U.S. Supreme Court Swift & Co. v. United States, 196
U.S. 375 (1905) Swift and Company v. United
States No. 103 Argued January 6, 7,
1905 Decided January 30,
1905 196
U.S. 375 APPEAL FROM THE CIRCUIT COURT OF
THE UNITED STATES FOR THE NORTHERN DISTRICT OF
ILLINOIS Syllabus A combination of a dominant proportion of the dealers in fresh
meat through out the United States not to bid against, or only in
conjunction with, each other in order to regulate prices in and
induce shipments to the livestock markets in other States, to
restrict shipments, establish uniform rules of credit, make uniform
and improper rules of cartage, and to get less than lawful rates
from railroads to the exclusion of competitors with intent to
monopolize commerce among the States is an illegal combination
within the meaning and prohibition of the act of July 2, 1890, 26
Stat. 209, and can be restrained and enjoined in an action by the
United States.

															It does not matter that a combination of this nature embraces
restraint and monopoly of trade within a single State if it also
embraces and is directed against commerce among the States.
Moreover, the effect of such a combination upon interstate commerce
is direct, and not accidental, secondary, or remote, as in United Slates v. E. C. Knight Co., 156 U. S.
1 .

															Even if the separate elements of such a scheme are lawful, when
they are bound together by a common intent as parts of an unlawful
scheme to monopolize interstate commerce, the plan may make the
parts unlawful.

															When cattle are sent for sale from a place in one State, with
the expectation Page 196 U. S. 376 they will end their transit, after purchase, in another State,
and when, in effect, they do so with only the interruption
necessary to find a purchaser at the stockyards, and when this is a
constantly recurring course, it constitutes interstate commerce,
and the purchase of the cattle is an incident of such commerce.

															A bill in equity, and the demurrer thereto, are neither of them
to be read and construed strictly as an indictment, but are to be
taken to mean what they fairly convey to a dispassionate reader by
a fairly exact use of English speech.

															The facts are stated in the opinion. Page 196 U. S. 390 MR. JUSTICE HOLMES delivered the opinion of the court.

															This is an appeal from a decree of the Circuit Court, on
demurrer, granting an injunction against the appellants' commission
of alleged violations of the act of July 2, 1890, c. 647, 26 Stat.
209, "to protect trade and commerce against unlawful restraints and
monopolies." It will be necessary to consider both the bill and the
decree. The bill is brought against a number of corporations, firms
and individuals of different States, and makes the following
allegations: 1. The defendants Page 196 U. S. 391 (appellants) are engaged in the business of buying livestock at
the stockyards in Chicago, Omaha, St. Joseph, Kansas City, East St.
Louis, and St. Paul, and slaughtering such livestock at their
respective plants in places named, in different States, and
converting the livestock into fresh meat for human consumption. 2.
The defendants

															"are also engaged in the business of selling such fresh meats,
at the several places where they are so prepared, to dealers and
consumers in divers States and Territories of the said United
States other than those wherein the said meats are so prepared and
sold as aforesaid, and in the District of Columbia, and in foreign
countries, and shipping the same meats, when so sold from the said
places of their preparation, over the several lines of
transportation of the several railroad companies serving the same
as common carriers, to such dealers and consumers, pursuant to such
sales."

															3. The defendants also are engaged in the business of shipping
such fresh meats to their respective agents at the principal
markets in other States, etc., for sale by those agents in those
markets to dealers and consumers. 4. The defendants together
control about six-tenths of the whole trade and commerce in fresh
meats among the States, Territories and District of Columbia, and,
5, but for the acts charged, would be in free competition with one
another.

															6. In order to restrain competition among themselves as to the
purchase of livestock, defendants have engaged in, and intend to
continue, a combination for requiring and do and will require their
respective purchasing agents at the stockyards mentioned, where
defendants buy their livestock (the same being stock produced and
owned principally in other States and shipped to the yards for
sale) to refrain from bidding against each other, "except
perfunctorily and without good faith," and by this means compelling
the owners of such stock to sell at less prices than they would
receive if the bidding really was competitive.

															7. For the same purposes, the defendants combine to bid up,
through their agents, the prices of livestock for a few days at Page 196 U. S. 392 a time, "so that the market reports will show prices much higher
than the state of the trade will warrant," thereby inducing stock
owners in other States to make large shipments to the stockyards,
to their disadvantage.

															8. For the same purposes, and to monopolize the commerce
protected by the statute, the defendants combine "to arbitrarily,
from time to time raise, lower, and fix prices, and to maintain
uniform prices at which they will sell" to dealers throughout the
States. This is effected by secret periodical meetings, where are
fixed prices to be enforced until changed at a subsequent meeting.
The prices are maintained directly, and by collusively restricting
the meat shipped by the defendants, whenever conducive to the
result, by imposing penalties for deviations, by establishing a
uniform rule for the giving of credit to dealers, etc., and by
notifying one another of the delinquencies of such dealers and
keeping a black list of delinquents, and refusing to sell meats to
them.

															9. The defendants also combine to make uniform charges for
cartage for the delivery of meats sold to dealers and consumers in
the markets throughout the States, etc., shipped to them by the
defendants through the defendants' agents at the markets, when no
charges would have been made but for the combination.

															10. Intending to monopolize the said commerce and to prevent
competition therein, the defendants "have all and each engaged in
and will continue" arrangements with the railroads whereby the
defendants received, by means of rebates and other devices, rates
less than the lawful rates for transportation, and were exclusively
to enjoy and share this unlawful advantage to the exclusion of
competition and the public. By force of the consequent inability of
competitors to engage or continue in such commerce, the defendants
are attempting to monopolize, have monopolized, and will monopolize
the commerce in livestock and fresh meats among the States and
Territories, and with foreign countries, and, 11, the defendants
are and have been in conspiracy with each other, with Page 196 U. S. 393 the railroad companies and others unknown, to obtain a monopoly
of the supply and distribution of fresh meats throughout the United
States, etc. And, to that end, defendants artificially restrain the
commerce and put arbitrary regulations in force affecting the same
from the shipment of the livestock from the plains to the final
distribution of the meats to the consumers. There is a prayer for
an injunction of the most comprehensive sort against all the
foregoing proceedings and others, for discovery of books and papers
relating directly or indirectly to the purchase or shipment of
livestock, and the sale or shipment of fresh meat, and for an
answer under oath. The injunction issued is appended in a note. * Page 196 U. S. 394 To sum up the bill more shortly, it charges a combination of a
dominant proportion of the dealers in fresh meat throughout the
United States not to bid against each other in the livestock
markets of the different States, to bid up prices for a few days in
order to induce the cattle men to send their stock to the
stockyards, to fix prices at which they will sell, and to that end
to restrict shipments of meat when necessary, to establish a
uniform rule of credit to dealers and to keep a blacklist, to make
uniform and improper charges for cartage, and finally, to get less
than lawful rates from the railroads to the exclusion of
competitors. It is true that the last charge is not clearly stated
to be a part of the combination. But, as it is alleged that the
defendants have each and all made arrangements with the railroads,
that they were exclusively to enjoy the unlawful advantage, and
that their intent in what they did was to monopolize the commerce
and to prevent competition, and in view of the general allegation
to which we Page 196 U. S. 395 shall refer, we think that we have stated correctly the purport
of the bill. It will be noticed further that the intent to
monopolize is alleged for the first time in the eighth section of
the bill as to raising, lowering and fixing prices. In the earlier
sections, the intent alleged is to restrain competition among
themselves. But after all the specific charges, there is a general
allegation that the defendants are conspiring with one another, the
railroads and others, to monopolize the supply and distribution of
fresh meats throughout the United States, etc., as has been stated
above, and it seems to us that this general allegation of intent
colors and applies to all the specific charges of the bill.
Whatever may be thought concerning the proper construction of the
statute, a bill in equity is not to be read and construed as an
indictment would have been read and construed a hundred years ago,
but it is to be taken to mean what it fairly conveys to a
dispassionate reader by a fairly exact use of English speech. Thus,
read, this bill seems to us intended to allege successive elements
of a single connected scheme.

															We read the demurrer with the same liberality. Therefore, we
take it as applying to the bill generally for multifariousness and
want of equity, and also to each section of it which makes a charge
and to the discovery. The demurrer to the discovery will not need
discussion in the view which we take concerning the relief, and
therefore we turn at once to that.

															The general objection is urged that the bill does not set forth
sufficient definite or specific facts. This objection is serious,
but it seems to us inherent in the nature of the case. The scheme
alleged is so vast that it presents a new problem in pleading. If,
as we must assume, the scheme is entertained, it is, of course,
contrary to the very words of the statute. Its size makes the
violation of the law more conspicuous, and yet the same thing makes
it impossible to fasten the principal fact to a certain time and
place. The elements, too, are so numerous and shifting, even the
constituent parts alleged are, and from their nature must be, so
extensive in time Page 196 U. S. 396 and space, that something of the same impossibility applies to
them. The law has been upheld, and therefore we are bound to
enforce it notwithstanding these difficulties. On the other hand,
we equally are bound by the first principles of justice not to
sanction a decree so vague as to put the whole conduct of the
defendants' business at the peril of a summons for contempt. We
cannot issue a general injunction against all possible breaches of
the law. We must steer between these opposite difficulties as best
we can.

															The scheme as a whole seems to us to be within reach of the law.
The constituent elements, as we have stated them, are enough to
give to the scheme a body and, for all that we can say, to
accomplish it. Moreover, whatever we may think of them separately
when we take them up as distinct charges, they are alleged
sufficiently as elements of the scheme. It is suggested that the
several acts charged are lawful, and that intent can make no
difference. But they are bound together as the parts of a single
plan. The plan may make the parts unlawful. Aikens v.
Wisconsin, 195 U. S. 194 , 195 U. S. 206 .
The statute gives this proceeding against combinations in restraint
of commerce among the States and against attempts to monopolize the
same. Intent is almost essential to such a combination, and is
essential to such an attempt. Where acts are not sufficient in
themselves to produce a result which the law seeks to prevent --
for instance, the monopoly -- but require further acts in addition
to the mere forces of nature to bring that result to pass, an
intent to bring it to pass is necessary in order to produce a
dangerous probability that it will happen. Commonwealth v.
Peaslee, 177 Massachusetts 267, 272. But 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. What we have said disposes incidentally of the objection to
the bill as multifarious. The unity of the plan embraces all the
parts.

															One further observation should be made. Although the Page 196 U. S. 397 combination alleged embraces restraint and monopoly of trade
within a single State, its effect upon commerce among the States is
not accidental, secondary, remote or merely probable. On the
allegations of the bill, the latter commerce no less, perhaps even
more, than commerce within a single State is an object of attack. See Leloup v. Port of Mobile, 127 U.
S. 640 , 127 U. S. 647 ; Crutcher v. Kentucky, 141 U. S. 47 , 141 U. S. 59 ; Allen v. Pullman Co., 191 U. S. 171 , 191 U. S. 179 , 191 U. S. 180 .
Moreover, it is a direct object, it is that for the sake of which
the several specific acts and courses of conduct are done and
adopted. Therefore the case is not like United States v. E. C.
Knight Co., 156 U. S. 1 , where
the subject matter of the combination was manufacture and the
direct object monopoly of manufacture within a State. However
likely monopoly of commerce among the States in the article
manufactured was to follow from the agreement, it was not a
necessary consequence nor a primary end. Here, the subject matter
is sales, and the very point of the combination is to restrain and
monopolize commerce among the States in respect of such sales. The
two cases are near to each other, as sooner or later always must
happen where lines are to be drawn, but the line between them is
distinct. Montague & Co. v. Lowry, 193 U. S.
38 .

															So, again, the line is distinct between this case and Hopkins v. United States, 171 U.
S. 578 . All that was decided there was that the local
business of commission merchants was not commerce among the States,
even if what the brokers were employed to sell was an object of
such commerce. The brokers were not like the defendants before us,
themselves the buyers and sellers. They only furnished certain
facilities for the sales. Therefore, there again the effects of the
combination of brokers upon the commerce was only indirect, and not
within the act. Whether the case would have been different if the
combination had resulted in exorbitant charges was left open. In Anderson v. United States, 171 U.
S. 604 , the defendants were buyers and sellers at the
stockyards, but their agreement was merely not to employ brokers,
or to Page 196 U. S. 398 recognize yard-traders, who were not members of their
association. Any yard-trader could become a member of the
association on complying with the conditions, and there was said to
be no feature of monopoly in the case. It was held that the
combination did not directly regulate commerce between the States,
and, being formed with a different intent, was not within the act.
The present case is more like Montague & Co. v. Lowry, 193 U. S. 38 .

															For the foregoing reasons we are of opinion that the carrying
out of the scheme alleged, by the means set forth, properly may be
enjoined, and that the bill cannot be dismissed.

															So far, it has not been necessary to consider whether the facts
charged in any single paragraph constitute commerce among the
States or show an interference with it. There can be no doubt, we
apprehend, as to the collective effect of all the facts, if true,
and if the defendants entertain the intent alleged. We pass now to
the particulars, and will consider the corresponding parts of the
injunction at the same time. The first question arises on the sixth
section. That charges a combination of independent dealers to
restrict the competition of their agents when purchasing stock for
them in the stockyards. The purchasers and their slaughtering
establishments are largely in different States from those of the
stockyards, and the sellers of the cattle, perhaps it is not too
much to assume, largely in different States from either. The intent
of the combination is not merely to restrict competition among the
parties, but, as we have said, by force of the general allegation
at the end of the bill, to aid in an attempt to monopolize commerce
among the States.

															It is said that this charge is too vague, and that it does not
set forth a case of commerce among the States. Taking up the latter
objection first, commerce among the States is not a technical legal
conception, but a practical one, drawn from the course of business.
When cattle are sent for sale from a place in one State, with the
expectation that they will end their transit, after purchase, in
another, and when, in effect, Page 196 U. S. 399 they do so, with only the interruption necessary to find a
purchaser at the stockyards, and when this is a typical, constantly
recurring course, the current thus existing is a current of
commerce among the States, and the purchase of the cattle is a part
and incident of such commerce. What we say is true at least of such
a purchase by residents in another State from that of the seller
and of the cattle. And we need not trouble ourselves at this time
as to whether the statute could be escaped by any arrangement as to
the place where the sale, in point of law, is consummated. See
Norfolk & Western Ry. v. Sims, 191 U.
S. 441 . But the sixth section of the bill charges an
interference with such sales, a restraint of the parties by mutual
contract and a combination not to compete in order to monopolize.
It is immaterial if the section also embraces domestic
transactions.

															It should be added that the cattle in the stockyard are not at
rest even to the extent that was held sufficient to warrant
taxation in American Steel & Wire Co. v. Speed, 192 U. S. 500 . But
it may be that the question of taxation does not depend upon
whether the article taxed may or may not be said to be in the
course of commerce between the States, but depends upon whether the
tax so far affects that commerce as to amount to a regulation of
it. The injunction against taking part in a combination, the effect
of which will be a restraint of trade among the States by directing
the defendants' agents to refrain from bidding against one another
at the sales of livestock, is justified so far as the subject
matter is concerned.

															The injunction, however, refers not to trade among the States in
cattle, concerning which there can be no question of original
packages, but to trade in fresh meats, as the trade forbidden to be
restrained, and it is objected that the trade in fresh meats
described in the second and third sections of the bill is not
commerce among the States, because the meat is sold at the
slaughtering places, or, when sold elsewhere, may be sold in less
than the original packages. But the allegations of the second
section, even if they import a technical passing Page 196 U. S. 400 of title at the slaughtering places, also import that the sales
are to persons in other States, and that the shipments to other
States are part of the transaction -- "pursuant to such sales" --
and the third section imports that the same things which are sent
to agents are sold by them, and sufficiently indicates that some,
at least, of the sales are of the original packages. Moreover, the
sales are by persons in one State to persons in another. But we do
not mean to imply that the rule which marks the point at which
state taxation or regulation becomes permissible necessarily is
beyond the scope of interference by Congress in cases where such
interference is deemed necessary for the protection of commerce
among the States. Nor do we mean to intimate that the statute under
consideration is limited to that point. Beyond what we have said
above, we leave those questions as we find them. They were touched
upon in the Northern Securities Company's case, 193 U. S. 197 .

															We are of opinion, further, that the charge in the sixth section
is not too vague. The charge is not of a single agreement, but of a
course of conduct intended to be continued. Under the act, it is
the duty of the court, when applied to, to stop the conduct. The
thing done and intended to be done is perfectly definite: with the
purpose mentioned, directing the defendants' agents and inducing
each other to refrain from competition in bids. The defendants
cannot be ordered to compete, but they properly can be forbidden to
give directions or to make agreements not to compete. See
Addyston Pipe & Steel Co. v. United States, 175 U.
S. 211 . The injunction follows the charge. No objection
was made on the ground that it is not confined to the places
specified in the bill. It seems to us, however, that it ought to
set forth more exactly the transactions in which such directions
and agreements are forbidden. The trade in fresh meat referred to
should be defined somewhat as it is in the bill, and the sales of
stock should be confined to sales of stock at the stockyards named,
which stock is sent from other States to the stockyards for sale or
is bought at those yards for transport to another State. Page 196 U. S. 401 After what we have said, the seventh, eighth and ninth sections
need no special remark except that the cartage referred to in
section nine is not an independent matter, such as was dealt with
in Pennsylvania R.R. Co. v. Knight, 192 U. S.
21 , but a part of the contemplated transit -- cartage
for delivery of the goods. The general words of the injunction "or
by any other method or device, the purpose and effect of which is
to restrain commerce as aforesaid," should be stricken out. The
defendants ought to be informed as accurately as the case permits
what they are forbidden to do. Specific devices are mentioned in
the bill, and they stand prohibited. The words quoted are a
sweeping injunction to obey the law, and are open to the objection
which we stated at the beginning that it was our duty to avoid. To
the same end of definiteness, so far as attainable, the words "as
charged in the bill," should be inserted between "dealers in such
meats," and "the effect of which rules," and two lines lower, as to
charges for cartage, the same words should be inserted between
"dealers and consumers" and "the effect of which."

															The acts charged in the tenth section, apart from the
combination and the intent, may, perhaps, not necessarily be
unlawful, except for the adjective which proclaims them so. At
least we may assume, for purposes of decision, that they are not
unlawful. The defendants, severally, lawfully may obtain less than
the regular rates for transportation if the circumstances are not
substantially similar to those for which the regular rates are
fixed. Act of Feb. 4, 1887, c. 104, § 2, 24 Stat. 379. It may be
that the regular rates are fixed for carriage in cars furnished by
the railroad companies, and that the defendants furnish their own
cars and other necessities of transportation. We see nothing to
hinder them from combining to that end. We agree, as we already
have said, that such a combination may be unlawful as part of the
general scheme set forth in the bill, and that this scheme, as a
whole, might be enjoined. Whether this particular combination can
be enjoined, as it is, apart from its connection with the other Page 196 U. S. 402 elements, if entered into with the intent to monopolize, as
alleged, is a more delicate question. The question is how it would
stand if the tenth section were the whole bill. Not every act that
may be done with intent to produce an unlawful result is unlawful,
or constitutes an attempt. It is a question of proximity and
degree. The distinction between mere preparation and attempt is
well known in the criminal law. Commonwealth v. Peaslee, 177 Massachusetts 267, 272. The same distinction is recognized in
cases like the present. United States v. E. C. Knight Co., 156 U. S. 1 , 156 U. S. 13 ; Kidd v. Pearson, 128 U. S. 1 , 128 U. S. 23 , 128 U. S. 24 . We
are of opinion, however, that such a combination is within the
meaning of the statute. It is obvious that no more powerful
instrument of monopoly could be used than an advantage in the cost
of transportation. And even if the advantage is one which the act
of 1887 permits, which is denied, perhaps inadequately, by the
adjective "unlawful," still a combination to use it for the purpose
prohibited by the act of 1890 justifies the adjective and takes the
permission away.

															It only remains to add that the foregoing question does not
apply to the earlier sections, which charge direct restraints of
trade within the decisions of the court, and that the criticism of
the decree, as if it ran generally against combinations in
restraint of trade or to monopolize trade, ceases to have any force
when the clause against "any other method or device" is stricken
out. So modified, it restrains such combinations only to the extent
of certain specified devices, which the defendants are alleged to
have used and intend to continue to use Decree modified and affirmed. *

															"And now, upon motion of the said attorney, the court doth order
that the preliminary injunction heretofore awarded in this cause,
to restrain the said defendants and each of them, their respective
agents and attorneys, and all other persons acting in their behalf,
or in behalf of either of them, or claiming so to act, from
entering into, taking part in, or performing any contract,
combination or conspiracy, the purpose or effect of which will be,
as to trade and commerce in fresh meats between the several States
and Territories and the District of Columbia, a restraint of trade,
in violation of the provisions of the act of Congress approved July
2, 1890, entitled 'An act to protect trade and commerce against
unlawful restraints and monopolies,' either by directing or
requiring their respective agents to refrain from bidding against
each other in the purchase of livestock; or collusively and by
agreement to refrain from bidding against each other at the sales
of livestock; or by combination, conspiracy or contract raising or
lowering prices or fixing uniform prices at which the said meats
will be sold, either directly or through their respective agents;
or by curtailing the quantity of such meats shipped to such markets
and agents; or by establishing and maintaining rules for the giving
of credit to dealers in such meats, the effect of which rules will
be to restrict competition; or by imposing uniform charges for
cartage and delivery of such meats to dealers and consumers, the
effect of which will be to restrict competition; or by any other
method or device, the purpose and effect of which is to restrain
commerce as aforesaid, and also from violating the provisions of
the act of Congress approved July 2, 1890, entitled 'An act to
protect trade and commerce against unlawful restraints and
monopolies' by combining or conspiring together, or with each other
and others, to monopolize or attempt to monopolize any part of the
trade and commerce in fresh meats among the several States and
Territories and the District of Columbia, by demanding, obtaining,
or, with or without the connivance of the officers or agents
thereof, or of any of them, receiving from railroad companies or
other common carriers transporting such fresh meats in such trade
and commerce, either directly or by means of rebates, or by any
other device, transportation of or for such means, from the points
of the preparation and production of the same from livestock or
elsewhere, to the markets for the sale of the same to dealers and
consumers in other States and Territories than those wherein the
same are so prepared, or the District of Columbia, at less than the
regular rates which may be established or in force on their several
lines of transportation, under the provisions in that behalf of the
laws of the said United States for the regulation of commerce, be
and the same is hereby made perpetual."

															"But nothing herein shall be construed to prohibit the said
defendants from agreeing upon charges for cartage and delivery, and
other incidents connected with local sales, where such charges are
not calculated to have any effect upon competition in the sales and
delivery of meats; nor from establishing and maintaining rules for
the giving of credit to dealers where such rules in good faith are
calculated solely to protect the defendants against dishonest or
irresponsible dealers, nor from curtailing the quantity of meats
shipped to a given market where the purpose of such arrangement in
good faith is to prevent the over-accumulation of meats as
perishable articles in such markets."

															"Nor shall anything herein contained be construed to restrain or
interfere with the action of any single company or firm, by its or
their officers or agents (whether such officers or agents are
themselves personally made parties defendant hereto or not) acting
with respect to its or their own corporate or firm business,
property or affairs."

Summary:
In *Swift & Co. v. United States* (1905), the Supreme Court ruled that a combination of meat dealers restraining trade and attempting to monopolize interstate commerce was illegal under the Sherman Antitrust Act of 1890. The Court held that the combination's effect on interstate commerce was direct and substantial, and thus fell under federal jurisdiction. Even if individual elements of the scheme were legal, when combined with an intent to monopolize, they became part of an unlawful plan.

The Court also clarified that the purchase and sale of cattle across state lines constituted interstate commerce, and that the bill of equity and demurrer should be interpreted fairly, rather than strictly as an indictment.

The decree enjoined the defendants from engaging in various practices that restrained trade, such as agreeing on prices, curtailing shipments, and obtaining preferential transportation rates. However, it allowed for certain exceptions, such as cartage charges and credit rules, when they were not designed to restrict competition.