Omaha daily bee., 1899-12-05
KNOCK OUT GAS PIPE TRUST
Combinations Of Manufacturers Are Declared
Unconstitutional.
DECISION GIVEN BY JUDGE PECKHAN
six Corporations Are Enjoincd from
Doing Business Under an Agree
mcnt 10 divide Territory
and Fix Prices.

and Fix Prices.
WASHINGTON, Dec Am the United
States supreme court today the Addystone
pipe case was decided. This case involved
the consttutionality of the combination Of
pipe manufacturers to manufacture pipe,
which it was charged was trust
The decision was handed down by Justice
Peckham and was adverse TO the combina-
tion.
The opinion OF the court of appeals for
the sixth circuit was affirmed.
In reviewing the case Justice Peckham
said that 1t had been brought under the anti
trust act OF 1890, and that an injunction was
asked to enjoin the six corporations engaged
In the manufacture of water and gas pipe,
which composed the combination, from con-
tinuing to do business under the agreement
under which they had divided the territory
OF the United States among themselves ana
by which they had arranged to fix prices
Under this agreement the members of the
combination provided for auctioning off the
right to make bids for supplying with pipe
cities not in allotted territory. the success
full bidder to meet no opposition from other
members of the trust, or If other bids were
made none of them should be lower than
that of the company to which the award had
been made by the combination. In cases in
which bids were asked in territory allotted
to members OF the combination the agree
ment was that no bids should be made, ex-
cept under the supervision of the company
in charge of that territory under the agree
ment.
The charge was that such a combination
was violation of the clause of the law reg
ulatng interstate commerce. The district
court in which the case was first heard re-
fused to take this view of it, but it was re-
versed by the court of appeals of the Sixth
circuit, which held the combine to be an
tagonistic to the constitution, ordering the
issuance of the injunction prayed for This
latter decision was affirmed by the action of
the supreme court, with a modification that
the decision should be construed as applying
to interstate business only.
Two Questions Before Court.
There were two questions before the court
in connection with the case. The first was
whether the constitutional clause for the
regulation of interstate commerce applied to
individuals and to corporations, and the Sec
ond whether, if the clause should be found
to apply. the combination is regulation of
interstate commerce.
The court held that the constitutional
clause did apply to individuals and corpora
tions and that the agreement does by its
provisions restrict and restrain commerce
between the states. Hence the agreement
was decided to be void as applying to inter-
state business and the injunction sustained.
The six companies composing the combi-
nation affected were the Addystone Pipe and
Steel company of Cincinnati, Dennis, Long
& Co. of Louisville, the Howard Harrison
Iron company of Bessemer, Ala, the Annis-
ton Pipe and Foundry company of Anniston,
Ala, the South Pittsburg Pipe Works Of
South Pittsburg, Tenn, and the Chattanooga
Foundry and Pipe Works of Chattanooga,
Tenn. Their agreement provided that there
should be no competition between the COM
panies in the manufacture and sale of cast
iron pipe.
The case was brought first and tried in
the circuit court for the Eastern district of
Tennessee. Passing upon the objection that
the constitutional provision could not be held
applicable to individuals, Justice Peckham
said
1--WE conclude that the plain language of
the grant to congress of power to regulate
commerce among the several states includes
power to 1egsate upon the subject of these
contracts in respect to interstate or foreign
commerce, which directly offset and regu-
late that commerce, and we can find no reas-
enable ground for asserting that the provl
sion as to the liberty of the individual limits
the order of that power as claimed by the
appellates. We, therefore, think the appel
lates have failed in their contention upon
this branch of the subject"
Further, the opinion held that "the di-
rect and immediate result of the combna-
tion was necessarily restraint upon inter-
state commerce, in respect to articles manu-
factured by the parties to be transported
beyond the state in which they were made.
The defendants by reason of this agreement
could only send their goods out OF the state
upon the terms and pursuant to the pro-
visions of ouch combination. Was not this
a direct restraint upon interstate commerce
in these goods? If dealers in any COM
modify decide among themselves that any
particular territory bounded by state lines
should be furnished with such commodity
by certain members only of the combina-
tion and the others would abstain from
business in that territory, would not such
an agreement be regarded as one in restraint
of interstate trade? If the price of the
commodity was thereby enhanced (as it
necessarily would be- the character of the
agreement would be still more clearly in
restraint of trade.
1T is useless for the defendants to say
they did not intend to regulate or affect
interstate commerce. They intended to make
the very combination and agreement which
they in fact did make and they must be
held to have intended the necessary and
direct result of their agreement"
Restraint of Trnde.
Remarkng upon the general aspect OF the
case Justice Peckham said
1--WE have no doubt that where the direct
and immediate effect of a contract or COM
bnation among particular dealers in a COM
modify is to destroy competition between
them and others, and that the parties to
the contract or combination may obtain in-
creased prices for themselves such contract
or combination amounts to restraint of
trade in the commodity, even though con-
tracts to buy such commodity at the en-