measure used for the purpose of determining whether in a given case a particular act had or had not brought about the wrong against which the statute provided.

With respect to the second section a consideration of the text served to establish, said the Court, that this section was intended to supplement the first, and to make sure that by no possible guise could the public policy embodied in the first section be frustrated or evaded. The words "to monopolize" reach every act bringing about the prohibited results. The ambiguity, if any, is involved in determining what is intended by monopolize. But this ambiguity is readily dispelled, said the Court, in the light of the previous history of the law of restraint of trade to which we have referred, and the indication which it gives of the practical evolution by which monopoly and the acts which produce the same result as monopoly, that is, an undue restraint of the course of trade, all came to be spoken of as restraint of trade. In other words, having by the first section forbidden all means of monopolizing trade, that is, unduly restraining it by means of every contract, combination, etc., the second section seeks, if possible, to make the prohibitions of the act all the more complete and perfect by embracing all attempts to reach the end prohibited by the first section, that is, restraints of trade, by any attempt to monopolize, even though the acts by which such results are attempted to be brought about be not embraced within the general enumeration of the first section. And, of course, when the second section is thus harmonized with and made, as it was intended to be, the complement of the first, it becomes obvious that the criterion to be resorted to in any given case for the purpose of ascertaining whether violations of the section have been committed, is the rule of reason1 guided by the established law and by the plain duty to enforce the prohibitions of the act, and thus the public policy which its restrictions were obviously enacted to subserve.

While the meaning of sections one and two thus seemed clear to the Court, it proposed, before applying its interpretation, to consider the contentions of the plaintiff and defendants, which 1 Italics supplied by the author.

would give a different significance to the act than that adopted by the Court.

The fundamental contention of the government was that the language of the statute embraced every contract, combination, etc., in restraint of trade, and hence left no room for judgment. It held further that this was the interpretation that had been placed upon the act by the Court, notably in the freight association cases. In reply the Court said that it was undoubtedly true that in the opinion in each of the freight association cases general language was made use of, which, when separated from its context, would justify the conclusion that it was decided that reason could not be resorted to for the purpose of determining whether the acts complained of were within the statute. Yet it was also true that the nature and character of the contract or agreement in each case was fully referred to, and suggestions as to their unreasonableness pointed out, in order to indicate that they were within the prohibitions of the statute. That the cases relied upon did not, when rightly construed, sustain the doctrine contended for was established, it held, by all of the numerous decisions of this court which have applied and enforced the anti-trust act, since they all in the very nature of things rest upon the premise that reason was the guide by which the provisions of the act were in every case interpreted. Indeed in Hopkins v. United States, decided after the Trans-Missouri Freight Association case, but before the Joint Traffic Association case, the Court said, "to treat as condemned by the act all agreements under which, as a result, the cost of conducting an interstate commercial business may be increased would enlarge the application of the act far beyond the fair meaning of the language used. There must be some direct and immediate effect upon interstate commerce in order to come within the act." And "if the criterion by which it is to be determined in all cases whether every contract, combination, etc., is a restraint of trade within the intendment of the law, is the direct or indirect effect of the acts involved, then of course the rule of reason becomes the guide, and the construction which we have given the statute, instead of being refuted by the cases relied upon, is by

those cases demonstrated to be correct." In other words, the rule of reason and the result of the test as to direct and indirect in their ultimate aspect come to one and the same thing. But "in order not in the slightest degree to be wanting in frankness, we say that in so far, however, as by separating the general language used in the opinions in the Freight Association and Joint Traffic cases from the context and the subject and parties with which the cases were concerned, it may be conceived that the language referred to conflicts with the construction which we give the statute, they are necessarily now limited and qualified.'

The contentions of the defendants were fundamentally: first, that the act could not be constitutionally applied to the case before the court, since this would result in extending the power of Congress over mere questions of production within the states; and, second, that the act could not be applied without impairing rights of property and destroying the freedom of contract or trade, which were protected by the constitutional guaranty of due process of law. The first contention, said the Court, is foreclosed by the numerous decisions since the Knight case; and the second assumes that reason may not be resorted to in applying the statute, and that therefore the right to contract is unreasonably restricted. But since we have pointed out that reason may be resorted to, the proposition based on an unsound assumption falls to the ground.

The meaning of the Sherman Act having been set forth, what was the status under this act of the Standard Oil Company? The established facts, said the Court, demonstrate the illegality of the combination before us; the Standard Oil Company is not only a combination in restraint of trade, but a combination in unreasonable restraint of trade. It turned next, therefore, to a consideration of the remedy to be applied.

Ordinarily, said the Court, adequate relief against acts done in violation of the statute would result from restraining the doing of such acts in the future. But in a case like this where there exists not only a continued attempt to monopolize, but also a monopolization, the duty to enforce the statute requires the 1 221 U. S. 67-68.

application of broader remedies The essential remedies are: first, to forbid the doing in the future of acts violative of the statute; and, second, the exertion of such measure of relief as will effectually dissolve the illegal combination. The Court then proceeded as a means of determining the relief to be granted to consider the relief afforded by the Circuit Court. The decree of the Circuit Court is given on page 406, and need not be repeated here. The Supreme Court affirmed this decree of the lower court except in certain particulars. It held, first, that the interests involved were so vast that the defendants should be allowed six months to carry out the decree, instead of only thirty days. Second, it thought that section seven of the decree, forbidding interstate commerce to the New Jersey corporation and its subsidiary companies until the dissolution of the combination, might work serious injury to the public, and should not have been awarded. And, finally, the Supreme Court construed section six of the decree as restraining the stockholders or the corporations, after the dissolution of the combination, from, by any device whatever, recreating, directly or indirectly, the illegal combination, but not as depriving them of the power to make normal and lawful contracts or agreements. For example, after the dissolution some of the separate pipe-line companies might desire to combine so as to form a continuous line. Such action, the Court held, would not be repugnant to the act, yet it might be deemed to have been restrained by the decree of the court below. Section six was therefore modified to permit such lawful arrangements. As thus modified the decree was affirmed, and the court below was allowed to retain jurisdiction to the extent necessary to compel compliance in every respect with its decree.1

The decision that the Standard Oil Company was unlawful was a unanimous one, but Justice Harlan filed a separate opinion dissenting from certain parts of the decision, particularly the enunciation of the "rule of reason." Relentlessly he cited from

1 The decree of the Circuit Court, modified to meet the views of the Supreme Court, was filed July 29, 1911; and may be found in Decrees and Judgments in Federal Anti-Trust Cases, pp. 136-144.

former decisions of the Court, particularly the Trans-Missouri Freight case and the Joint Traffic case, passages indicating that the Court had substantially modified its former position.1 The Court, said Justice Harlan, now says to those who object to all legislative prohibition of contracts, combinations, and trusts in restraint of interstate commerce, "you may now restrain such commerce, provided you are reasonable about it; only take care that the restraint is not undue." 2 As the result of this upsetting of the long-settled interpretation of the act we will doubtless have, he said, in cases without number, the constantly recurring inquiry-difficult to solve by proof 3-whether the particular contract, combination, or trust involved in each case is or is not an "unreasonable" or "undue" restraint of trade. But more dangerous in his opinion was the fact that the decision of the Court in this case represented judicial legislation, a usurpation of the constitutional functions of the legislative branch of the government. Justice Harlan held that the Court had done in this case exactly what in the Trans-Missouri Freight case it had refused to do; that in the Trans-Missouri Freight case the Court had held that the act prohibited every contract, etc., in restraint of trade, and that to read into the act the word "unreasonable" would be an act of judicial legislation; and this they could not and ought not to do. The Supreme Court, therefore, by interpretation of a statute has changed, he said, the public policy adopted by Congress, a proceeding that might well cause some alarm for the integrity of our institutions.1

UNITED STATES v. AMERICAN TOBACCO COMPANY; AMERICAN TOBACCO COMPANY V. UNITED STATES

5

The suit against the tobacco trust was brought on July 10, 1907. The defendants were twenty-nine individuals, sixty-five

In speaking of the Standard Oil and the Tobacco cases Judge Peter Grosscup said, "It would be mere hypocrisy to say that the court has not turned upon itself. What the court fourteen years ago said was not in the act the court now say is in the act." (North American Review, 194, p. 3.) 2 Italics are Justice Harlan's. 4 221 U. S. 83, 105. 3 Italics supplied by the author.

5 Ibid., 106-193 (May 29, 1911.)