabilization is but one form of
manipulation. And market manipulation in its various manifestations
is implicitly an artificial stimulus applied to (or at times a
brake on) market prices, a force which distorts those prices, a
factor which prevents the determination of those prices by free
competition alone. Respondents, however, argue that there was no
correlation between the amount of gasoline which the major
companies were buying and the trend of prices on the spot markets.
They point to the fact that such purchasing was lightest during the
period of the market rise in the spring of 1935 and heaviest in the
summer and early fall of 1936, when the prices declined, and that
it decreased later in 1936, when the prices rose. But those facts
do not militate against the conclusion that these buying programs
were a species of price-fixing or manipulation. Rather, they are
wholly consistent with the maintenance of a floor under the market,
or a stabilization operation of this type, since the need for
purchases under such a program might well decrease as prices rose
and increase as prices declined.

															As we have indicated, the machinery employed by a combination
for price-fixing is immaterial.

															Under the Sherman Act, a combination formed for the purpose and
with the effect of raising, depressing, fixing, pegging, or
stabilizing the price of a commodity in interstate or foreign
commerce is illegal per se. Where the machinery for
price-fixing is an agreement on the prices to be charged or paid
for the commodity in the interstate or foreign channels of trade,
the power to fix prices exists Page 310 U. S. 224 if the combination has control of a substantial part of the
commerce in that commodity. Where the means for price-fixing are
purchases or sales of the commodity in a market operation or, as
here, purchases of a part of the supply of the commodity for the
purpose of keeping it from having a depressive effect on the
markets, such power may be found to exist though the combination
does not control a substantial part of the commodity. In such a
case, that power may be established if, as a result of market
conditions, the resources available to the combinations, the timing
and the strategic placement of orders and the like, effective means
are at hand to accomplish the desired objective. But there may be
effective influence over the market though the group in question
does not control it. Price-fixing agreements may have utility to
members of the group though the power possessed or exerted falls
far short of domination and control. Monopoly power ( United
States v. Patten, 226 U. S. 525 ) is
not the only power which the Act strikes down, as we have said.
Proof that a combination was formed for the purpose of fixing
prices, and that it caused them to be fixed or contributed to that
result, is proof of the completion of a price-fixing conspiracy
under § 1 of the Act. [ Footnote
59 ] The indictment in this case charged that this combination
had that purpose and effect. And there was abundant evidence to
support it. Hence, the existence of power on the part of members of
the combination to fix prices was but a conclusion from the finding
that the buying programs caused or contributed to the rise and
stability of prices. Page 310 U. S. 225 As to knowledge or acquiescence of officers of the Federal
government, little need be said. The fact that Congress, through
utilization of the precise methods here employed, could seek to
reach the same objective sought by respondents does not mean that
respondents or any other Page 310 U. S. 226 group may do so without specific Congressional authority.
Admittedly no approval of the buying programs was obtained under
the National Industrial Recovery Act prior to its termination on
June 16, 1935 (§ 2(c)) which would give immunity to respondents
from prosecution under the Sherman Act. Though employees of the
government may have known of those programs and winked at them or
tacitly approved them, no immunity would have thereby been
obtained. For Congress had specified the precise Page 310 U. S. 227 manner and method of securing immunity. None other would
suffice. Otherwise, national policy on such grave and important
issues as this would be determined not by Congress nor by those to
whom Congress had delegated authority, but by virtual volunteers.
The method adopted by Congress for alleviating the penalties of the
Sherman Act through approval by designated public representatives
[ Footnote 60 ] would be
supplanted by a foreign system. But even had approval been obtained
for the buying programs, that approval would not have survived the
expiration in June, 1935, of the Act which was the source of that
approval. As we have seen, the buying program continued unabated
during the balance of 1935 and far into 1936. As we said in United States v. Borden Co., 308 U.
S. 188 , 308 U. S. 202 ,
"[a] conspiracy thus continued is in effect renewed during each day
of its continuance." Hence, approval or knowledge and acquiescence
of federal authorities prior to June, 1935, could have no relevancy
to respondents' activities subsequent thereto. The fact that the
buying programs may have been consistent with the Page 310 U. S. 228 general objectives and ends sought to be obtained under the
National Industrial Recovery Act is likewise irrelevant to the
legality under the Sherman Act of respondents' activities either
prior to or after June, 1935. For, as we have seen, price-fixing
combinations which lack Congressional sanction are illegal per
se; they are not evaluated in terms of their purpose, aim, or
effect in the elimination of so-called competitive evils. Only in
the event that they were would such considerations have been
relevant.

															Accordingly, we conclude that the Circuit Court of Appeals erred
in reversing the judgments on this ground. A fortiori, the
position taken by respondents in their cross petition that they
were entitled to directed verdicts of acquittal is untenable. B. RESPONDENTS' OFFERS OF PROOF What we have said disposes of most of the errors alleged in
exclusion of evidence. The offers of proof covering the background
and operation of the National Industrial Recovery Act and the
Petroleum Code, the condition of the oil industry, the alleged
encouragement, cooperation, and acquiescence of the Federal
Petroleum Administration in the buying programs, and the like were
properly excluded, insofar as they bore on the nature of the
restraint and the purpose or end sought to be attained. For, as we
have seen, the reasonableness of the restraint was not properly an
issue in the case.

															There were, however, offers of proof alleged to be relevant to
the cause of the price rise and the subsequent stability of the
markets during the period in question.

															In addition to the foregoing offers, respondents sought to show
that the presence of hot oil and hot gasoline had greatly depressed
the market from 1932 to early in 1935, when the Connally Act became
effective, except for Page 310 U. S. 229 one short period from October to December, 1934; that, beginning
in October, 1934, shipment of hot oil from East Texas into
interstate commerce had for the first time been effectively
controlled; that, within a period of six weeks thereafter, the tank
car spot market rose 1 1/2� -- an amount corresponding to the price
rise from March to June, 1935; that the various factors which
primarily affect price were almost precisely the same in the fall
of 1934 as they were in the spring of 1935; that the price of
gasoline had borne a constant relationship to the price of crude
oil from January, 1918, to October, 1933 -- that relationship
disappearing when the price of hot oil fell below legal crude, but
reappearing in October, 1934, and again in March, 1935, when hot
oil was eliminated; that gasoline prices were more depressed than
the prices of other commodities and the cost of living in 1933 and
1934, and recovered and rose less than such other prices and the
cost of living in 1935 and 1936.

															We think there was no reversible error in exclusion of these
various offers.

															To the extent that they were designed to show that respondents,
by their buying programs, had not raised the spot market prices to
an artificial and noncompetitive level, these offers of proof were
properly denied as immaterial. For, as we have said, the
reasonableness of the prices and the fact that respondents'
activities merely removed from the market the depressive effect of
distress gasoline were not relevant to the issues.

															And, to the extent that these offers of proof were aimed at
establishing and evaluating other contributory causes for the price
rise and market stability during the indictment period, they were
not improperly denied. In the first place, the record is replete
with evidence showing the condition of the oil industry at the time
of the adoption of the code and during the code period. There
was Page 310 U. S. 230 ample testimony bearing on the other causal factors which
respondents contend were primarily responsible for the price rise
and market stability during the indictment period. Much of the
refused testimony was merely cumulative in nature. A trial court
has wide discretion in a situation of that kind. The trial lasted
about three and a half months. Terminal points are necessary even
in a conspiracy trial involving intricate business facts and legal
issues. In the second place, the offer to show the market
conditions late in 1934, when hot oil was temporarily under
control, was not improperly denied. There was substantial evidence
in the record to demonstrate the depressive market effect of hot
oil. While the offer was not wholly irrelevant to the issues, it
was clearly collateral. The trial court has a wide range for
discretion in the exclusion of such evidence. See Golden Reward
Mining Co. v. Buxton Mining Co., 97 F. 413, 416, 417; Chesterfield Mfg. Co. v. Leota Cotton Mills, 194 F. 358,
359. Admission of testimony showing the market conditions late in
1934 would have opened an inquiry into causal factors as involved
and interrelated as those present during the indictment period.
That might have confused, rather than enlightened, the jury. In any
event, it would not have eliminated the buying programs as
contributory causes to the market rise and stability in 1935 and
1936. And it would have prolonged the inquiry and protracted the
trial. As once stated by Mr. Justice Holmes, one objection to the
introduction of collateral issues is a "purely practical one -- a
concession to the shortness of life." Reeve v. Dennett, 145 Mass. 23, 28, 11 N.E. 938, 944. And see Union Stock Yard
& Transit Co. v. United States, 308 U.
S. 213 , 308 U. S.
223 -224. Similar reasons sustain the action of the trial
court in limiting the inquiry into general economic conditions
antedating and during the indictment period. In conclusion, we do
not think that there was an abuse of discretion by the Page 310 U. S. 231 trial court in the exclusion of the proffered evidence. A great
mass of evidence was received, the range of inquiry was wide, the
factual questions relating to the oil industry and respondents'
activities were intricate and involved. In such a case, a new trial
will not be ordered for alleged errors in exclusion of evidence
where matters of substance are not affected. See United States
v. Trenton Potteries Co., supra, p. 273 U. S.
404 . VI . Use of The Grand Jury Transcript The Circuit Court of Appeals held that the trial court committed
prejudicial error in refusing to permit defense counsel to inspect
the transcript of grand jury testimony used to refresh the
recollection of certain witnesses called by the government.
Respondents here urge that the use made of the grand jury
transcript was error because (1) they were denied the right to
inspect it, (2) it had not been properly authenticated, (3) the
reading of the grand jury testimony must have led the jury to
conclude that it was affirmative testimony, and (4) such testimony
was not given contemporaneously with the occurrences to which it
was related. And, in all respects, respondents contend that such
use of the grand jury testimony was highly prejudicial.

															There were about 90 instances when the government used that
testimony. In practically all those cases, the witnesses were
employees or representatives of respondents or former defendants,
or were closely associated with them. That most of them were
hostile witnesses -- evasive and reluctant to testify -- clearly
appears from a reading of their entire testimony. Each of those
witnesses had testified before the grand jury which returned the
indictment in the case. At times, counsel for the government would
state to the court that he was surprised at the witness' answer to
a question, and that it contradicted testimony before the grand
jury. More frequently, Page 310 U. S. 232 counsel would ask the witness if his memory could be refreshed
by his grand jury testimony. During the first part of the trial,
government counsel apparently read some grand jury testimony to two
witnesses from his notes. After objection had been made, the court
instructed counsel to use the transcript. Soon thereafter, and
early in the trial, the court adopted the practice of inspecting
the transcript and itself seeking to refresh the witness'
recollection by reading from his prior testimony. At no time was
the transcript shown to the witness. At all times, respondents
appropriately objected to the practice.

															Throughout the trial, the stated single reason for the use of
such prior testimony was the refreshment of the witness'
recollection. Counsel for the defense were ever alert to denounce
the practice, especially when it appeared that government counsel
might seek to impeach the witness. In such cases, the court
normally would sustain the objection or admonish government
counsel; or the question and answer would be stricken. In many
instances where such testimony was used, the incident ended by the
witness' merely saying that his recollection had not been
refreshed. In case it had been, he would state what his present
recollection was. Only in about one-sixth of the instances was any
inconsistency in testimony developed. In the balance, recollection
was either not refreshed or the testimony which had been given was
wholly or substantially consistent with the previous grand jury
testimony.

															During the trial, the court told the jury:

															"I have used some of the testimony and read some of it for the
purpose only of refreshing the witnesses' memories, and many times
I have indicated that there was no conflict, or nothing
inconsistent, between the testimony of the witness and the
transcript of testimony. The only reason we use this transcript of
testimony of each witness before the Grand Jury is to, if we can,
refresh their Page 310 U. S. 233 memories so as to enable them to recall correctly what the fact
is."

															And the court made a similar statement in its charge to the
jury.

															As in case of leading questions, St. Clair v. United
States, 154 U. S. 134 , 154 U. S. 150 ,
such use of grand jury testimony for the purpose of refreshing the
recollection of a witness rests in the sound discretion of the
trial judge. See Di Carlo v. United States, 6 F.2d 364,
367, 368; Bosselman v. United States, 239 F. 82, 85; Felder v. United States, 9 F.2d 872. He sees the witness,
can appraise his hostility, recalcitrance, and evasiveness or his
need for some refreshing material, and can determine whether or
not, under all the circumstances, the use of grand jury minutes is
necessary or appropriate for refreshing his recollection. As once
stated by Judge Hough, "The bald fact that the memory refreshing
words are found in the records of a grand jury is not a valid
objection." Felder v. United States, supra, p. 874.
Normally, of course, the material so used must be shown to opposing
counsel upon demand if it is handed to the witness. Morris v.
United States, 149 F. 123, 126; Lennon v. United
States, 20 F.2d 490, 493, 494; Wigmore, Evidence (2d ed.) §
762. And the reasons are that only in that way can opposing counsel
avoid the risks of imposition on, and improper communication with,
the witness, and "detect circumstances not appearing on the
surface" and "expose all that detracts from the weight of
testimony." See 2 Wigmore, supra, p. 42. The
first of these reasons has no relevancy here. And, as to the
second, no iron-clad rule requires that opposing counsel be shown
the grand jury transcript where it is not shown the witness and
where some appropriate procedure is adopted to prevent its improper
use. That again is a matter which rests in the sound discretion of
the court. Grand jury testimony is ordinarily confidential. See Wigmore, supra, § 2362. Page 310 U. S. 234 But after the grand jury's functions are ended, disclosure is
wholly proper where the ends of justice require it. See Metzler
v. United States, 64 F.2d 203, 206. Since there is no
inexorable rule which, under all circumstances, entitles the
witness and his counsel to see the prior statement made under oath,
and since, in this case, the court itself examined and thus
directly controlled the use of the grand jury testimony, we cannot
say that the refusal to make it available to counsel for the
defense is per se reversible error. To hold that it was
error in the instances here under review would be to find abuse of
discretion where, in fact, we conclude from the entire record on
this phase of the case that the judge supervised the procedure with
commendable fairness. In sum, the selective use of this testimony
and the precautions taken by the trial judge make it impossible for
us to say that he transcended the limits of sound discretion in
permitting it to be used by the government without making it
available to the defense.

															If the record showed that the refreshing material was
deliberately used for purposes not material to the issues, but to
arouse the passions of the jurors, so that an objective appraisal
of the evidence was unlikely, there would be reversible error.
Likewise, there would be error where, under the pretext of
refreshing a witness' recollection, the prior testimony was
introduced as evidence. Rosenthal v. United States, 248 F.
684, 686. But here, the grand jury testimony was used simply to
refresh the recollection on material facts, New York &
Colorado Mining Syndicate & Co. v. Fraser, 130 U.
S. 611 , not as independent affirmative evidence. Bates v. Preble, 151 U. S. 149 .
Furthermore, it was not used for impeachment purposes, and the
content of this refreshing material related solely to conversations
and events relevant to the formation and execution of the buying
programs. Page 310 U. S. 235 In addition, it clearly appears that the use of this material
was not prejudicial. So far as the subject matter of the inquiry is
concerned, that prior testimony was either cumulative or dealt only
with the minutiae of the conspiracy. The record minus that
testimony clearly establishes all the facts necessary for proof of
the illegal conspiracy. No portion of it was dependent on the minor
facts concerning which the memory of these witnesses was refreshed.
[ Footnote 61 ] Hence, the
situation is vastly different from those cases where essential
ingredients of the crime were dependent on testimony elicited in
that manner or where the evidence of guilt hung in delicate balance
if that testimony was deleted. See Little v. United
States, 93 F.2d 401; Putnam v. United States, 162 U. S. 687 .
Hence, assuming arguendo that there was error in the use
of the prior testimony, to order a new trial would be to violate
the standards of § 269 of the Judicial Code, since the "substantial
rights" of respondents were not affected. There are no vested
individual rights in the ordinary rules of evidence; their
observance should not be reduced to an idle ceremony. Page 310 U. S. 236 Putnam v. United States, supra, held it was prejudicial
error to use grand jury minutes to refresh the memory of a witness
unless that testimony was contemporaneous with the occurrences as
to which the witness was testifying. There, the testimony before
the grand jury was more than four months after the occurrence. This
Court held that, because of that lapse of time, the testimony was
not contemporaneous. Whatever may be said of the Putnam case on the merits ( see Wigmore, supra, § 761) it
does not establish an inflexible four-months' period of limitation.
There, the event was a single isolated conversation, most damaging
to the defendant. Here, there was a continuing conspiracy extending
at least up to the period when the witnesses were testifying before
the grand jury. Much of the testimony related to events a year or
more old. But, in the main, those matters were woven into the
conspiracy, related to events in which the witness actively
participated, concerned the regular business matters with which he
was familiar, pertained to his regular employment, or constituted
admissions against interest. On these facts, we do not think there
was an abuse of discretion on the part of the trial judge in
permitting the testimony to be used. Measured by the test of
whether or not the prior statement made under oath was reasonably
calculated to revive the witness' present recollection within the
rule of the Putnam case, there certainly cannot be said to
have been error as a matter of law.

															Respondents say that the manner employed in refreshing the
recollection of the witnesses was bound to inculcate in the minds
of the jurors the feeling that the witnesses were testifying
falsely or were concealing the truth. But, here again, we find no
reversible error. The trial judge, as we have said, was alert to
stop impeachment. And, in view of the obvious hostility and
evasiveness of most of those witnesses, we cannot say that the
judge transcended the bounds of discretion in permitting Page 310 U. S. 237 their memories to be refreshed in this manner. " As is true of
most that takes place in a trial, the right result is a matter of
degree, and depends upon the sense of measure of the judge." See United States v. Freundlich, 95 F.2d 376, 379. VII . Arguments to the Jury by Government Counsel Respondents complain of certain statements made to the jury by
government counsel. Their objections are that government counsel
(1) appealed to class prejudice, and (2) requested a conviction
regardless of the evidence because the prosecution was convinced of
respondents' guilt and because a conviction "was the wish and the
desire of the highest officials in the Government of the United
States."

															Under the first of these, they point to the opening statement
that this conspiracy involved some of the "biggest men" in the
country -- big in the sense of "controlling vast volumes of
financial influence;" and that it is a "terrible thing that a group
of influential, wealthy millionaires or billionaires should take
over the power, take over the control, the power to make prices."
At the close of those opening remarks and on objection of defense
counsel, the court counseled the jury that

															"any reference to the wealth of any of the defendants is
entirely immaterial. A man of wealth has just as much standing in a
court as a man that is poverty stricken."

															But respondents complain that, in the closing arguments, the
same matter was referred to again as follows:

															"A hundred lawyers employed -- the very cream of the American
Bar, the very best legal talent that these people can obtain --
every one of them working night and day with suggestions as to how
the red herring can be drawn across the clear cut issue in this
case;"

															that it should not be taken for granted "that these more
powerful people are above the law, and can't be reached and Page 310 U. S. 238 can't be brought to book;" that the "fear of corporate power in
combination" is part of the American tradition, as illustrated by a
speech made in 1873 by a Wisconsin judge, who said:

															"There is looming up a new and dark power. . . . The
accumulation of individual wealth seems to be greater than it ever
has been since the downfall of the Roman Empire. The enterprises of
the country are . . . coldly marching not for economic conquests
only, but for political power . . . ; money is taking the field as
an organized power. The question will arise . . . which shall rule,
wealth or man? Which shall lead, money or intellect? Who shall fill
the public stations, educated and patriotic free men, or the futile
serfs of corporate capital?"

															But, as to these statements, no objection was made at the time
by defense counsel.

															There were other such references -- e.g., "malefactors
of great wealth," "eager, grasping men" or corporations who

															"take the law into their own hands . . . without any
consideration for the underdog or the poor man . . . We are going
to stop it, as our forefathers stopped it before us and left this
country with us as it is now, or we are going down into ruin, as
did the Roman Empire."

															Counsel for the defense objected to these statements as improper
and prejudicial. The court overruled the objections, stating it
would deal with the matter in its charge to the jury. In its
charge, the court warned against convicting a corporation "solely
because of its size or the extent of its business;" that it was
"your duty to give these corporations the same impartial
consideration" as an individual or small corporation would receive,
and instructed the jurors not to be concerned "with the financial
condition of any of these defendants. Whether a man be rich or
poor, he is entitled to the same consideration in this Court."

															On this phase of the matter, several observations are pertinent.
In the first place, counsel for the defense Page 310 U. S. 239 cannot, as a rule, remain silent, interpose no objections, and,
after a verdict has been returned, seize for the first time on the
point that the comments to the jury were improper and prejudicial. See Crumpton v. United States, 138 U.
S. 361 , 138 U. S. 364 .
Of course, appellate courts,

															"in the public interest, may, of their own motion, notice errors
to which no exception has been taken, if the errors are obvious, or
if they otherwise seriously affect the fairness, integrity, or
public reputation of judicial proceedings." See United States v. Atkinson, 297 U.
S. 157 , 297 U. S. 160 .
But, as we point out hereafter, the exceptional circumstances which
call for an invocation of that rule are not present here. In the
second place, it is not improper in a Sherman Act case to discuss
corporate power, its use and abuse, so long as those statements are
relevant to the issues at hand. For that subject is material to the
philosophy of that Act. Its purposes and objectives are clearly
legitimate subjects for discussion before the jury. But, thirdly,
appeals to class prejudice are highly improper, and cannot be
condoned, and trial courts should ever be alert to prevent them.
Some of the statements to which respondents now object fall in this
class. They were, we think, undignified and intemperate. They do
not comport with the standards of propriety to be expected of the
prosecutor. But it is quite another thing to say that these
statements constituted prejudicial error. In the first place, it is
hard for us to imagine that the minds of the jurors would be so
influenced by such incidental statements during this long trial
that they would not appraise the evidence objectively and
dispassionately. In the second place, this was not a weak case as
was Berger v. United States, 295 U. S.
78 , where this Court held that prejudice to the accused
was so highly probable as a result of the prosecutor's improper
conduct "that we are not justified in assuming its nonexistence."
(P. 295 U. S. 89 ) Cf. 279 U. S. v.
Johnson, 279 Page 310 U. S. 240 U.S. 310. Of course, appeals to passion and prejudice may so
poison the minds of jurors even in a strong case that an accused
may be deprived of a fair trial. But each case necessarily turns on
its own facts. And where, as here, the record convinces us that
these statements were minor aberrations in a prolonged trial, and
not cumulative evidence of a proceeding dominated by passion and
prejudice, reversal would not promote the ends of justice.

															Under the second of these objections, respondents complain of
the plea to the jury not to "let your Government and the United
States and its citizens and society down," and that government
counsel "believe to the bottom of their hearts in the justice of
the cause that they espouse here." No objection at that time was
made by defense counsel. But they did object at the trial to the
statements by government counsel,

															". . . do you honestly think that these boys here [government
counsel] . . . would be trying to convict these men unless that was
the wish and the desire of the highest officials in the government
of the United States? . . . You don't think the government of the
United States would allow four or five lawyers to come out here and
prosecute this case against them against their wishes, or that the
Secretary of the Department of the Interior would allow us to do it
if he didn't want it done?"

															The court overruled the objections, stating, "I suppose we have
a right to assume that they are here under the instructions of the
Attorney General of the United States." Respondents further
complain of the statements that the evidence is "so overwhelming
and overpowering that it doesn't even leave the trace or the shadow
of a doubt;" that, if "you are going to say they are not guilty on
this evidence, then you take the responsibility, I won't; you get
an alibi, I won't;" that the hundreds of thousands of dollars spent
by the government "in trying to get before you the facts" should
not be Page 310 U. S. 241 "thrown to the winds," nor should these men "go clear." But no
objection was made at the time by defense counsel.

															As respects the statement that it was the "wish and the desire
of the highest officials" in the government to have defendants
convicted, some background should be given. This came near the end
of the closing arguments. In the opening statement, during the
trial, and in the closing arguments, the defense continuously
emphasized the knowledge and acquiescence by government officials
of the buying programs. As we have noted, that was one of the main
lines of defense. From the beginning of the trial to the end, the
defense sought to prove not official approval in the legal sense,
but official acquiescence or at least condonation. Bald statements
were made that respondents "were conducting a program which
resulted from the instigation and inducement of the Government
itself;" after the Schechter case, they endeavored to
"stabilize marketing practices" at the "instance of officials of
the Oil Administration;"

															"what was done by these defendants was done for the purpose of
accomplishing the objective and purposes of the National Industrial
Recovery Act, and was undertaken at the request and pursuant to the
authorization of the Secretary of the Interior, Mr. Ickes, the
Administrator of the Petroleum Code;"

															respondents

															"acted to carry out the purposes and objectives sought by the
Government and initiated by the Government. . . . They were
objectives defined by the President of the United States. They were
purposes the accomplishment of which the Secretary of the Interior
had been charged, under his oath, to seek to obtain; . . . with all
this backing and all this help from the government, and all this
urging from the government, are you going to brand these men as
just selfish individuals?"

															On innumerable instances, the impression was sought to be
conveyed by subtle intimation, inference, or suggestion Page 310 U. S. 242 that responsibility for these buying programs should be placed
on the shoulders of high government officials. Government counsel
accordingly justified his statement on the grounds that it denied
what the defense had continuously stated -- viz., that the
buying programs were conducted with the consent and approval of the
Secretary of the Interior. At a subsequent point in the closing
arguments, government counsel again referred to the matter. On
objection of defense counsel, he withdrew the statement. And the
court instructed the jury to disregard it, saying "This prosecution
was commenced at the instigation of the Attorney General of the
United States."

															In view of these various circumstances, we do not think that the
above statements were prejudicial. Standing by themselves, they
appear to be highly improper. Even as a rebuttal to the defense
which had been interposed throughout the trial, they overstep the
bounds. But, in view of the justification which respondents sought
to establish for their acts, the subject matter of these statements
was certainly relevant. The fact that government counsel
transgressed in his rebuttal certainly cannot be said to constitute
prejudicial error. For a reading of the entire argument before the
jury leads to the firm conviction that the comments which
respondents now rely on for their assertions of error were
isolated, casual episodes in a long summation of over 200 printed
pages, and not at all reflective of the quality of the argument as
a whole.

															Respondents further urge as prejudicial error the assertions by
government counsel of personal knowledge in contradiction of the
record for the purpose of discrediting an important defense
witness. The statement of government counsel was that, in "1935 and
1936, you couldn't get a rowboat up the Mississippi River north of
Winona." Respondents contend that testimony as to navigability of
that river was vitally material as establishing such outside
competition as would have prevented them from Page 310 U. S. 243 raising prices to artificial and noncompetitive levels. But such
testimony was wholly irrelevant, since the reasonableness of the
prices was not properly an issue in the case. Furthermore, when
objection was made to the remark, counsel withdrew it and the jury
was instructed to disregard it. That must be deemed to have cured
the error, if it could be considered such. As stated in Dunlop
v. United States, 165 U. S. 486 , 165 U. S. 498 ,
"If every remark made by counsel outside of the testimony were
ground for a reversal, comparatively few verdicts would stand." VIII . Granting of New Trials to Some Defendants Respondents contend that the trial court committed reversible
error in granting new trials to some defendants and denying them to
respondents.

															The court charged the jury that it could convict any of the
defendants found to have been members of the combination, and that
it need not convict all or none. As has been noted, the jury found
sixteen corporations and thirty individuals guilty. Thereafter, the
court discharged one corporation and ten individuals, and granted
new trials to three corporations and fifteen individuals. Such
action left the verdict standing as to only twelve corporations and
five individuals. The trial court gave as its reason for granting
some of the defendants a new trial its belief that they had not
had

															"an adequate separate consideration of their defense in view of
the fact that, as to some of them, direct evidence of participation
was lacking or slight, and the circumstantial evidence, viewed as a
whole, may well have obscured other facts and circumstances shown,
in some cases, to be highly suggestive of innocence, and in all
cases entitled to be considered and weighed." United States v. Standard Oil Company
(Indiana), 23 F. Supp.
937 , 939. In denying the motions of respondents for a new
trial, it stated (p. 944) that there was "evidence to go to the
jury and to sustain Page 310 U. S. 244 its verdict as to every essential charge in the indictment" as
to them. [ Footnote 62 ]

															Respondents' argument runs as follows: the court charged the
jury that it was the purpose and the power of the combination to
raise prices which were material. Hence, the fact that the jury
found that the entire group possessed such power does not
necessarily mean that the jury would have found that respondents
action alone possessed such power. Since the jury did not consider
that issue, it is argued that denial of a new trial to respondents
violates their constitutional right to a jury trial. And, Page 310 U. S. 245 in support of their contention, respondents insist that Standard
of Indiana alone (one of the defendants granted a new trial)
possessed such power as would make it impossible for them to raise
prices without its agreement and cooperation.

															Respondents' argument does not focus sharply the basic and
essential elements of the offense and of the instructions to the
jury. As we have stated above, the offense charged in this
indictment was proved once it was established that any of the
defendants conspired to fix prices through the buying programs, and
that those programs caused or contributed to the price rise. Power
of the combination to fix prices was therefore but a conclusion
from the fact that the combination did fix prices. Hence, in that
posture of the case, the issue here is whether or not the finding
of the jury that the buying programs affected prices was
necessarily dependent on the participation in those programs of all
who were convicted.

															Obviously it was not. The order granting new trials in no manner
impeached or questioned the evidence as to the total spot market
purchases made by all companies (whether defendants,
coconspirators, or others). Cf. Bartkus v. United States, 21 F.2d 425. In their efforts to place a floor under the spot
markets, respondents assuredly received benefits and assistance
from the purchases made by other companies. And the amount of
benefit and assistance received did not necessarily depend on
whether or not those other companies were coconspirators. Market
manipulators commonly obtain assistance from the activities of the
innocent, as well as from those of their allies. The fact that they
may capitalize on the purchases of others is no more significant
than the fact that they may gain direct or collateral benefits from
market trends, bullish factors, or fortuitous circumstances. And
the mere fact that those circumstances Page 310 U. S. 246 might have changed, and that Standard of Indiana, say, might
have substantially impaired the effect of the buying programs on
prices by a change in its retail policies, was as irrelevant as was
the chance that the Connally Act might have been repealed. The
effect of the concerted activities was not rebutted by the fact
that changes in events might have destroyed that effect.

															Nor did the case against respondents automatically fall when
three of the corporate defendants [ Footnote 63 ] were awarded a new trial. We have here a
situation quite different from that where the participation of
those to whom a new trial was granted or against whom the judgment
of conviction was reversed was necessary for the existence of the
crime charged. See Gebardi v. United States, 287 U.
S. 112 ; Morrison v. California, 291 U. S.
82 ; King v. Plummer [1902], 2 K.B. 339. In this
case, the crime was not indivisible ( cf. Queen v.
Gompertz, 9 A. & E., (N.S.), 824; Feder v. United
States, 257 F. 694) in the sense that the existence of a
conspiracy under the Sherman Act was necessarily dependent on the
cooperation of the other defendants with respondents. Nor was the
case submitted to the jury on the assumption that the participation
of any of the corporations which were granted new trials was
indispensable to the finding of a conspiracy among the rest. As we
have seen, the court charged that the jury could convict any of the
defendants found to have been members of the combination, and that
it need not convict all or none. It was the existence of a
combination and the participation in it of all or some of the
defendants which were important, not the identity of each Page 310 U. S. 247 and every participant. A conspiracy under the Sherman Act may
embrace two or more individuals or corporations. Conviction of some
need not await the apprehension and conviction of all. The
erroneous conviction of one does not necessarily rebut the finding
that the others participated. The theory of the charge to the jury
was not that the defendants must be convicted, if at all, as a
body; rather, the issue of guilt was distributive; the identity of
all the coconspirators was irrelevant.

															In a Sherman Act case, as in other conspiracy cases, the grant
of a new trial to some defendants and its denial to others is not per se reversible error. After the jury's verdict has been
set aside as respects some of the alleged coconspirators, the
remaining ones cannot seize on that action as grounds for the
granting of a new trial to them unless they can establish that such
action was so clearly prejudicial to them that the denial of their
motions constituted a plain abuse of discretion. See Dufour v.
United States, 37 App.D.C. 497, 510, 511; State v.
Christianson, 131 Minn. 276, 280, 154 N.W. 1095; Commonwealth v. Bruno, 324 Pa. 236, 248, 188 A. 320; People v. Kuland, 266 N.Y. 1, 193 N.E. 439; Browne v.
United States, 145 F. 1. There is a complete lack of any
showing of abuse of discretion here, for no prejudice has been
established.

															Hence, this case falls within the well established rule that
neither this Court nor the Circuit Court of Appeals will review the
action of a federal trial court in granting or denying a motion for
a new trial for error of fact, since such action is a matter within
the discretion of the trial court. Fairmount Glass Works v. Cub
Fork Coal Co., 287 U. S. 474 .
Certain exceptions have been noted, such as instances where the
trial court has "erroneously excluded from consideration matters
which were appropriate to a decision on the motion." Fairmount
Glass Works v. Cub Fork Coal Co., supra, p. 287 U. S. 483 .
But there Page 310 U. S. 248 are no such circumstances here. No iota of evidence has been
adduced that the trial court, in denying respondents' motions,
failed to take into consideration the effect of the buying programs
on gasoline prices in the Mid-Western area. In fact, it seems
apparent that the trial court considered that issue, and ruled
thereon adversely to respondents. It concluded in substance that
whoever may have been all the members of the conspiracy, there was
ample evidence to go to the jury on the nature and effect of these
programs.

															Certainly denial of a motion for a new trial on the grounds that
the verdict was against the weight of the evidence would not be
subject to review. Moore v. United States, 150 U. S.
57 , 150 U. S. 61 -62; J. W. Bishop Co. v. Shelhorse, 141 F. 643, 648; O'Donnell v. New York Transp. Co., 187 F. 109, 110. In
substance, no more than that is involved here. IX . Variance By their cross-petition, respondents contend that there was a
fatal variance between the agreement charged in the indictment and
the agreement proved, with a consequent violation of respondents'
rights under the Sixth Amendment.

															As we have noted, certain trade journals were made defendants.
The indictment charged that they were "the chief agencies and
instrumentalities" through which the illegally raised prices
affected prices paid for gasoline in the Mid-Western area; that
they "knowingly published and circulated as such price quotations
the wrongfully and artificially raised and fixed prices for
gasoline paid by" defendants in the buying programs while
"representing the price quotations published by them" to be
gasoline prices "prevailing in spot sales to jobbers in tank car
lots" and while "knowing and intending them to be relied on as such
by jobbers and to be made the basis of prices to jobbers." Page 310 U. S. 249 At the close of the government's case, the indictment was
dismissed, on motion of the government, as against all trade
journal defendants who went to trial. This was clearly proper, as
the evidence adduced exculpated them from any wrongdoing. But
respondents contend that the device charged in the indictment was
one by which respondents were to pay higher than the actual spot
market prices for their purchases, and then to substitute in the
trade journal quotations such prices for the lower prices actually
paid by jobbers in spot market sales. Since there was failure of
proof on this point of falsification, it is argued that there was a
variance. For, according to respondents, that feature was an
integral and essential part of the plan as charged.

															We agree with the Circuit Court of Appeals that there was no
variance. Analysis of the indictment which we have set forth, supra, pp. 310 U. S.
166 -170, makes it clear that the charge against
respondents was separate from and independent of the charge against
the trade journals, and that the allegations against those journals
constituted not the only means by which the conspiracy was to be
effectuated, but only one of several means ( supra, 310 U. S.
167 -168). In effect, those charges in the indictment
sought to connect the trade journals with the conspiracy as aiders
and abettors. On the other hand, the gist of the indictment charged
a conspiracy by defendants (1) to raise and fix the spot market
prices and (2) thereby to raise and fix the prices in the
Mid-Western area. So far as means and methods of accomplishing
those objectives were concerned, the charge of falsification of the
trade journal quotations was as unessential as was the charge,
likewise unproved, that defendants caused the independent refiners
to curtail their production. The purpose and effect of the buying
programs in raising and fixing prices were in no way made dependent
on the utilization of fraudulent trade journal quotations. As
charged, the trade journals Page 310 U. S. 250 were the chief instrumentalities by which the spot market prices
were converted into prices in the Mid-Western area. Hence, under
this indictment, they were wholly effective for respondents'
purposes, though they were innocent and though their quotations
were not falsified as charged. A variation between the means
charged and the means utilized is not fatal. And where an
indictment charges various means by which the conspiracy is
effectuated, not all of them need be proved. See Nash v. United
States, 229 U. S. 373 , 229 U. S. 380 . Cf. Boyle v. United States, 259 F. 803, 805. X . Jurisdiction or Venue The Sixth Amendment provides that the accused shall be tried "by
an impartial jury of the State and district wherein the crime shall
have been committed." Respondents contend that the district court
for the Western District of Wisconsin had no jurisdiction or venue
to try them, since the crime was not committed in that district.
The Circuit Court of Appeals held to the contrary, one judge
dissenting.

															As we have noted, the indictment charged that the defendants (1)
conspired together to raise and fix the prices on the spot markets;
(2) raised, fixed, and maintained those prices at artificially high
and noncompetitive levels, and

															"thereby intentionally increased and fixed the tank car prices
of gasoline contracted to be sold and sold in interstate commerce
as aforesaid in the Mid-Western area (including the Western
District of Wisconsin);"

															(3) have "exacted large sums of money from thousands of jobbers"
in the Mid-Western area by reason of the provisions of the
prevailing form of jobber contracts which made the price to the
jobber dependent on the average spot market price, and (4) "in
turn, have intentionally raised the general level of retail prices
prevailing in said Mid-Western area." Page 310 U. S. 251 As we have seen, there was substantial competent evidence that
the buying programs resulted in an increase of spot market prices,
of prices to jobbers, and of retail prices in the Mid-Western area.
And it is clear that certain corporate respondents sold gasoline
during this period in the Mid-Western area at the increased prices.
The court charged the jury that, even though they found that
defendants had the purpose and power to raise the spot market
prices, they must acquit the defendants unless they also found and
believed beyond a reasonable doubt that defendants

															"have also intentionally raised and fixed the tank car price of
gasoline contracted to be sold and which was sold in interstate
commerce in the Mid-Western area, including the Western District of
Wisconsin."

															It also charged that it was not enough

															"for the prosecution to show an increase in the tank car prices
of gasoline within said area, but you must also find and believe
beyond a reasonable doubt and to a moral certainty that the
defendants combined and conspired together or with others for the
purpose of increasing and fixing the same as well as for the
purpose of raising and fixing the tank car prices in said spot
markets, or one or more of them."

															It further charged that the jury in order to convict must find
some overt acts in the Western District of Wisconsin, and that
sales of gasoline therein by any of the defendants would constitute
such overt acts.

															Respondents, though agreeing that there were such sales in the
Mid-Western area and that the prices on such sales were affected by
the rise in the spot markets, deny that they were overt acts in
pursuance of the conspiracy. Rather, they contend that each of such
sales was an individual act of a particular conspirator in the
ordinary course of his business by which he enjoyed the results of
a conspiracy carried out in another district. That is to say, they
take the position that the alleged conspiracy was limited to a
restraint of competition in buying and Page 310 U. S. 252 selling on the spot markets, and included no joint agreement or
understanding as respects sales in the Mid-Western area. In support
of this view, they cite the government's concessions that it

															"does not claim that each defendant 'entered into an agreement
not to sell jobbers except in accordance with' the contract
described in Paragraph 11 of the Indictment, [ Footnote 64 ]"

															and that it does not contend that defendants were "sitting
around a table and agreeing on a uniform retail price." And they
assert that there was no evidence that respondents agreed not to
sell gasoline in the Western District of Wisconsin except on the
basis of spot market prices.

															Conspiracies under the Sherman Act are on "the common law
footing": they are not dependent on the "doing of any act other
than the act of conspiring" as a condition of liability. Nash
v. United States, supra, at p. 229 U. S. 378 .
But, since there was no evidence that the conspiracy was formed
within the Western District of Wisconsin, the trial court was
without jurisdiction unless some act pursuant to the conspiracy
took place there. United States v. Trenton Potteries Co.,
supra, pp. 273 U. S.
402 -403, and cases cited. We agree with the Circuit
Court of Appeals that Page 310 U. S. 253 there was ample evidence of such overt acts in that district.
The finding of the jury on this aspect of the case was also
supported by substantial evidence. As we indicated in our
discussion of the buying programs, there was sufficient evidence to
go to the jury that the conspiracy did not end with an agreement to
make purchases on the spot markets; that those buying programs were
but part of the wider stabilization efforts of respondents; that
the chief end and objective were the raising and maintenance of
Mid-Western prices at higher levels. As stated by the Circuit Court
of Appeals, a different conclusion would require a belief that
respondents were "engaged in a philanthropic endeavor." They
obviously were not. The fact that no uniform jobbers' contract and
no uniform retail price policy were agreed upon is immaterial. The
objectives of the conspiracy would fail if respondents did not, by
some formula or method, relate their sales in the Mid-Western area
to the spot market prices. The objectives of the conspiracy would
also fail if respondents, contrary to the philosophy of all the
stabilization efforts, indulged in price-cutting and price wars.
Accordingly, successful consummation of the conspiracy necessarily
involved an understanding or agreement, however informal, to
maintain such improvements in Mid-Western prices as would result
from the purchases of distress gasoline. The fact that that
entailed nothing more than adherence to prior practice of relating
those prices to the spot market is, of course, immaterial. In sum,
the conspiracy contemplated and embraced, at least by clear
implication, sales to jobbers and consumers in the Mid-Western area
at the enhanced prices. The making of those sales supplied part of
the "continuous cooperation" necessary to keep the conspiracy
alive. See United States v. Kissel, 218 U.
S. 601 , 218 U. S. 607 .
Hence, sales by any one of the respondents in the Mid-Western area
bound all. For a conspiracy is a partnership in crime, and an
"overt act Page 310 U. S. 254 of one partner may be the act of all without any new agreement
specifically directed to that act." United States v. Kissel,
supra, p. 218 U. S.
608 . XI . Respondent McElroy Respondent McElroy argues that the judgment of conviction
rendered against him should be reversed, and the indictment
dismissed, not only for the reasons heretofore discussed, but more
specifically on the grounds that there was no substantial evidence
that he had any knowledge of and participated in the unlawful
conspiracy. His motion for a directed verdict at the conclusion of
the case was denied by the trial court, and the Circuit Court of
Appeals held that there was no error in such denial. A question of
law is thus raised which entails an examination of the record not
for the purpose of weighing the evidence, but only to ascertain
whether there was some competent and substantial evidence before
the jury fairly tending to sustain the verdict. Abrams v.
United States, 250 U. S. 616 , 250 U. S. 619 ; Troxell v. Delaware, L. & W. R. Co., 227 U.
S. 434 , 227 U. S. 444 ; Lancaster v. Collins, 115 U. S. 222 , 115 U. S. 225 .
We have carefully reviewed the record for evidence of McElroy's
knowledge of and participation in the conspiracy. But, without
burdening the opinion with a detailed exposition of the evidence on
this point, we are of opinion that there was no error in the denial
of his motion.

															The judgment of the Circuit Court of Appeals is reversed, and
that of the District Court affirmed. Reversed. THE CHIEF JUSTICE and MR. JUSTICE MURPHY did not participate in
the consideration or decision of this case.

															* Together with No. 347, Socony-Vacum Oil Co., Inc. et al.
v. United States, also on writ of certiorari (308 U.S. 540) to
the Circuit Court of Appeals for the Seventh Circuit.

															[ Footnote 1 ]

															The indictment charged 27 corporations and 56 individuals with
violations of § 1 of the Sherman Law. There were brought to trial
26 corporations and 46 individuals. Prior to submission of the case
to the jury, the court discharged, directed verdicts of acquittal,
or dismissed the indictment as to 10 of the corporations and 16 of
the individuals. The jury returned verdicts of guilty as to the
remaining 16 corporations and 30 individuals. Thereafter, the trial
court ordered new trials as to 3 corporations and 15 individuals
and granted judgment non obstante veredicto to one other
corporation and 10 other individuals. United States v.
Stone, 308 U.S. 519. For the opinions of the District Court on
that phase of the case, see United States v. Standard Oil
Co., 23 F. Supp.
937 , 938, 939, 24 F. Supp. 575, and for the opinion of the
Circuit Court of Appeals, Ex parte United States, 101 F.2d
870.

															The respondents are the remaining 12 corporations and 5
individuals, viz., Socony-Vacuum Oil Company, Inc.,
Wadhams Oil Company, Empire Oil and Refining Company, Continental
Oil Company, The Pure Oil Company, Shell Petroleum Corporation,
Sinclair Refining Company, Mid-Continent Petroleum Corporation,
Phillips Petroleum Company, Skelly Oil Company, The Globe Oil &
Refining Company (Oklahoma), The Globe Oil & Refining Company
(Illinois), C. E. Arnott, vice-president of Socony-Vacuum, H. T.
Ashton, manager of Lubrite Division of Socony-Vacuum, R. H.
McElroy, Jr., tank-car sales manager of Pure Oil, P. E. Lakin,
general manager of sales of Shell, R. W. McDowell, vice-president
in charge of sales of Mid-Continent.

															[ Footnote 2 ]

															Each of the corporations was fined $5,000; each individual,
$1,000.

															[ Footnote 3 ]

															Sec. 1 provides:

															"Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the several
States, or with foreign nations, is hereby declared to be illegal:
. . . Every person who shall make any contract or engage in any
combination or conspiracy hereby declared to be illegal shall be
deemed guilty of a misdemeanor, and, on conviction thereof, shall
be punished by fine not exceeding $5,000, or by imprisonment not
exceeding one year, or by both said punishments, in the discretion
of the court."

															[ Footnote 4 ]

															The major oil companies, in the main, engage in every branch of
the business -- owning and operating oil wells, pipelines,
refineries, bulk storage plants, and service stations. Those
engaging in all such branches are major integrated oil companies;
those lacking facilities for one or more of those branches are
semi-integrated. "Independent refiners" describes companies engaged
exclusively in refining.

															[ Footnote 5 ]

															Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
North Dakota, South Dakota, and Wisconsin.

															[ Footnote 6 ]

															Located in the north, eastern part of Texas.

															[ Footnote 7 ]

															Described as including Oklahoma, the northern and western
portions of Texas, the southern and eastern portions of Kansas, the
southern portion of Arkansas, the northern portion of
Louisiana.

															[ Footnote 8 ]

															Two individuals connected with those journals were also made
defendants. One of the individuals was not brought to trial. At the
close of the government's case, the indictment was dismissed, on
motion of the government, as against the other four trade journal
defendants.

															[ Footnote 9 ]

															Described by one witness as

															"wells that have gotten down to less than 5 barrels a day, and
in some cases down to less than a barrel a day, so that they only
have to be pumped, sometimes, an hour or two a day to get all the
oil they will produce at that stage of the game."

															[ Footnote 10 ]

															It provided for maximum hours of work and minimum rates of pay;
forbade sales below cost; required integrated companies to conduct
each branch of their business on a profitable basis; established,
within certain limits, the parity between the price of a barrel of
crude oil and a gallon of refined gasoline as 18.5 to 1, and
authorized the fixing of certain minimum prices.

															[ Footnote 11 ]

															An order of the Administrator fixing minimum prices never became
effective. Respondents also made an offer of proof that the
Petroleum Administrative Board endeavored, in the fall of 1933, to
obtain voluntary action by the larger companies to acquire and hold
large stocks of crude oil, said to be overhanging the market and in
danger of depressing the price of refined gasoline. The offer of
proof indicated that some purchases had been made, but did not show
the extent. Respondents offered to show, through testimony of the
chairman of the Planning & Coordination Committee, that it was
the desire of the Administrator that crude oil not fall below $1 a
barrel.

															[ Footnote 12 ]

															The testimony of one of respondents' witnesses was that this
policy caused the major companies to buy gasoline -- in the main
from small, nonintegrated refiners.

															[ Footnote 13 ]

															June 23, 1934; August 13, 1934; September 8, 1934; November 2,
1934. They apparently were short-lived, their legality having been
questioned by the Department of Justice. Late in 1933, the industry
proposed the formation of a National Petroleum Agency, of which
twenty-three of the larger companies, including most of the
corporate respondents, were to be members, "to purchase, hold and,
in an orderly way, dispose of surplus gasoline which threatens the
stability of the oil price structure." Subscriptions for a pool of
nearly $9,000,000 were obtained. The plan was never put into
operation. In May, 1934, there was another voluntary plan (which
was abortive), the Planning & Coordination Committee addressed
a resolution to certain major companies calling upon each to
purchase an amount of gasoline in May equal to 3% of their
sales.

															[ Footnote 14 ]

															Under the November 2, 1934 program, the contract provided that
the price to be paid for the gasoline purchased should increase
1/4� per gallon with each 5� per barrel increase in the posted
price of crude oil and should decrease 1/4� per gallon with each 5�
per barrel decrease in crude.

															[ Footnote 15 ]

															P. 37. Excerpts from this report were part of an offer of proof
by respondents.

															[ Footnote 16 ]

															The Marketing Committee had an extensive organization of
regional, state, local, or temporary committees, scattered
throughout the country and representative of the various marketing
elements in the industry.

															[ Footnote 17 ]

															He also testified that the Board said that it could not tell him
how to deal with the price wars, but that it would authorize him to
deal with "the elements [of] that conflict that cause them."

															[ Footnote 18 ]

															Sec. 3(a) of the Act read:

															"Upon the application to the President by one or more trade or
industrial associations or groups, the President may approve a code
or codes of fair competition for the trade or industry or
subdivision thereof, represented by the applicant or applicants, if
the President finds (1) that such associations or groups impose no
inequitable restrictions on admission to membership therein and are
truly representative of such trades or industries or subdivisions
thereof, and (2) that such code or codes are not designed to
promote monopolies or to eliminate or oppress small enterprises and
will not operate to discriminate against them, and will tend to
effectuate the policy of this title: Provided, That such
code or codes shall not permit monopolies or monopolistic
practices: Provided further, That where such code or codes
affect the services and welfare of persons engaged in other steps
of the economic process, nothing in this section shall deprive such
persons of the right to be heard prior to approval by the President
of such code or codes. The President may, as a condition of his
approval of any such code, impose such conditions (including
requirements for the making of reports and the keeping of accounts)
for the protection of consumers, competitors, employees, and
others, and in furtherance of the public interest, and may provide
such exceptions to and exemptions from the provisions of such code,
as the President in his discretion deems necessary to effectuate
the policy herein declared."

															Section 5 provided:

															"While this title is in effect (or in the case of a license,
while section 4(a) is in effect) and for sixty days thereafter, any
code, agreement, or license approved, prescribed, or issued and in
effect under this title, and any action complying with the
provisions thereof taken during such period, shall be exempt from
the provisions of the antitrust laws of the United States."

															[ Footnote 19 ]

															This committee eventually was composed of respondents McDowell,
Ashton, and Lakin, and five former defendants who were either
discharged or granted new trials.

															[ Footnote 20 ]

															Respondent R. W. McDowell, a vice-president of Mid-Continent,
testified as follows respecting the origin and meaning of this
term:

															"The phrase 'dancing partners' came up right there after Mr.
Ashton had gone around the room. There were these 7 or 8 small
refiners whom no one had mentioned. He said this situation reminded
him of the dances that he used to go to when he was a young fellow.
He said, 'Here we are at a great economic ball.' He said, 'We have
these major companies who have to buy gasoline and are buying
gasoline, and they are the strong dancers.' And he said, 'They have
asked certain people to dance with them. They are the better known
independent refiners.' He said, 'Here are 7 or 8 that no one seems
to know.' He said, 'They remind me of the wallflowers that always
used to be present at those old country dances.' He said, 'I think
it is going to be one of the jobs of this Committee to introduce
some of these wallflowers to some of the strong dancers, so that
everybody can dance.' And from that simile, or whatever you want to
call it, the term 'dancing partner' arose."

															[ Footnote 21 ]

															This was a committee of three of which respondent McDowell was
chairman.

															[ Footnote 22 ]

															The list of the independent refiners having the distress
gasoline was read, and the majors made their selections -- some on
the basis of prior business dealings, some on the basis of personal
friendships, some because of location, freight advantages, etc.

															[ Footnote 23 ]

															Practically all of the independent refiners named in the
indictment were members of this Association. C. M. Boggs, the
president of the Association, and A. V. Bourque, its secretary,
were named in the indictment as defendants. As to the former, a
motion for directed verdict of acquittal was granted; as to the
latter, the verdict of the jury was set aside and the indictment
dismissed.

															[ Footnote 24 ]

															On March 15, 1935, Jacobi, in a letter to his superiors,
wrote:

															"The writer has been busy this week on tank car stabilization
work, and thus far results are gratifying. Our Committee decided on
a price of 3 2/4� for third grade, and 4 2/4� for 'Q' for next
week. Purchasing companies, including our own units, are paying
these prices today."

															"Q" gasoline is regular gasoline with an octane rating of
68-70.

															[ Footnote 25 ]

															What the practice of the other member of the Mechanical
Sub-Committee was in this respect does not appear.

															[ Footnote 26 ]

															Arnott was reported as saying:

															"East Texas has been a menace to not only the Eastern Seaboard,
but its gasoline also has found its way up into the Mid-Continent
and has been competitive with the so-called Mid-Continent
suppliers' or refiners' gasoline."

															The normal market for gasoline refined in East Texas was the
Texas and the Atlantic seaboard, reached through tanker shipments
from Gulf ports.

															[ Footnote 27 ]

															Buckley first secured the approval of his employer. His company,
not the Association, paid his salary while he was engaged in this
work; the Association paid his travel and telephone expenses.

															[ Footnote 28 ]

															Representatives of respondents Socony-Vacuum, Pure Oil,
Sinclair, and probably of Shell were present. as well as
representatives of other majors. The only individual respondents
present were Arnott and McElroy.

															[ Footnote 29 ]

															They were part of the organization of the Planning &
Coordination Committee under the Code. As to allocations under the
Code, see infra, pp. 310 U. S. 201 et seq. [ Footnote 30 ]

															Not including, inter alia, Cities Service Export Oil
Co., Louisiana Oil Refining Corp., Tide Water Assoc. Oil Co., The
Texas Co., and Gulf Refining Co., as respects which the indictment
had been dismissed.

															[ Footnote 31 ]

															Only three of the corporate respondents purchased through the
Association.

															[ Footnote 32 ]

															An inter-company communication between employees of respondent
Pure Oil written in May, 1935, stated:

															"Prices were advanced this week in both regions to 4 1/2� and 4
5/8�-5 2/8�, in view of some of the refiners squawking because our
buying price was considerably lower than the publications."

															[ Footnote 33 ]

															It appears that, beginning in 1935 and increasing in the latter
part of 1936, state chain store legislation resulted in the majors'
leasing many of their retail service stations.

															[ Footnote 34 ]

															A defendant to whom a new trial was granted.

															[ Footnote 35 ]

															Further details of Standard's policy in posting retail prices
are discussed, p. 310 U. S.
198 .

															[ Footnote 36 ]

															The following is illustrative: the spot market price (computed
as indicated) was to govern when that price plus freight, plus 5
1/2� per gallon did not exceed the posted service station price,
exclusive of tax at destination on date of shipment. In case that
aggregate figure exceeded the service station price, then the price
to the jobber would be reduced by an amount equal to one-half of
the excess. In some cases, the major companies assumed the full
amount of the difference. The margin of 5 1/2� was based on the
seller's discount of 3 1/2� to jobbers. Hence, if the seller
increased or decreased that discount generally, then the margin of
5 1/2� would be increased or decreased by an equal or like amount.
The wording of the various contracts varied, but there was great
uniformity in principle.

															[ Footnote 37 ]

															For this reason, "spot open market" is frequently used, "open"
market referring to sales which are not made on contract nor based
on future publications.

															[ Footnote 38 ]

															In case actual sales cannot be obtained, he gets the prices at
which the refiners will sell to jobbers in that open spot
market.

															[ Footnote 39 ]

															Major companies sell little gasoline to jobbers on a spot basis.
The spot market prices published in the trade journals are based
largely on sales by independent refiners.

															[ Footnote 40 ]

															The National Petroleum News gives the Oilgram quotations in
weekly form.

															[ Footnote 41 ]

															That percentage is apparently reduced to about 10.5% if sales of
29 independent refiners (including the 14 named in the indictment)
are taken.

															What percentage these purchases by respondents were of the
Mid-Continent spot market in 1935 does not clearly appear, the
government's estimate of one-third to a half apparently being
somewhat high.

															[ Footnote 42 ]

															Comparable movements took place in the East Texas spot market
for regular gasoline until April 21, 1935, when those quotations
were discontinued.

															[ Footnote 43 ]

															Respondents computed that, for 1935, 8% of these purchases of
third grade gasoline were above the high; 10% were at the high; 7%
were between the high and low; 16% were below the low.

															[ Footnote 44 ]

															Respondents' computations comparing their tabulations with the
government's tabulations are as follows:

--------------------------------------------------------------------------------

															Government's Respondents'

															Price Group --------------------------------

															Tank- % Tank- %

															Cars Cars

--------------------------------------------------------------------------------

															Above the lowest quotations in Platt's Oilgram 7.45 8.09 516
7.5

															Above the lowest quotations in Chicago

															Journal of Commerce . . . . . . . . . . . . . 984 10.7 992
14.3

															At the lowest quotations in Platt's Oilgram. . . 6,407 69.64
4491 3 64.9

															At the lowest quotations in Chicago

															Journal of Commerce . . . . . . . . . . . . . 6,564 71.31 4419-3
63.9

															Below the lowest quotations in Platt's Oilgram 2,052 22.27
1912-3 27.6

															Below the lowest quotations in Chicago

															Journal of Commerce . . . . . . . . . . . . . 1,656 17.99 1508-3
21.8

															Total. . . . . . . . . . . . . . . . . . . 9,204 100.0 6920-3
100

--------------------------------------------------------------------------------

															The government's tabulations dealt with 9,204 tank cars which
defendants (excluding Sinclair) purchased on a flat price basis
from independent refiners in the Mid-Continent field between March
1, 1935, and April 30, 1936. Respondents' tabulations included
Sinclair and excluded sales by defendants who had already been
dismissed, and eliminated or reclassified alleged omissions or
improper classifications by the government.

															Respondents' computations also show that the percentage of
purchases at prices below the low quotations was higher during the
March-May, 1935, price rise than during the indictment period as a
whole, and that the percentage of purchases above the low was lower
during that period of price rise than during the period as a
whole.

															[ Footnote 45 ]

															Respondents' figures were: .7% above the high of the Journal;
.8% above the high of the Oilgram; 3.7% at the high of the Journal;
6.1% at the high of the Oilgram. Apparently all purchases above the
high were purchases of third grade, not regular, gasoline.

															[ Footnote 46 ]

															One government witness testified that, out of 1,729 contracts
made by the defendant major oil companies with jobbers in the
Mid-Western area during 1935, 1,461 provided that the basic price
was to be determined "on the basis of the average of the averages
of the high and low quotations of the Chicago Journal of Commerce
and Platt's Oilgram on spot market tank car gasoline." During 1935,
defendant companies sold over 900,000,000 gallons to jobbers in the
Mid-Western area out of total sales by them in that area of over
4,000,000,000 gallons.

															[ Footnote 47 ]

															These changes were apparently not made automatically, as the
factor of competition was taken into consideration.

															[ Footnote 48 ]

															A comparison of Monday low quotations for house brand gasoline
(Oklahoma market) with average service station prices for
Standard's regular grade gasoline (less taxes) for 28 cities
(including La Crosse and Milwaukee, Wis.) in the Mid-Western area
shows the latter following the former upward from March to June,
1935, and in January, 1936. Oklahoma Service Station March 4, 1935 4.375� 12.56�

															March 11, 1935 4.625 12.56

															March 18, 1935 4.750 12.56

															March 25, 1935 4.750 12.90

															April 1, 1935 4.875 12.90

															April 8, 1935 5.000 12.97

															April 15, 1935 5.125 13.26

															April 22, 1935 5.250 13.32

															April 29, 1935 5.250 13.32

															May 6, 1935 5.250 13.56

															May 13, 1935 5.250 13.56

															May 20, 1935 5.375 13.56

															May 27, 1935 5.500 13.56

															June 3, 1935 5.625 13.56

															January 6, 1936 5.625 13.35

															January 13, 1936 6.125 13.45

															January 20, 1936 6.125 13.93

															January 27, 1936 6.125 13.93

															[ Footnote 49 ]

															Prices below the normal price which Standard posted.

															[ Footnote 50 ]

															Average price (28 cities Mid-Western area) for Standard's
regular gasoline.

															[ Footnote 51 ]

															Sec. 5 is set forth, supra, note 18 [ Footnote 52 ]

															That report went on to say:

															". . . we believe such a program might be successful in raising
both tank-car and retail prices to their proper level in
relationship to crude oil prices."

															"If higher tank-car prices are obtained, we believe they can be
sustained only by corresponding increases in retail gasoline
prices; otherwise, the burden merely would be shifted from small
refiners to small marketers, who in many instances have been in
just as much distress as the refiners. We find that abnormally low
retail prices can depress tank-car prices just as much as low
tank-car prices can pull down the retail price structure. Thus, it
appears to be essential that both prices move up together."

															[ Footnote 53 ]

															The Administrator was reported as saying about that report that,
if a parity between crude oil prices and gasoline prices did not
come soon, he would call a meeting of representatives of the
industry to see what could be done about it. On March 30, 1935,
according to respondents, the Administrator wrote concerning that
report:

															"Concerning the independent refiners, other than those in
California, it appears from the report of the Committee on Small
Enterprise that the outstanding difficulty is due to the disparity
between posted crude oil prices and refinery realizations. This
situation has been deplorable for many months, but it is my
understanding that, at present, the activity of the Stabilization
Committees is having a distinct effect in the improvement of
refinery prices, and that, were it not for old contracts, many of
which are badly shaded with respect to the posted price, the
independent refiner is approaching a normal market structure."

															Respondents also offered to prove that the Blazer Committee
advised the Board in April, 1935, that there was then no occasion
to reduce crude oil prices, since "we consider tank car gasoline
prices now almost up to parity with sufficient additional advances
anticipated in both tank car and retail prices;" and expressed its
satisfaction "with the success of the program to stabilize tank-car
markets."

															[ Footnote 54 ]

															Respondents offered to prove that Arnott's lawyer advised him on
July 31, 1934, that, although the letter of July 20, 1934, was "not
precisely an approval" by the Administrator of any agreement which
gave "complete protection" from any prosecution under the antitrust
laws, it nevertheless was "for all practical purposes a complete
protection to you and your committees to engage in all reasonable
activities to restore prices to normal levels."

															[ Footnote 55 ]

															A subcommittee of the Planning & Coordination Committee met
with the Board on May 10, 1935, to discuss the report of the Blazer
Committee. The recommendation in that report that the majors buy
distress gasoline from the independents was discussed. Arnott
testified that his group told the Board that "we already had buying
of gasoline in effect," to which the Chairman of the Board was said
to have replied, "That is quite so, and disposes of that part of
the report."

															[ Footnote 56 ]

															Prepared between December, 1935, and February, 1936, and issued
in June, 1936, by the Department of the Interior.

															[ Footnote 57 ]

															In speaking of the general work of this Committee (which as we
have noted was set up to deal with price wars) the report stated:
"The stabilization program was perhaps the outstanding development
under the code."

															[ Footnote 58 ]

															This Compact (49 Stat. 939) was authorized in February, 1935,
and became effective in August, 1935.

															[ Footnote 59 ]

															Under this indictment, proof that prices in the Mid-Western area
were raised as a result of the activities of the combination was
essential, since sales of gasoline by respondents at the increased
prices in that area were necessary in order to establish
jurisdiction in the Western District of Wisconsin. Hence, we have
necessarily treated the case as one where exertion of the power to
fix prices ( i.e., the actual fixing of prices) was an
ingredient of the offense. But that does not mean that both a
purpose and a power to fix prices are necessary for the
establishment of a conspiracy under § 1 of the Sherman Act. That
would be true if power or ability to commit an offense was
necessary in order to convict a person of conspiring to commit it.
But it is well established that a person "may be guilty of
conspiring, although incapable of committing the objective
offense." United States v. Rabinowich, 238 U. S.
78 , 238 U. S. 86 .
And it is likewise well settled that conspiracies under the Sherman
Act are not dependent on any overt act other than the act of
conspiring. Nash v. United States, 229 U.
S. 373 , 229 U. S. 378 .
It is the "contract, combination . . . or conspiracy, in restraint
of trade or commerce" which § 1 of the Act strikes down, whether
the concerted activity be wholly nascent or abortive. on the one
hand, or successful, on the other. See United States v. Trenton
Potteries Co., 273 U. S. 392 , 273 U. S. 402 . Cf. Retail Lumber Dealer's Assn. v. State, 95 Miss. 337,
48 So. 1021. And the amount of interstate or foreign trade involved
is not material ( Montague & Co. v. Lowry, 193 U. S.
38 ), since § 1 of the Act brands as illegal the
character of the restraint, not the amount of commerce affected. Steers v. United States, 192 F. 1, 5; Patterson v.
United States, 222 F. 599, 618, 619. In view of these
considerations, a conspiracy to fix prices violates § 1 of the Act
though no overt act is shown, though it is not established that the
conspirators had the means available for accomplishment of their
objective, and though the conspiracy embraced but a part of the
interstate or foreign commerce in the commodity. Whatever may have
been the status of price-fixing agreements at common law (Allen,
Criminal Conspiracies in Restraint of Trade at Common Law, 23
Harv.L.Rev. 531), the Sherman Act has a broader application to them
than the common law prohibitions or sanctions. See United
States v. Trans-Missouri Freight Assn., 166 U.
S. 290 , 166 U. S. 328 .
Price-fixing agreements may or may not be aimed at complete
elimination of price competition. The group making those agreements
may or may not have power to control the market. But the fact that
the group cannot control the market prices does not necessarily
mean that the agreement as to prices has no utility to the members
of the combination.

															The effectiveness of price-fixing agreements is dependent on
many factors, such as competitive tactics, position in the
industry, the formula underlying price policies. Whatever economic
justification particular price-fixing agreements may be thought to
have, the law does not permit an inquiry into their reasonableness.
They are all banned because of their actual or potential threat to
the central nervous system of the economy. See Handler,
Federal Anti-Trust Laws -- A Symposium (1931), pp. 91 et
seq. The existence or exertion of power to accomplish the desired
objective ( United States v. United States Steel Corp., 251 U. S. 417 , 251 U. S.
444 -451; United States v. International Harvester
Co., 274 U. S. 693 , 274 U. S.
708 -709) becomes important only in cases where the
offense charged is the actual monopolizing of any part of trade or
commerce in violation of § 2 of the Act. An intent and a power to
produce the result which the law condemns are then necessary. As
stated in Swift & Co. v. United States, 196 U.
S. 375 , 196 U. S.
396 ,

															". . . when that intent and the consequent dangerous probability
exist, this statute, like many others, and like the common law in
some cases, directs itself against that dangerous probability as
well as against the completed result."

															But the crime under § 1 is legally distinct from that under § 2
( United States v. MacAndrews & Forbes Co., 149 F. 836, United States v. Buchalter, 88 F.2d 625), though the two
sections overlap in the sense that a monopoly under § 2 is a
species of restraint of trade under § 1. Standard Oil Co. v.
United States, 221 U. S. 1 , 221 U. S. 59 -61; Patterson v. United States, supra, p. 620. Only a
confusion between the nature of the offenses under those two
sections ( see United States v. Nelson, 52 F. 646; United States v. Patterson, 55 F. 605; Chesapeake
& O. Fuel Co. v. United States, 115 F. 610) would lead to
the conclusion that power to fix prices was necessary for proof of
a price-fixing conspiracy under § 1. Cf. State v. Eastern Coal
Co., 29 R.I. 254, 70 A. 1; State v. Scollard, 126
Wash. 335, 218 P. 224.

															[ Footnote 60 ]

															It should be noted in this connection that the typical method
adopted by Congress when it has lifted the ban of the Sherman Act
is the scrutiny and approval of designated public representatives.
Under the N.I.R.A., this could be done through the code machinery
with the approval of the President as provided in §§ 3(a) and 5, supra, note 18 Under § 407(8) of the Transportation Act of 1920, 41 Stat. 482,
carriers, including certain express companies, which were
consolidated pursuant to any order of the Interstate Commerce
Commission were relieved from the operation of the Anti-Trust laws. And see the Maloney Act (§ 15A of the Securities Exchange
Act of 1934, 52 Stat. 1070), providing for the formation of
associations of brokers and dealers with the approval of the
Securities and Exchange Commission and establishing continuous
supervision by the Commission over specified activities of such
associations, and the Bituminous Coal Act of 1937, 50 Stat. 72,
especially §§ 4 and 12 -- particularly as they relate to the fixing
of minimum and maximum prices by the Bituminous Coal
Commission.

															[ Footnote 61 ]

															Respondents strongly urge that this is not true in the case of
the testimony of an employee of one of the trade journals. His
prior testimony indicated (1) that the major companies were buying
exactly at the journal quotations, so that the graph of those
quotations represented prices paid under the buying program; (2)
that prices paid by the majors "outweighed" the jobbers' sales
reported to his journals. At the trial, he testified that those
grand jury statements were not true. And they were not. But those
matters are not essential issues in the case. That purchases under
the buying program did not lead the market up, that the vast
majority of purchases were at or below the low quotations, that the
volume of purchases did not eliminate all competition, that the
spot market prices were still determined by competitive forces,
that the volume of purchases under the buying programs was
relatively small, are wholly immaterial, as we have seen.

															[ Footnote 62 ]

															In this connection, the court said (p. 944) that it appeared
"without dispute that a concerted buying movement took place in the
Mid-Continent field;" that, as to its character and the existence
of a concerted East Texas program, there was "ample evidence to
take the case to the jury;" and that the proofs were sufficient to
sustain the verdict as to the charge that defendants "were able to
and did effectually tie the jobbers' price" in the Mid-Western area
to the tank car price in the spot market. It significantly added
(p. 944):

															"It is claimed by the defendants that they did not have the
power to control the price as charged, and that, inasmuch as some
of the large companies did not or have not been shown to have
participated in the movement, the power of the defendants in that
respect was inadequate for the purpose. This does not follow, for
the reason that large buyers, both in East Texas and in the
Mid-Continent fields, while acting separately, were nevertheless
buying for their requirements in these fields, as they had always
done and as defendants had every reason to believe they would
continue to do. The defendants were thus able to consider that
these buyings would necessarily reduce the available gasoline which
they proposed to take off the market just as effectively as though
these other companies had joined in the program. The amount of
distress gasoline would be exactly the same in any event, and the
proof shows that the surplus was, in fact, a very small part of the
total, so much so that most of the defendants have shown that its
acquisition, in addition to other buying, did not materially
increase their inventories. I am satisfied that there was ample
evidence to sustain the contention of the Government that the
defendants did have the power to control the market, and that they
did so, as charged."

															[ Footnote 63 ]

															The question of the effect of the buying programs on market
prices obviously concerns only the corporate defendants. The one
corporate defendant granted after verdict a directed verdict of
acquittal was the Globe Oil & Refining Co. (Kansas). The record
does not show that this company made any spot market purchases in
1935 or 1936.

															[ Footnote 64 ]

															The standard form of jobber contract referred to in par. 11 of
the indictment was described therein as follows:

															"The price of gasoline to the jobber shall be the average spot
market price, determined by averaging the high and low spot market
prices for gasoline of comparable octane rating published by
defendant Platt's Oilgram for the Tulsa, Oklahoma, market, and by
defendant Chicago Journal of Commerce on date of shipment. If the
average spot market price plus freight to destination shall allow
the buyer a margin of less than 5 1/2� per gallon below the service
station price posted by defendant Standard of Indiana, then the
buyer and the seller shall share equally in the deficit below a 5
1/2� margin. In certain States in which the Standard of Indiana has
recently discontinued the posting of retail prices, such jobber
margins have been calculated on the basis of a margin of 2� below
the dealer tank wagon prices posted by the Standard of Indiana
(such tank wagon prices having usually been 3 1/2� below the posted
retail prices)."

															MR. JUSTICE ROBERTS, dissenting.

															I regret that I am unable to agree to the court's decision. I
think that, for various reasons, the judgment of the District Court
should not stand. Page 310 U. S. 255 The opinion fully and fairly sets forth the facts proved at the
trial, and to its statement nothing need be added. Some of the
reasons for my inability to agree with the court's conclusions
follow: ----- The Government relied for venue in the Western District of
Wisconsin upon the commission in that district of overt acts in aid
of the alleged common enterprise. I think the indictment fails to
allege, and the evidence fails to disclose, the commission of any
such act in the district of trial. I agree with the dissenting
judge in the Circuit Court of Appeals that the case should be
dismissed for this reason.

															Paragraph 17 of the indictment alleges that the spot market tank
car prices of gasoline substantially influence the retail
prices.

															Paragraph 18 is the only one that defines the charged
conspiracy. It alleges that the defendants and others, knowing the
facts pleaded by way of inducement (including the fact that retail
prices follow spot market tank car prices),

															"combined and conspired together for the purpose of artificially
raising and fixing the tank car prices of gasoline in the
aforementioned spot markets, . . . and, as intended by them,
defendants have artificially raised and fixed such spot market tank
car prices of gasoline and have maintained such prices at
artificially high and noncompetitive levels and at levels agreed
upon among them, . . . and have thereby intentionally
increased and fixed the tank car prices of gasoline contracted to
be sold, and sold, in interstate commerce as aforesaid in the
midwestern area (including the Western District of Wisconsin). . .
."

															It is further alleged that the defendants have arbitrarily, due
to the form of their contract [ Footnote
2/1 ] with jobbers, exacted Page 310 U. S. 256 large sums of money from jobbers and, in turn, have
intentionally raised the general level of retail prices in the
midwestern area (including the Western District of Wisconsin).

															The sole and only conspiracy charged is the agreement
artificially to raise and fix spot market tank car prices of
gasoline in the Mid-Continent field.

															Paragraph 19 is devoted to the means by which the
conspiracy thus described was " effectuated. " The conduct
of the defendants in this respect is described as their engaging
and participating in two concerted gasoline buying programs -- one,
the East Texas buying program, and the other the Mid-Continent
buying program -- for the purchase by each of them from independent
refiners in spot transactions of large quantities of gasoline in
the East Texas and Mid-Continent fields.

															After describing these buying programs in subsequent paragraphs,
the indictment, in paragraph 25, alleges that the conspiracy "has
operated and has been carried out in part within the Western
District of Wisconsin." The method of its operation in that
district is described as follows:

															"In pursuance of said combination and conspiracy, defendant
major oil companies (with the exception of Standard of Indiana and
Gulf) have contracted to sell and have sold and have
delivered large quantities of gasoline in tank car lots to
jobbers within said district at the artificially raised and fixed
and noncompetitive prices aforesaid and have arbitrarily exacted
from jobbers within said district large sums of money. Defendant
major oil companies (with the exception of Gulf) have solicited and
taken contracts and orders for said gasoline within said district,
sometimes by sales representatives located there, which district
has been an important market for their product and they have
required retail dealers and consumers in said districts to pay
artificially increased prices for gasoline as aforesaid, all by
virtue of said combination Page 310 U. S. 257 and conspiracy and pursuant to the purposes and ultimate
objectives thereof."

															Thus, after describing the conspiracy as one to buy on spot
markets for the purpose of raising the price of gasoline on those
markets, the indictment purports to charge, as overt acts, entirely
unrelated transactions of individual defendants in the resale of
gasoline to jobbers and at retail in the Western District of
Wisconsin.

															There is no evidence in the record that any of the purchases
made by the defendants pursuant to the conspiracy was made in
Wisconsin. But, if the indictment could bear the construction that
the charged conspiracy involved an agreement as to the terms of
resale to jobbers and retailers, proof was lacking to support any
such alleged agreement. Government counsel, both in pleading and in
admissions at trial, so conceded.

															In its Bill of Particulars, the Government said:

															"The Government does not claim that each defendant entered into
an agreement not to sell jobbers except in accordance with 'the
contract described in paragraph 11 of the indictment.'"

															At trial, Government counsel repeatedly disavowed any charge in
the indictment or any claim of the Government that there was an
agreement amongst the defendants with respect to the price at which
gasoline should be sold to jobbers or at retail. The evidence
showed, without contradiction, that the Standard Oil Company of
Indiana was the market leader in this area, and that, when it
posted its price, none of the other defendants could sell at a
higher price. It further showed that, at various times, Standard
was forced to reduce its price to meet the competition of others.
In this connection, Government counsel made the following
statements:

															". . . We do not say that the Standard of Indiana, when it posts
a retail price, first consults with the other companies to find out
what retail price should be posted. " Page 310 U. S. 258 "If that is what you're worrying about, if you think we're
charging you with sitting around a table and agreeing on a uniform
retail price, don't worry, because that isn't what we are
charging."

															In its brief in this Court, the Government attempts to avoid the
effect of these concessions by the statement that the defendants
"were not free to sell as they pleased in the midwestern areas,"
and adds that "an obligation to adhere to their price practice of
selling on the basis of spot market prices was implicit in their
unlawful agreement." This amounts to saying that the conspiracy was
not the one charged in the indictment, but was a much more ample
conspiracy not only to raise the general level of tank car prices
on the spot market by purchasing on that market, but to raise,
maintain, and fix uniform resale prices to jobbers and retailers.
But this contention does not aid the Government, for there is no
evidence of any agreement to raise, or to maintain, jobber and
retail prices, but, on the contrary, evidence that competition in
such sales existed during the period in question.

															Situations arise, and results ensue, from the prosecution of any
agreement or conspiracy. Individual defendants may expect benefits
to follow from their adherence to a conspiracy or agreement; but
benefits or results, whether anticipated or unforeseen, occurring
after consummation of the conspiracy, and because of it, are not
overt acts done in aid and furtherance of the conspiracy. The
authorities to this effect are uniform. [ Footnote 2/2 ]

															The Government relies on United States v. Trenton Potteries
Co., 273 U. S. 392 .
That case is clearly not in point. There, the conspiracy was to fix
the prices of the commodity manufactured and sold by the
defendants, and to adhere to the prices so fixed. This court held
that Page 310 U. S. 259 a sale made pursuant to that agreement in the Southern District
of New York afforded venue in that district of an indictment for
violation of the Sherman Act. The case would be apposite if the
pleading and proof in the instant case were of a conspiracy to fix
and maintain jobber and retail prices and adherence to the
agreement in sales to jobbers and retailers. Neither pleading nor
proof goes to any such conspiracy.

															In accordance with the Government's contention, the trial court
repeatedly charged that, in order to convict, the jury must find
that a combination existed and that the combination agreed to, and
had the power to, raise the tank car spot market price of gasoline.
Of course, the jury was at liberty to find that any number of the
defendants less than all fulfilled the conditions named by the
court. By its verdict, the jury found that those who were
convicted, as a body, (1) possessed the power to raise the price
and (2) agreed so to do. The trial court granted a new trial to a
number of defendants, including Standard of Indiana, the largest
major oil company doing business in the area.

															Standard was granted a new trial on the ground that there was no
sufficient evidence to connect it with the conspiracy. By refusing
new trials to the other corporate defendants, the court has entered
its own verdict that the others involved, excluding Standard, had
the power, and agreed, to raise the level of spot market prices in
the midwestern area. There is no jury verdict to that effect; no
jury has ever passed upon that question, but an affirmative finding
on that question is vital to the guilt of the defendants now before
us. To affirm the judgment of conviction is to affirm a finding of
fact by the trial judge without a jury, and to deny the respondents
the right to jury trial guaranteed by the Sixth Amendment of the
Constitution. Page 310 U. S. 260 The court's instructions to the jury were that they should
return a verdict of guilty if they found that the defendants'
actions had in any degree contributed to a rise in gasoline prices.
The defendants insisted that the test was the effect of their
combination upon competition, and that they could not be convicted
unless the jury found that their agreement, and their conduct
pursuant thereto, unreasonably restrained competition in interstate
commerce.

															There was substantial evidence that all the defendants agreed
to, or did, was to act in concert to eliminate distress gasoline;
that such gasoline was a competitive evil in that it tended to
impair or destroy normal competition. There was substantial
evidence that what they agreed to, and did, neither fixed nor
controlled prices nor unreasonably affected normal competition, and
that their conduct affected prices only in the sense that the
purchase of distress gasoline at going prices permitted prices to
rise to a normal competitive level. There was no evidence that, as
charged in the indictment, they agreed to, or in fact did, fix
prices. The Court of Appeals, as I think, correctly held that

															"the substance of what was accomplished and agreed upon was that
the major companies would purchase from the independent refiners
the latters' surplus gasoline at going market prices."

															I think the defendants were entitled to have the jury charged
that, in order to convict them, the jury must find that, although
defendants knew the result of their activities would be a rise in
the level of prices, nevertheless, if what they agreed to do and
did had no substantial tendency to restrain competition in
interstate commerce in transactions in gasoline, the verdict should
be not guilty.

															As has been pointed out by this court, violation of the
antitrust act depends upon the circumstances of individual Page 310 U. S. 261 cases. [ Footnote 2/3 ] It is
always possible to distinguish earlier decisions by reference to
the facts involved in them, but, in the course of decision in this
court, certain principles have been laid down to which, I think,
the charge of the court ran counter.

															One of these firmly established principles is that concerted
action to remove a harmful and destructive practice in an industry,
even though such removal may have the effect of raising the price
level, is not offensive to the Sherman Act if it is not intended
and does not operate unreasonably to restrain interstate commerce,
and such action has been held not unreasonably to restrain commerce
if, as here, it involves no agreement for uniform prices, but
leaves the defendants free to compete with each other in the matter
of price. [ Footnote 2/4 ]

															No case decided by this court has held a combination illegal
solely because its purpose or effect was to raise prices. The
criterion of legality has always been the purpose or effect of the
combination unduly to restrain commerce.

															I think Appalachian Coals, Inc. v. United States, 288 U. S. 344 , a
controlling authority sustaining the defendants' contention that
the charge foreclosed a defense available to them under the Sherman
Act. It is said that their combination had the purpose and effect
of putting a floor under the spot market for gasoline. But that
was Page 310 U. S. 262 precisely the purpose and effect of the plan in the Appalachian case. True, the means adopted to overcome the
effect of the dumping of distress products on the market were not
the same in the two cases, but means are unimportant provided
purpose and effect are lawful. Ethyl Gasoline Corp. v. United States, 309 U.
S. 436 , is relied upon by the Government but, in that
case, as in United States v. Trenton Potteries Co., 273 U. S. 392 ,
maintenance of prices fixed by agreement was involved. So also, in Sugar Institute v. United States, 297 U.
S. 553 , condemned features of the common plan had to do
with the maintenance of announced prices and the abstinence from
selling certain sorts of sugar. The combinations or agreements in
these cases specifically prevented competitive pricing or took a
commodity out of competition. This is not such a case.

															As I think, the error in the court's charge is well illustrated
by the following instruction:

															"If you should find that the defendants acting together, and
those independent refiners acting in concert with them, did not
have the power to raise the level of spot market prices in the spot
markets referred to in the indictment, or that they did not combine
for that purpose, and if you should find also that the
purchase of the said gasoline by the defendants affected the spot
market prices only indirectly and incidentally, then you
may consider all the circumstances surrounding the activities of
the defendants to determine whether they were intended to produce
destructive competition and restore competition to a fairer base
and produce fairer price levels. In such event, you may conclude
that the purchase of such gasoline in the manner shown by the
evidence was reasonable, and beneficial and not injurious to the
public interest and that therefore the restraint of trade was not
undue and Page 310 U. S. 263 not illegal, and you may acquit the defendants."

															(Italics supplied.)

															This was to tell the jury that, if they found the combination
had power and purpose to raise the general level of prices, they
should convict without considering whether the defendants' concert
of action was intended merely to remove a source of destructive
competition, and without considering whether, as defendants
contended and sought to prove, other factors in the industry, over
which they had no control, limited their power to raise prices
beyond a level which would be the normal result of the removal of
the abuses engendered by the dumping of distress gasoline. ----- I think that the closing address of counsel for the Government
is ground for setting aside the verdict.

															It is true that, to much that was objectionable in that address,
the defendants did not object, or, if they did, failed to except.
However, they assigned error to the whole of it, and excepted to
some of the more egregious violations of the canons of fair
comment. I am of opinion that a situation is presented which,
regardless of the technicalities of procedure, requires action by
an appellate court. But, in any event, portions which are the
subject of exception alone require a reversal of the judgment.

															The final and closing address covers twenty-eight pages of the
record. About five refer to the facts in the case. The balance
consists largely of what the speaker himself characterized as
"clowning" and personal references to counsel, parties, the court,
and other subjects, the object of which apparently was to distract
attention from the issues.

															At many points, counsel should have been stopped by the court
and warned against continuance of such tactics.

															The Circuit Court of Appeals said as to this matter: Page 310 U. S. 264 "The Government does not undertake to justify much of the
argument and misconduct complained of, but it earnestly insists
that any error committed is not of a reversible nature. As the case
is to be reversed, there seems no occasion for us to make a
determination in this respect. We shall merely express the opinion
that some of the argument complained of was highly improper, and
that, taken in connection with the misuse of the Grand Jury
testimony, heretofore discussed, would present a very serious
obstacle to the affirmance of the judgment."

															I shall not quote those portions of the address which are quoted
or summarized in the opinion of the court. It will suffice to make
added reference to several portions.

															One of the most reprehensible things a prosecutor can do is to
attempt to put into evidence before the jury his own, and his
colleagues', opinion as to the guilt of the defendants he is
prosecuting. Such a practice brings before the jury the unsworn
testimony of a sworn officer of the Government. This fact lends it
undue and improper weight, and injects an element into the case
which is so insidious and so impossible to counteract that trial
judges, in my experience, have never hesitated to withdraw a juror
and declare a mistrial because of this violation of the canons.

															In the closing address, counsel said to the jury:

															"Now, if anybody doubts, if anybody has the least shadow of a
doubt about the fact that these men [referring to Government
counsel] believe to the bottom of their hearts in the justice of
the cause that they espouse here, I can disabuse their minds of
that doubt at any time. They have been aggressive, and they have
been forceful; their movements here have been intelligent, well
timed; and, as I said, they have come into this courtroom morning
after morning, worn and tired almost to the breaking point. And it
seemed to me that I some times got the feeling, coming as they did
then before you Page 310 U. S. 265 to present this evidence and this case, they were something like
the Crusaders of old, saying 'God wills it, God wills it.'"

															Objection was not made by counsel for the defendants at the time
of this statement, but when a somewhat similar statement was made a
few moments later, objection was noted and exception taken. I
think, however, that the offense was so flagrant that the court
itself should have intervened irrespective of any objection.

															A little later, these statements occurred:

															"Now, just between yourselves, do you honestly think that these
boys here [indicating counsel at government table], fired with the
enthusiasm of crusaders, as I say, and having given to this case
every ounce of mental and physical strength they have, and I myself
have contributed, also, would be trying to convict these men unless
that was the wish and desire of the highest officials in the
government of the United States?"

															After objection and exception, counsel continued as follows:

															"Now just what do you think about it? Do you think these are
three or four or five of these young fellows, as they have been
calling them, just starting out on their own, running hog-wild?
These are important men. I presume you all know they are engaged in
a very important business, a business the operation of which is
almost a necessity in this country today. You don't think the
government of the United States would allow four or five lawyers to
come out here and prosecute this case against them against their
wishes, or that the Secretary of the Department of the Interior
would allow us to do it if he didn't want it done? And, if he
wanted it done, it was because he believed, as did the other men in
Washington, that there was a violation of law here so outstanding
and so withering and far-reaching in its effect that something
ought to be done to stop it, and by that to tell the people Page 310 U. S. 266 of this country that you can't do these things and get away with
it."

															Again, there was objection and exception.

															Counsel did not confine himself to testimony as to the
prosecutors' belief in the defendants' guilt, but, in attacking the
credibility of an important witness for defendants, essayed to
contradict that testimony by a statement of counsel's own knowledge
of facts. The quotation from the address will make the matter
clear:

															"I want to refer in a moment to something that made an
impression on me."

															"You know, we lawyers have to depend -- most of us are kind of
tough guys. We have our own way of talking about witnesses. And one
thing that we very often say and talk about is the three classes of
liars. There is the plain liar, the damn liar, and the expert
witness. And of all of them, the expert witness is the worst."

															"There were a few of them here. There was Swensrud, the
representative of the Standard of Ohio; there was Van Govern, and I
think there was another one."

															"But I just didn't think much of Swensrud's whole testimony,
especially after I found out that he was giving testimony that they
could ship gasoline in 1935 and in 1936 up the Mississippi River to
St. Paul. I happen to be around the Mississippi River quite a
little, and know quite a lot about it. In 1935 and 1936, you
couldn't get a rowboat up the Mississippi River north of Winona --
because the Government was putting in these dams for the purpose of
creating the nine-foot channel that you have read so much about.
They had concrete clear across the river, spaced in so many ways
that, as I say, you just couldn't get a rowboat up there. When
Swensrud talked about gasoline going up that river, where I knew,
because I lived there and was around there, that it couldn't be
done, I just thought ___. . . . " Page 310 U. S. 267 After objection and a request that the court direct the jury to
disregard the statement, the court ruled: "The jury may disregard
it. I didn't hear it. I was thinking about something else."

															Thereupon, counsel resumed as follows:

															"Now, if you will let me alone a few minutes, I will be through.
If you don't, like 'Old Man River,' I will just keep rolling along.
I don't want to do that."

															"Now I was referring to these witnesses who knew so much. There
was Van Govern, Swensrud, and a fellow named J. D. Miller. He was
the fellow who never looked at anybody, so you could catch his eye.
They knew so much, in the way they were telling it to you, that it
is impossible, just impossible, to believe that they could know as
much as they said they did about it. They just covered too much
territory. I think all history, sacred and profane, gives us but
one single example of a person who knew everything -- and he was
not only a man, but he was God. And He gave up His life in a
shameful death upon the cross, between two thieves."

															" * * * *" It is true that no formal exception was taken, but the matter
was highly prejudicial. The court should have dealt with it in some
definite and positive way, which he omitted to do.

															Considering what is set out in the opinion of this court, and
the additional references I have made to the address, I am of
opinion that counsel's argument was highly improper, as indeed the
Government admits, and, further, that it was highly prejudicial. I
do not think the court took proper means to counteract the
impropriety and prejudice thus created, and I think the only remedy
available is to set aside a verdict ensuing upon such misconduct. Compare Berger v. United States, 295 U. S.
78 , 295 U. S. 85 , 295 U. S.
88 -89.

															MR. JUSTICE McREYNOLDS concurs in this opinion.

															[ Footnote 2/1 ]

															The form and use of this contract is described in paragraph 11
of the indictment.

															[ Footnote 2/2 ] Lonabaugh v. United States, 179 F. 476; United
States v. Black, 160 F. 431; Rose v. St. Clair, 28
F.2d 189.

															[ Footnote 2/3 ] See Maple Flooring Mfrs.' Assn. v. United States, 268 U. S. 563 , 268 U. S.
579 .

															[ Footnote 2/4 ] United States v. American Tobacco Co., 221 U.
S. 106 , 221 U. S. 178 , 221 U. S. 180 ; United States v. Union Pac. R. Co., 226 U. S.
61 , 226 U. S. 84 -85; American Column & Lumber Co. v. United States, 257 U. S. 377 , 257 U. S. 400 , 257 U. S. 417 ; Maple Flooring Mfrs.' Assn. v. United States, 268 U.
S. 563 , 268 U. S. 568 ; Appalachian Coals, Inc. v. United States, 288 U.
S. 344 , 288 U. S.
362 -363, 288 U. S.
373 -374; Sugar Institute, Inc. v. United
States, 297 U. S. 553 , 297 U. S.
597 -598.