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234 U. S.

Argument for Plaintiff in Error.

Anti-trust laws must be co-extensive with the evils to be prevented and remedied.

The Missouri anti-trust statute is unconstitutional, because, while it prohibits arrangements and comținations designed or tending to lessen competition in the manufacture or sale of commodities, or to increase market prices, it does not prohibit arrangements or combinations between purchasers of commodities designed or tending to lessen competition or to decrease market prices.

A combination of buyers may restrain trade to the same extent and with the same or greater injury as a combination of sellers.

The Missouri anti-trust statute, as construed and applied by the state Supreme Court in its judgment herein, is unconstitutional because it unreasonably and arbitrarily violates and restrains plaintiff in error's right and freedom of contract beyond the police power of the State, thus depriving it of property without due process of law.

In support of these contentions, see Adams v. Brenan, 177 Illinois, 194; Bailey v. Master Plumbers, 103 Tennessee, 99; Chaplin v. Brown, 83 Iowa, 156, 157; Cleland v. Anderson, 66 Nebraska, 252, 260; Columbia Water Power Co. v. Columbia St. Ry. Co., 172 U. S. 475, 487; Commonwealth v. Int. Harvester Co., 131 Kentucky, 551; Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 556; Cote v.

urphy, 159 Pa. St. 420; Dier's Case (Year Book, 2 Hen. V, fol. 5, pl. 26); Downing v. Lewis, 56 Nebraska, 386, 389; Hunt v. Riverside Coöperative Club, 140 Michigan, 538; Ipswich Tailors' Case (11 Coke's Rep. 53a); Loewe v. Lawlor, 208 U. S. 274, 301; Meyer v. Richmond, 172 U. S. 82, 91; M., K. & T. R. Co. v. Elliott, 184 U. S. 530; More v. Bennett, 140 Illinois, 69, 77; Niagara Fire Ins. Co. v. Cornell, 110 Fed. Rep. 816, 825; Owen County Society v. Brumback, 128 Kentucky, 137; People v. Buller St. Foundry Co., 201 Illinois, 236, 257; Rohlf v. Kasemeier, 140 Iowa, 182, 190; Slaughter House Cases, 16 Wall. 127;

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Smiley v. Kansas, 196 U. S. 447, 454; St. L., 1. M. & S. Ry. Co. v. McWhirter, 229 U. S. 265, 276; Slate v. Associated Press, 159 Missouri, 410, 456; State v. Croyle, 7 Okla. Cr. 50; State v. Duluth Board of Trade, 107 Minnesota, 506, 546; State v. Int. Harvester Co., 237 Missouri, 369; State v. Standard Oil Co., 218 Missouri, 1, 370; Swift & Co. v. United States, 196 U. S. 375, 395; United States v. Workingmen's Council, 54 Fed. Rep. 994.

Mr. John T. Barker, Attorney General of the State of Missouri, with whom Mr. W. T. Rutherford, Mr. W. M. Fitch, Mr. Thomas J. Higgs and Mr. Paul P. Prosser were on the brief, for defendant in error:

There is no Federal question in this case and the judgment of the Missouri Supreme Court should be affirmed. Astor v. Merritt, 111 U. S. 401; Powell v. Supervisor, 150 U. S. 113; Sayward v. Denny, 158 U. S. 941; Lone Wolf v. Hitchcock, 187 U. S. 299; Lohmeyer v. Company, 214 Missouri, p. 688; Brown v. Railroad, 175 Missouri, p. 189; Ross v. Company, 241 Missouri, 299.

The Missouri anti-trust statutes are constitutional and have been so held many times. Standard Oil Co. v. Missouri, 224 U. S. 270; Missouri v. Standard Oil Co., 218 Missouri, p. 368; Missouri v. Tobacco Co., 177 Missouri, 37; Missouri v. Insurance Co., 251 Missouri, 278; Railroad v. Mackey, 127 U. S. 209; Barbier v. Connelly, 113 U. S. 31; Railroad Co. v. Ellis, 165 U. S. 150; United States v. Association, 171 U. S. 505; Missouri v. Int. Harvester Co., 237 Missouri, 369.

MR. JUSTICE MCKENNA delivered the opinion of the court.

Information in the nature of quo warranto brought in the Supreme Court of the State to exclude plaintiff in error from the corporate rights, privileges and franchises exer

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cised or enjoyed by it under the laws of the State, that they be forfeited, and all or such portion of its property as the court may deem proper be confiscated or in lieu thereof a fine be imposed upon it in “punishment of the perversion, usurpation, abuse and misuse of franchises."

The ground of the action is the alleged violation of the statutes of the State passed respectively in 1899 and 1909 and entitled "Pools, Trusts and Conspiracies" and "Pools, Trusts and Conspiracies and Discriminations."

The facts alleged in the information are these: Plaintiff in error is a Wisconsin corporation engaged in the manufacture and sale of agricultural implements, binders, mowers, etc., and was licensed on the fifth of April, 1892, to do business in Missouri under the name of the Milwaukee Harvester Company, and on September 18, 1902, became licensed to do and engaged in such business in the State. In that year the International Harvester Company of New Jersey was organized with a capital stock of $120,000,000 for the purpose of effecting a combination of plaintiff in error and certain other companies to restrain competition in the manufacture and sale of such agricultural implements in Missouri, and the New Jersey company has maintained plaintiff in error as its sole selling agent in Missouri. Before the combination the companies combined were competitors of one another and of other corporations, individuals and partnerships engaged in the same business in the State and that thereby the people of the State, and particularly the retail dealers and farmers of the State, received the benefit of competition in the purchase and sale of farm implements. The combination was designed and made with a view to lessen, and it tended to lessen, free competition in such implements, and thereby the said corporations entered into and became members of a pool, trust, combination and agreement. In furtherance thereof and for the purpose of giving the International Harvester Company of New Jersey a

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monopoly of the business of manufacturing and selling agricultural implements in the State, and for the purpose of preventing competition in the sale thereof, plaintiff in error has compelled the retail dealers in each county of the State who desire to handle and sell or act as agent for it to refrain from selling implements manufactured or sold by competing companies or persons. By reason thereof competition in such implements has been restrained, prices controlled, the quantity of such implements has been fixed and limited, and plaintiff in error has been able to secure, and for several years enjoy, from 85% to 90% of the business, all to the great damage and loss of the people of the State, and by reason of its participation in the pool, trust and combination and by reason of the acts and things done by it plaintiff in error has been guilty of an illegal, wilful and malicious perversion and abuse of its franchises, privileges and licenses granted to it by the State.

The answer of plaintiff in error denied that it had become a party to any combination or that in its transactions there was any purpose to restrain or lessen competition, or that trade had been or was restrained.

The case was referred to a special commissioner to take the evidence and report his conclusions. He found, as alleged in the information, that the International Harvester Company of New Jersey was a combination of the properties and businesses of formerly competing harvester companies, and plaintiff in error being one of such companies and, thereafter by selling the New Jersey company's products in Missouri, had violated the Missouri statutes against pools, trusts and conspiracies.

In exceptions to the report of the special commissioner plaintiff in error urged that the statute of Missouri violated the equality clause and due process clause of the Fourteenth Amendment to the Constitution of the United States, “(1) Because said statute arbitrarily discrim

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inates between persons making or selling products and commodities and persons selling labor and service of all kinds: In that each section of said statute applies only to articles of merchandise and not to labor or services and the like, the prices of which are equally and similarly determined by competition, and may be equally and similarly the subject of combination and conspiracy to the detriment of the public. (2) Because said statute arbitrarily discriminates between the makers and sellers of products and commodities and the purchasers thereof: It prohibits manufacturers and sellers from making contracts or arrangements intended or tending to increase the market price of the articles they make or sell, but does not prohibit purchasers from combining to fix or reduce the market price of the commodities or articles to be purchased by them. (3) Because said statute, as construed by the Commissioner, unreasonably and arbitrarily interferes with plaintiff in error's right to make proper and reasonable business contracts, and deprives it of property rights in respect thereto.

These exceptions were urged and argued in the Supreme Court upon the filing of the commissioner's report. Judgment was entered upon the report, in which it was adjudged that by reason of the violation of the statutes of the State as charged in the information, plaintiff in error had forfeited the license theretofore granted to it to do business in the State, and it was adjudged that the license be forfeited and canceled and the company ousted from its rights and franchises granted by the State to do business in the State, and a fine of $50,000 was imposed upon it. It was, however, provided that upon payment of the fine on or before the first of January, 1912, and immediately ceasing all connection with the International Harvester Company of New Jersey and the corporations and copartnerships with which it had combined, and not continuing and maintaining the unlawful agreement and com

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