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Timestamp: 2019-04-21 06:13:08+00:00

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1. Under the Packers and Stockyards Act of 1921, c. 64, § 316, 42 Stat. 159, an order of the district court refusing a temporary injunction in a suit to enjoin the enforcement of orders made under the act by the Secretary of Agriculture, is appealable directly to this Court. P. 258 U. S. 512.
2. It is for Congress to decide from its general information and from the special evidence brought before it the nature of evils, present or threatening, and to enact such legislation within its power as it deems necessary to remedy them, and this environment should be considered by the courts in interpreting the scope and effect of the act in order to determine its validity. P. 258 U. S. 513.
3. Commerce among the states is not a technical legal conception but a practical one, drawn from the course of business. P. 258 U. S. 518. Swift & Co. v. United States, 196 U. S. 375.
4. Streams of commerce among the states are under the national protection and regulation, including subordinate activities and facilities which are essential to such movements, though not of interstate character when viewed apart from them. P. 258 U. S. 519.
5. Such a current of interstate commerce is found in the uninterrupted movement of livestock from the West and Southwest into the great stockyards at Chicago and elsewhere, where it is sold by the consignee commission merchants to packers and livestock dealers at the stockyards, and in the movement thence into other states of the meat and other products of the animals slaughtered at the packing establishments and the live animals which are resold at the yards by the dealers for further feeding and fattening. P. 258 U. S. 514.
6. The commission merchants who receive the livestock as consignees of the shippers and sell it to the packers and dealers at the stockyards, and the dealers in reselling there to stock farmers and feeders, are essential factors in this interstate movement; their sales, though local transactions in that they create a local change of title, do not interrupt the current but, on the contrary, are indispensable to its continuity. P. 258 U. S. 516.
7. For the purpose of protecting this interstate commerce from the power of the packers to fix arbitrary prices for livestock and meat, through their monopoly, aided, as was thought, by their control of stockyards, and from exorbitant charges, duplication of commissions, and other deceptive practices in respect of prices, in the passage of livestock through the stockyards, made possible by collusion between the stockyards management and the commission men, on the one hand, and the packers and dealers, on the other, Congress, in connection with regulation of the packers, had power to regulate business done in the stockyards. P. 258 U. S. 514.
8. A reasonable fear upon the part of Congress that acts, usually lawful and affecting only intrastate commerce when occurring alone, will probably and more or less constantly be performed in aid of conspiracies against interstate commerce or constitute a direct and undue burden upon it, serves to bring such acts within the current of interstate commerce for federal restraint. P. 258 U. S. 520.
9. It is primarily for Congress to consider and decide the danger of such acts or practices, and to meet it, and it is not for this Court to substitute its judgment in such a matter unless the relation of the subject to interstate commerce and its effect upon it are clearly nonexistent. P. 258 U. S. 521.
not objectionable from the standpoint of the commission men and dealers upon the ground that their business is merely intrastate, but is within the power of Congress under the Commerce Clause. P. 258 U. S. 513.
These cases involve the constitutionality of the Packers and Stockyards Act of 1921, approved August 15, 1921, so far as that act provides for the supervision by federal authority of the business of the commission men and of the livestock dealers in the great stockyards of the country. They are appeals from the orders of the District Court for the Northern District of Illinois refusing to grant interlocutory injunctions as prayed. The bills sought to restrain enforcement of orders of the Secretary of Agriculture in carrying out the act, directed against the appellants in No. 687, as the commission men in the Union Stockyards of Chicago, and against the appellants in No. 691, as dealers in the same yards. The ground upon which the prayers for relief are based is that the Secretary's orders are void because made under an act invalid as to each class of appellants. The bill in No. 687 makes defendants the Secretary of Agriculture and the United States attorney for the Northern District of Illinois, averring that the latter is charged with the duty of enforcing the severe penalties imposed by the act for failure to comply with orders of the Secretary thereunder. The bill in No. 691 makes the United States attorney the only defendant, with the same averment.
the yards are in carload or trainload lots, and a substantial part are not graded or conditioned to meet the specific requirements of the buyers; that the dealers, after purchase, put the livestock in pens assigned to them by the stockyards owner and do the sorting and classification; that the dealers buy in open market in competition with each other; that they pay the expense of the custody, care, and feeding and watering the stock while they hold them; that they sell promptly, and have nothing to do with the shipment of the livestock they sell from the yards to points outside.
In the bill in No. 691, the appellants aver that they are members of the Chicago Live Stock Exchange and of the National Live Stock Exchange, the members of which are dealers in all the stockyards of the country, numbering 2,000, and that they bring their bill for all of them who may choose to join and take the benefit of the litigation.
The chairman of the Committee of Agriculture, in reporting to the House of Representatives the bill which became the act here in question (May 18, 1921, 67th Congress, 1st Session, Report No. 77, to accompany H.R. 6320), referred to the testimony printed in the House Committee Hearings of the 66th Congress, 2d Session, Committee on Agriculture, vols. 220-2 and 220-3, as furnishing the contemporaneous history and information of the evils to be remedied upon which the bill was framed.
"The big packers' control of these markets is much greater than these statistics indicate. In the first place, they are the largest and in some cases practically the only buyers at these various markets, and as such hold a whip hand over the commission men who act as the intermediaries in the sale of livestock."
stockyards give these interests access to records containing confidential shipping information, which is used to the disadvantage of shippers who have attempted to forward their livestock to a second market."
Summary of Report of the Federal Trade Commission on Meat-Packing Industry, July 3, 1918.
Following the report of the Federal Trade Commission, and before the passage of this act, a bill in equity for injunction was filed in 1920, in the Supreme Court of the District of Columbia, in which, on February 27th of that year, was entered a decree against the same Big Five packers, consented to by them, with the saving clause that it should not be considered as an admission that they had been guilty of violations of law. The decree enjoined the packers from doing many acts in pursuance of a combination to monopolize the purchase and control the price of livestock, and the sale and distribution of meat products and of many byproducts in preparation of meats and in unrelated lines, not here relevant, and from continuing to own or control, directly or indirectly, any interest in any public stockyard market company in the United States, or in any stockyard market journal, or in any stockyard terminal railroad or in any public cold storage warehouse. House Committee Hearings, Committee on Agriculture, 1920, vol. 220-2, p. 720, "Meat Packer Legislation."
the butcher cattle, they handled 20 percent, of the beef cattle, 10 percent, and of "the stockers and feeders," 80 percent. At Kansas City, this last figure was higher, reaching 95 percent. Committee Hearings, p. 2140.
It was conceded that, of all the livestock coming into the Chicago stockyards and going out, only a small percentage, less than 10 percent, is shipped from or to Illinois.
and if it was a fact, as to the cause of the crippling. Pages 22-24; also 466 et seq., 1086; 2125, 2244, et seq. Committee of House Hearings, Committee of Agriculture, vol. 220-2, 66th Congress,2d Session.
MR. CHIEF JUSTICE TAFT, after making the foregoing statement of the case, delivered the opinion of the Court.
Section 316 of the Packers and Stockyards Act of 1921 makes applicable to suits for injunction against the orders of the Secretary of Agriculture the same procedure, original and appellate, provided in the Act of October 22, 1913, c. 32, 38 Stat. 208, 219, 220, for suits for injunction against the orders of the Interstate Commerce Commission. The latter act gives a right to a direct appeal to this Court from the granting or refusing an interlocutory injunction. Hence, the appeals herein are properly prosecuted.
In each bill the averments are sufficient, if the act be invalid, to show equitable grounds for injunction in the severe penalties incurred for failure to comply with the act before opportunity can be given to test its validity. Ex parte Young, 209 U. S. 123.
in which Congress passed it. It was for Congress to decide from its general information and from such special evidence as was brought before it, the nature of the evils actually present or threatening, and to take such steps by legislation within its power as it deemed proper to remedy them. It is helpful for us in interpreting the effect and scope of the act in order to determine its validity to know the conditions under which Congress acted. Chicago Board of Trade v. United States, 246 U. S. 231, 246 U. S. 238; Danciger v. Cooley, 248 U. S. 319, 248 U. S. 322.
connection with the livestock passing through the yards shall be just, reasonable, nondiscriminatory, and nondeceptive, and that a schedule of such charges shall be kept open for public inspection, and only be changed after ten days' notice to the Secretary of Agriculture, who is made a tribunal to inquire as to the justice, reasonableness, and nondiscriminatory or nondeceptive character of every charge and practice, and to order that it cease, if found to offend, with the same provisions for appeal and enforcement in court as in the case of offending packers. The Secretary is given power to make rules and regulations to carry out the provisions, to fix rates, or a minimum or maximum thereof, and to prescribe how every packer, stockyard owner, commission man, and dealer shall keep accounts.
The bills aver that the Secretary has given the notice which requires appellants to register, and has announced proposed rules and regulations, prescribing the form of rate schedules, the required reports, including daily accounts of receipts, sales, and shipments, forbidding misleading reports to depress or enhance prices, prescribing proper feed and care of livestock, and forbidding a commission man to sell livestock to another in whose business he is interested, without disclosing such interest to his principal.
The object to be secured by the act is the free and unburdened flow of livestock from the ranges and farms of the West and the Southwest through the great stockyards and slaughtering centers on the borders of that region, and thence in the form of meat products to the consuming cities of the country in the Middle West and East, or, still, as livestock, to the feeding places and fattening farms in the Middle West or East for further preparation for the market.
the shipper, who sells, and unduly and arbitrarily to increase the price to the consumer, who buys. Congress thought that the power to maintain this monopoly was aided by control of the stockyards. Another evil which it sought to provide against by the act was exorbitant charges, duplication of commissions, deceptive practices in respect of prices, in the passage of the livestock through the stockyards, all made possible by collusion between the stockyards management and the commission men, on the one hand, and the packers and dealers, on the other. Expenses incurred in the passage through the stockyards necessarily reduce the price received by the shipper, and increase the price to be paid by the consumer. If they be exorbitant or unreasonable, they are an undue burden on the commerce which the stockyards are intended to facilitate. Any unjust or deceptive practice or combination that unduly and directly enhances them is an unjust obstruction to that commerce. The shipper, whose livestock are being cared for and sold in the stockyards market, is ordinarily not present at the sale, but is far away in the West. He is wholly dependent on the commission men. The packers and their agents and the dealers, who are the buyers, are at the elbow of the commission men, and their relations are constant and close. The control that the packers have had in the stockyards by reason of ownership and constant use, the relation of landlord and tenant between the stockyards owner, on the one hand, and the commission men and the dealers, on the other, the power of assignment of pens and other facilities by that owner to commission men and dealers, all create a situation full of opportunity and temptation, to the prejudice of the absent shipper and owner in the neglect of the livestock, in the mala fides of the sale, in the exorbitant prices obtained, and in the unreasonableness of the charges for services rendered.
carload and trainload lots, and must be promptly sold and disposed of and moved out, to give place to the constantly flowing traffic that presses behind. The stockyards are but a throat through which the current flows, and the transactions which occur therein are only incident to this current from the West to the East, and from one state to another. Such transactions cannot be separated from the movement to which they contribute and necessarily take on its character. The commission men are essential in making the sales, without which the flow of the current would be obstructed, and this whether they are made to packers or dealers. The dealers are essential to the sales to the stock farmers and feeders. The sales are not in this aspect merely local transactions. They create a local change of title, it is true, but they do not stop the flow; they merely change the private interests in the subject of the current, not interfering with, but, on the contrary, being indispensable to, its continuity. The origin of the livestock is in the West; its ultimate destination, known to, and intended by, all engaged in the business, is in the Middle West and East, either as meat products or stock for feeding and fattening. This is the definite and well understood course of business. The stockyards and the sales are necessary factors in the middle of this current of commerce.
agency. United States v. Union Stock Yards Co., 226 U. S. 286. The only question here is whether the business done in the stockyards, between the receipt of the livestock in the yards and the shipment of them therefrom, is a part of interstate commerce or is so associated with it as to bring it within the power of national regulation. A similar question has been before this Court, and had great consideration in Swift v. United States, 196 U. S. 375. The judgment in that case gives a clear and comprehensive exposition, which leaves to us in this case little but the obvious application of the principles there declared.
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."
"Although the combination alleged embraces restraint and monopoly of trade within a single state, its effect upon commerce among the states is not accidental, secondary, remote, or merely probable. . . . Here, the subject matter is sales, and the very point of the combination is to restrain and monopolize commerce among the states in respect of such sales."
"Commerce among the states is not a technical legal conception, but a practical one, drawn from the course of business. When cattle are sent for sale from a place in one state, with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the 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. . . ."
central fact that such streams of commerce from one part of the country to another, which are ever flowing, are in their very essence the commerce among the states and with foreign nations, which historically it was one of the chief purposes of the Constitution to bring under national protection and control. This Court declined to defeat this purpose in respect of such a stream and take it out of complete national regulation by a nice and technical inquiry into the noninterstate character of some of its necessary incidents and facilities, when considered alone and without reference to their association with the movement of which they were an essential but subordinate part.
The principles of the Swift case have become a fixed rule of this Court in the construction and application of the commerce clause. It latest expression on the subject is found in Lemke v. Farmers' Grain Co., ante, 258 U. S. 50. In that case, it was held, on the authority of the Swift case, that the delivery and sale of wheat by farmers to local grain elevators in North Dakota, to be shipped to Minneapolis, when practically all the wheat purchased by such elevators was so shipped, and the price was fixed by that in the Minneapolis market, less profit and freight, constituted a course of business, and determined the interstate character of the transaction. Accordingly, a state statute which sought to regulate the price and profit of such sales and was found to interfere with the free flow of interstate commerce was declared invalid as a violation of the commerce clause. Similar confirmation of the principle of the Swift case is to be found in Dahnke v. Bondurant, 257 U. S. 282, in Eureka Pipe Line v. Hallanan, 257 U. S. 265, and in United Fuel Co. v. Hallanan, 257 U. S. 277; in Western Union Co. v. Foster, 247 U. S. 105, 247 U. S. 113; United States v.
Reading, 226 U. S. 324, 226 U. S. 367-368; Ohio R. Co. v. Worthington, 225 U. S. 101, 225 U. S. 108, and Loewe v.Lawlor, 208 U. S. 274, 208 U. S. 301.
It is manifest that Congress framed the Packers and Stockyards Act in keeping with the principles announced and applied in the opinion in the Swift case. The recital in § 2, par. b, of Title I of the act, quoted in the margin, leaves no doubt of this. [Footnote 1] The act deals with the same current of business, and the same practical conception of interstate commerce.
and more or less constantly be used in conspiracies against interstate commerce or constitute a direct and undue burden on it, expressed in this remedial legislation, serves the same purpose as the intent charged in the Swift indictment to bring acts of a similar character into the current of interstate commerce for federal restraint. Whatever amounts to more or less constant practice, and threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and meet it. This Court will certainly not substitute its judgment for that of Congress in such a matter unless the relation of the subject to interstate commerce and its effect upon it are clearly nonexistent.
commerce, come within the power of Congress to regulate, although they are not interstate commerce in and of themselves."
"The authority of Congress extends to every part of interstate commerce, and to every instrumentality and agency by which it is carried on, and the full control by Congress of the subjects committed to its regulation is not to be denied or thwarted by the commingling of interstate and intrastate operations. This is not to say that the nation may deal with the internal concerns of the state as such, but that the execution by Congress of its constitutional power to regulate interstate commerce is not limited by the fact that intrastate transactions may have become so interwoven therewith that the effective government of the former incidentally controls the latter. This conclusion necessarily results from the supremacy of the national power within its appointed sphere. "
In § 311 of the act, quoted in the margin, [Footnote 2] Congress gives to the Secretary of Agriculture, in respect to intrastate transactions that affect prejudicially interstate commerce under his protection, the same powers given to the Interstate Commerce Commission in respect to intrastate commerce which affects prejudicially interstate railroad commerce in paragraph 4, § 13, as amended in § 416 of the Transportation Act of 1920. This was the paragraph and section which were enforced in Railroad Commission v. Chicago, Burlington & Quincy Railroad Co., supra, and the validity of which was upheld by this Court.
Counsel for appellants cite cases to show that transactions like those of the commission men or dealers here are not interstate commerce or within the power of Congress to regulate. The chief of these are Hopkins v.
"So, again, the line is distinct between this case and Hopkins v. United States, 171 U. S. 578. All that was decided there was that the local business of commission merchants was not commerce among the states, even if what the brokers were employed to sell was an object of such commerce. The brokers were not like the defendants before us, themselves the buyers and sellers. They only furnish 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 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."
use and control of stockyards and the commission men to promote a packers' monopoly of interstate commerce. The act finds and imports this injurious direct effect of such agencies upon interstate commerce, just as the intent of the conspiracy charged in the indictment in the Swift case tied together the parts of the scheme there attacked and imported their direct effect upon interstate commerce.
Again, if the result of the combination of commission men in the Hopkins case had been to impose exorbitant charges on the passage of the livestock through the stockyards from one state to another, the case would have been different, as the Court suggests. The effect on interstate commerce in such a case would have been direct. Similarly, in the Anderson case, if the combination of dealers had been directed to collusion with the commission men to secure sales at unduly low prices to the dealers and to double commissions, or to practice any other fraud or oppression calculated to decrease the price received by the shipper and increase the price to the purchaser in the passage of livestock through the stockyards in interstate commerce, this would have been a direct burden on such commerce, and within the Anti-Trust Act.
"But we do not mean to imply that the rule which marks the point at which state taxation or regulation becomes permissible necessarily is beyond the scope of interference by Congress . . . where such interference is deemed necessary for the protection of commerce among the states."
"The question, it should be observed, is not with respect to the extent of the power of Congress to regulate interstate commerce, but whether a particular exercise of state power in view of its nature and operation must be deemed to be in conflict with this paramount authority."
"In short, the great body of the gas starts for points outside the state and goes to them. That the necessities of business require a much smaller amount destined to points within the state to be carried undistinguished in the same pipes does not affect the character of the major transportation. Neither is the case as to the gas sold to the three companies changed by the fact that the plaintiff, as owner of the gas, and the purchasers after they receive it might change their minds before the gas leaves the state, and that the precise proportions between local and outside deliveries may not have been fixed, although they seem to have been. The typical and actual course of events marks the carriage of the greater part as commerce among the states, and theoretical possibilities may be left out of account. There is no break, no period of deliberation, but a steady flow ending as contemplated from the beginning beyond the state line. Ohio R. Co. Commission v. Worthington, 225 U. S. 101, 225 U. S. 108; United States v. Reading Co., 226 U. S. 324, 226 U. S. 367; Western Union Telegraph Co. v. Foster, 247 U. S. 105, 247 U. S. 113."
matter within the domain of federal control, and to exempt it from the burden imposed by state legislation."
Pennsylvania R. Co. v. Knight, 192 U. S. 21, relied on by counsel for appellants and said to be exactly applicable to the case at bar, was an effort by the Pennsylvania Railroad Company to secure immunity from city regulation for a cab system which it ran in New York to and from its station to points in New York City, on the ground that it was part of interstate commerce. This Court held that, because it was independent of the railroad transportation, and not included in the contract of railroad carriage, it did not come within interstate commerce. The case was distinguished in the Swift case (p. 196 U. S. 401) from cartage for delivery of the goods when part of the contemplated transit. There is nothing in the case to indicate that, if such an agency could be and were used in a conspiracy unduly and constantly to monopolize interstate passenger traffic, it might not be brought within federal restraint.
As already noted, the word "commerce," when used in the act, is defined to be interstate and foreign commerce. Its provisions are carefully drawn to apply only to those practices and obstructions which, in the judgment of Congress, are likely to affect interstate commerce prejudicially. Thus construed and applied, we think the act clearly within Congressional power, and valid.
Other objections are made to the act and its provisions as violative of other limitations of the Constitution, but the only one seriously pressed was that based on the commerce clause, and we do not deem it necessary to discuss the others.
MR. JUSTICE DAY did not sit in these cases and took no part in their decision.
"For the purpose of this act, a transaction in respect to any article shall be considered to be in commerce if such article is part of that current of commerce usual in the livestock and meat packing industries whereby livestock and its products are sent from one state with the expectation that they will end their transit after purchase in another, including, in addition to cases within the general description, all cases whose purchase or sale is either for shipment to another state or for slaughter of the livestock within the state and the shipment outside of the state of the products resulting from such slaughter. Articles normally in such current of commerce shall not be considered out of such current through resort's being had to any means or device intended to remove transactions in respect thereto from the provisions of the act."
"Whenever in any investigation under the provisions of this title or in any investigation instituted by petition of the stockyard owner or market agency concerned which petition is hereby authorized to be filed, the Secretary, after full hearing, finds that any rate, charge, regulation, or practice of any stockyard owner or market agency for or in connection with the buying, or selling on a commission basis or otherwise, receiving, marketing, feeding, holding, delivery, shipment, weighing or handling, not in commerce, or livestock, causes any undue or unreasonable advantage, or preference as between persons or localities in intrastate commerce in livestock on the one hand, and interstate or foreign commerce in livestock, on the other hand, or any undue, unjust, or unreasonable discrimination against interstate or foreign commerce which is hereby forbidden and declared to be unlawful, the Secretary shall prescribe the rate, charge, regulation, or practice thereafter to be observed in such manner as in his judgment will remove such advantage, preference, or discrimination. Such rates, charges, regulations, or practices shall be observed while in effect by the stockyard owners or market agencies parties to such proceeding affected thereby, the law of any state or the decision of any state authority to the contrary notwithstanding."

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