Source: https://www.law.cornell.edu/supremecourt/text/234/600/
Timestamp: 2019-04-18 18:34:29+00:00

Document:
Argued October 24 and 27, 1913.
Mr. Alfred B. Cruikshank for appellants in No. 511.
Messrs Howard Taylor, Charles E. Morgan, C. E. Morgan, 3d, and Charles B. Brophy for appellants in No. 550.
Mr. G. Carroll Todd, assistant to the Attorney General, for appellee.
Statement to Members (with the Date).
You are reminded that it is because you are members of our Association and have an interest in common with your fellow members in the information contained in this statement, that they communicate it to you; and that they communicate to you in strictest confidence, and with the understanding that you are to receive it and treat it in the same way.
The number and initials of car.
The name of consumer to whom the car is consigned.
The initials or name of shipper.
The date of arrival of car.
and the defendants were enjoined from combining, conspiring, or agreeing together to distribute, and from distributing, to members of the associations named or any other person or persons, any information showing soliciting, quotations, or sales and shipments of lumber and lumber products from manufacturers and wholesalers to consumers of or dealers in lumber, and from the preparation and distribution of the lists above described as the 'Official Report,' or the use of a similar device.
The record discloses that the defendant associations are constituted alrgely of retail lumber dealers, each of whom has the natural desire to control his local trade, which the retailers contend have been unduly interfered with by the wholesalers in selling to consumers within the local territory in such wise as to conflict with what they regard as a strictly local trade, and it appears that the defendant associations have for their object, among other things, the adoption of ways and means to protect such trade and to prevent the wholesale dealers from intruding therein. The particular thing which this case concerns in the retailers' efforts to promote the end in view is the attempt in the manner shown, by the circulation of the reports in question, to keep the wholesalers from selling directly to the local trade. The trade of the wholesalers involved covers a number of states, and there is no question but that the supplying of lumber to the large numbers of retailers in these associations in different states is interstate trade, and that if the practices are illegal within the Sherman act they may be reached by this proceeding. Swift & Co. v. United States, 196 U. S. 375, 49 L. ed. 518, 25 Sup. Ct. Rep. 276; Loewe v. Lawlor, 208 U. S. 274, 300, 52 L. ed. 488, 501, 28 Sup. Ct. Rep. 301, 13 Ann. Cas. 815.
In other words, the circulation of such information among the hundreds of retailers as to the alleged delinquency of a wholesaler with one of their number had and was intended to have the natural effect of causing such retailers to withhold their patronage from the concern listed.
And see W. W. Montague & Co. v. Lowry, 193 U. S. 38, 48 L. ed. 608, 24 Sup. Ct. Rep. 307.
These principles are applicable to this situation. Here are wholesale dealers in large number engaged in interstate trade upon whom it is proposed to impose as a condition of carrying on that trade that they shall not sell in such manner that a local retail dealer may regard such sale as an infringement of his exclusive right to trade, upon pain of being reported as an unfair dealer to a large number of other retail dealers associated with the offended dealer, the purpose being to keep the wholesaler from dealing not only with the particular dealer who reports him, but with all others of the class who may be informed of his delinquency. 'Section 1 of the act . . . is not confined to voluntary restraints, as where persons engaged in interstate trade or commerce agree to suppress competition among themselves, but includes as well involuntary restraints, as where persons not so engaged conspire to compel action by others, or to create artificial conditions, which necessarily impede or burden the due course of such trade or commerce, or restrict the common liberty to engage therein.' United States v. Patten, 226 U. S. 541, 57 L. ed. 341, 44 L.R.A(N.S.) 325, 33 Sup. Ct. Rep. 141. This record abounds in instances where the offending dealer was thus reported, the hoped-for effect, unless he discontinued the offending practice, realized, and his trade directly and appreciably impaired.
But it is said that in order to show a combination or conspiracy within the Sherman act some agreement must be shown under which the concerted action is taken. It is elementary, however, that conspiracies are seldom capable of proof by direct testimony, and may be inferred from the things actually done; and when, in this case, by concerted action the names of wholesalers who were reported as having made sales to consumers were periodically reported to the other members of the associations, the conspiracy to accomplish that which was the natural consequence of such action may be readily inferred.
The circulation of these reports not only tends to directly restrain the freedom of commerce by preventing the listed dealers from entering into competition with retailers, as was held by the district court, but it directly tends to prevent other retailers who have no personal grievance against him, and with whom he might trade, from so doing, they being deterred solely because of the influence of the report circulated among the members of the associations. In other words, the trade of the wholesaler with strangers was directly affected, not because of any supposed wrong which he had done to them, but because of the grievance of a member of one of the associations, who had reported a wrong to himself, which grievance, when brought to the attention of others, it was hoped would deter them from dealing with the offending party. This practice takes the case out of those normal and usual agreements in aid of trade and commerce which may be found not to be within the act, and puts it within the prohibited class of undue and unreasonable restraints, such as was the particular subject of condemnation in Loewe v. Lawlor, 208 U. S. 274, 300, 52 L. ed. 488, 501, 28 Sup. Ct. Rep. 301, 13 Ann. Cas. 815.
The argument that the course pursued is necessary to the protection of the retail trade and promotive of the public welfare in providing retail facilities is answered by the fact that Congress, with the right to control the field of interstate commerce, has so legislated as to prevent resort to practices which unduly restrain competition or unduly obstruct the free flow of such commerce, and private choice of means must yield to the national authority thus exerted. Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 241, 242, 44 L. ed. 136, 147, 148, 20 Sup. Ct. Rep. 96.
'There is no evidence that these defendants have in any manner other than by the rules above mentioned hindered or impeded others in shipping, trading, or selling their stock, or that they have in any way interfered with the freedom of access to the stokc yards of any and all other traders and purchasers, or hindered their obtaining the same facilities which were therein afforded by the stock yards company to the show that the above results have flowed we think the evidence does not tend to show that the above results have followed from the adoption and enforcement of the rules and rugulations referred to.' As distinguished from this situation the present case shows that the trade of the listed wholesalers is hindered or impeded; that competition is suppressed and the natural flow of commerce interfered with as the direct result of the circulation of the official reports in the manner stated. The case is quite different from the Anderson Case. And see W. W. Montague & Co. v. Lowry, 193 U. S. 48, 48 L. ed. 612, 24 Sup. Ct. Rep. 307.
When the retailer goes beyond his personal right, and, conspiring and combining with others of like purpose, seeks to obstruct the free course of interstate trade and commerce and to unduly suppress competition by placing obnoxious wholesale dealers under the coercive influence of a condemnatory report circulated among others, actual or possible customers of the offenders, he exceeds his lawful rights, and such action brings him and those acting with him within the condemnation of the act of Congress and the District Court was right in so holding. It follows that its decree must be affirmed.

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