AMERICAN TOBACCO CO. ET AL. v. UNITED STATES
NO. 18
Supreme Court of the United States
Decided June 10, 1946
Argued November 7, 8, 1945.
328 U.S. 781
NO. 18.
Argued November 7, 8, 1945. — Decided June 10, 1946.
Bethuel M. Webster argued the cause for petitioners in No. 19. With him on the brief was Francis H. Horan.
Assistant Attorney General Berge argued the cause for the United States. With him on the brief were Solicitor General McGrath, Charles H. Weston and Robert L. Stern.
MR. JUSTICE BURTON delivered the opinion of the Court.
The petitioners are The American Tobacco Company, Liggett & Myers Tobacco Company, R. J. Reynolds Tobacco Company,1 American Suppliers, Inc., a subsidiary of American, and certain officials of the respective companies who were convicted by a jury, in the District Court of the United States for the Eastern District of Kentucky, of violating
Each petitioner was convicted on four counts: (1) conspiracy in restraint of trade, (2) monopolization, (3) attempt to monopolize, and (4) conspiracy to monopolize. Each count related to interstate and foreign trade and commerce in tobacco. No sentence was imposed under the third count as the Court held that that count was merged in the second. Each petitioner was fined $5,000 on each of the other counts, making $15,000 for each petitioner and a total of $255,000. Seven other defendants were found not guilty and a number of the original defendants were severed from the proceedings pursuant to stipulation.
The Circuit Court of Appeals for the Sixth Circuit, on December 8, 1944, affirmed each conviction. 147 F. 2d 93.
The issue thus emphasized in the order allowing certiorari and primarily argued by the parties has not been previously decided by this Court. It is raised by the following instructions which were especially applicable to the second count3 but were related also to the other counts under
“Now, the term ‘monopolize’ as used in Section 2 of the Sherman Act, as well as in the last three counts
of the Information, means the joint acquisition or maintenance by the members of a conspiracy formed for that purpose, of the power to control and dominate interstate trade and commerce in a commodity to such an extent that they are able, as a group, to exclude actual or potential competitors from the field, accompanied with the intention and purpose to exercise such power. “The phrase ‘attempt to monopolize’ means the employment of methods, means and practices which would, if successful, accomplish monopolization, and which, though falling short, nevertheless approach so close as to create a dangerous probability of it, which methods, means and practices are so employed by the members of and pursuant to a combination or conspiracy formed for the purpose of such accomplishment.
“It is in no respect a violation of the law that a number of individuals or corporations, each acting for himself or itself, may own or control a large part, or even all of a particular commodity, or all the business in a particular commodity.
“An essential element of the illegal monopoly or monopolization charged in this case is the existence
of a combination or conspiracy to acquire and maintain the power to exclude competitors to a substantial extent. “Thus you will see that an indispensable ingredient of each of the offenses charged in the Information is a combination or conspiracy.” (Italics supplied.)
While the question before us, as briefly stated in the Court‘s order, makes no express reference to the inclusion, in the crime of “monopolization,” of the element of “a combination or conspiracy to acquire and maintain the power to exclude competitors to a substantial extent,” yet the trial court, in its above quoted instructions to the jury, described such a combination or conspiracy as an “essential element” and an “indispensable ingredient” of that crime in the present cases. We therefore include that element in determining whether the foregoing instructions correctly stated the law as applied to these cases. In discussing the legal issue we shall assume that such a combination or conspiracy to monopolize has been established. Because of the presence of that element, we do not have here the hypothetical case of parties who themselves have not “achieved” monopoly but have had monopoly “thrust upon” them. See United States v. Aluminum Co. of America, 148 F. 2d 416, 429.
The present cases are not comparable to cases where the parties, for example, merely have made a new discovery or an original entry into a new field and unexpectedly or unavoidably have found themselves enjoying a monopoly coupled with power and intent to maintain it. In the Aluminum Co. case, discussed later, there was a use of various unlawful means to establish or maintain the monopoly. Here we have the additional element of a combination or conspiracy to acquire or maintain the power to exclude competitors that is charged in the fourth count.
Before reaching that issue we shall touch upon another contention which the petitioners have made and which the Government has undertaken to answer. This is the contention that the separate convictions returned under the conspiracy count in restraint of trade and under the conspiracy count to monopolize trade amount to double jeopardy, or to a multiplicity of punishment in a single proceeding, and therefore violate the
We believe also that in accordance with the Blockburger case,
Petitioners further suggest that the second count (to monopolize), and the fourth count (to conspire to monopolize), may lead to multiple punishment, contrary to the principle of the Blockburger case. Petitioners argue that the Government‘s theory of monopolization calls for proof of a joint enterprise with power and intent to exclude competitors and, therefore, that the conspiracy to monop-
Although there is no issue of fact or question as to the sufficiency of the evidence to be discussed here, nevertheless, it is necessary to summarize the principal facts of that conspiracy to monopolize certain trade, which was charged in the fourth count. These facts demonstrate also the vigor and nature of the intent of the petitioners to exclude competitors in order to maintain that monopoly if need or occasion should offer itself to attempt such an exclusion. To support the verdicts it was not necessary to show power and intent to exclude all competitors, or to show a conspiracy to exclude all competitors. The requirement stated to the jury and contained in the statute was only that the offenders shall “monopolize any part of the trade or commerce among the several States, or with foreign nations.” This particular conspiracy may well have derived special vitality, in the eyes of the jury, from the fact that its existence was established, not through the presentation of a formal written agreement, but through the evidence of widespread and effective conduct on the part of petitioners in relation to their existing or potential competitors.
The three years at issue in the charges made were those immediately preceding the filing of the informations on
The fact is that Reynolds, in 1913, actually broke into the cigarette field with its Camel cigarettes, and, as a vigorous competitor of American, Liggett and P. Lorillard Company, revolutionized the cigarette industry. Gradually Reynolds grew to be one of the “Big Three” with American and Liggett. The later evidence then tends to show that those three, in spite of the earlier competitive history of Reynolds, have operated together in recent years in violation of the Sherman Act. Similarly, much of the evidence relating to the purchase of tobacco at auction does not apply in precisely equal degree to each petitioner. However, taking the story as a whole, each petitioner now has been convicted of the same offense under like counts and the problem before us is only to state the rule of law to be applied in defining monopolization under the Sherman Act as applied to all of the petitioners alike. To distinguish among them at each stage would not change the legal conclusion on the one issue here presented but would confuse what should be a clear summary of the facts essential to an understanding of that legal issue. Accordingly, each reference to “petitioners” in this recital will mean “some or all of the petitioners as disclosed by the record.”
First of all, the monopoly found by the jury to exist in the present cases appears to have been completely separable from the old American Tobacco Trust which was dissolved in 1911.7 The conspiracy to monopolize and
the monopolization charged here do not depend upon proof relating to the old tobacco trust but upon a dominance and control by petitioners in recent years over purchases
By the 1911 decree, the cigarette brands of the trust were distributed as follows: To American: Sweet Caporal, Pall Mall, Hassan and Mecca. To Liggett: American Beauty, Fatima, Piedmont, Imperiales, Home Run and King Bee. To P. Lorillard Company: Helmar, Murad, Mogul, Turkish Trophies and Egyptian Deities. Neither the old trust nor the petitioners in the present cases have ever done much general cigar business. Reynolds in 1911 had no cigarette business and it received none by the decree. It then was small in comparison with the other companies named. In 1913, it put its Camel cigarettes on the market. These were neither Turkish, pseudo-Turkish, nor Virginia cigarettes. They were made largely of burley tobacco which had not been used in any successful cigarette up to that time. They were “cased” or flavored—an old process in preparing plug tobacco but an innovation in cigarettes. That competition was highly successful. Reynolds’ sales rose to where, in 1919, it made about 40% of all domestic cigarette sales in the United States. By 1917 its total production exceeded by 50% the total national production of cigarettes in 1911. In 1916, American launched a new brand of burley cigarettes—Lucky Strikes. Liggett changed its Chesterfield
of the raw material and over the sale of the finished product in the form of cigarettes. The fact, however, that the purchases of leaf tobacco and the sales of so many products of the tobacco industry have remained largely within the same general group of business organizations for over a generation, inevitably has contributed to the ease with which control over competition within the industry and the mobilization of power to resist new competition can be exercised. A friendly relationship within such a long established industry is, in itself, not only natural but commendable and beneficial, as long as it does not breed illegal activities. Such a community of interest in any industry, however, provides a natural foundation for working policies and understandings favorable to the insiders and unfavorable to outsiders. The verdicts indicate that practices of an informal and flexible nature were adopted and that the results were so uniformly beneficial to the petitioners in protecting their common interests as against those of competitors that, entirely from circumstantial evidence, the jury found that a combination or conspiracy existed among the petitioners from 1937 to 1940, with power and intent to exclude competitors to such a substantial extent as to violate the Sherman Act as interpreted by the trial court.8
The position of the petitioners in the cigarette industry from 1931 to 1939 is clear from the following tables:
PERCENTAGE OF TOTAL U. S. PRODUCTION OF SMALL CIGARETTES—1931-1939.
| 1931 | 1932 | 1933 | 1934 | 1935 | 1936 | 1937 | 1938 | 1939 | |
|---|---|---|---|---|---|---|---|---|---|
| American.. | 39.5 | 36.6 | 33.0 | 26.1 | 24.0 | 22.5 | 21.5 | 22.7 | 22.9 |
| Liggett.. | 22.7 | 23.0 | 28.1 | 27.4 | 26.0 | 24.6 | 23.6 | 22.9 | 21.6 |
| Reynolds.. | 28.4 | 21.8 | 22.8 | 26.0 | 28.1 | 29.5 | 28.1 | 25.3 | 23.6 |
| Lorillard.. | 6.5 | 5.2 | 4.7 | 4.1 | 3.8 | 4.3 | 4.7 | 5.1 | 5.8 |
| Brown & Williamson.. | 0.2 | 6.9 | 5.5 | 8.3 | 9.6 | 9.6 | 9.9 | 9.9 | 10.6 |
| Philip Morris.. | 0.9 | 1.4 | 0.8 | 2.0 | 3.1 | 4.1 | 5.4 | 5.7 | 7.1 |
| Stephano.. | 0.1 | 0.1 | 0.2 | 0.5 | 1.4 | 1.9 | 2.5 | 3.1 | 3.3 |
| Axton-Fisher.. | 0.7 | 3.1 | 4.4 | 4.4 | 3.0 | 2.2 | 2.4 | 2.7 | 2.4 |
| Larus.. | 0.2 | 1.0 | 0.2 | 0.6 | 0.7 | 0.8 | 1.0 | 1.3 | 1.3 |
| Combined Percentages of American, Liggett and Reynolds... | 90.7 | 81.4 | 83.9 | 79.5 | 78.0 | 76.7 | 73.3 | 71.0 | 68.0 |
(Billions of cigarettes.)
| 1931 | 1932 | 1933 | 1934 | 1935 | 1936 | 1937 | 1938 | 1939 | |
|---|---|---|---|---|---|---|---|---|---|
| Total U. S. Production..... | 117.1 | 106.6 | 114.9 | 130.0 | 140.0 | 158.9 | 170.0 | 171.7 | 180.7 |
| American.. | 46.2 | 39.0 | 37.9 | 33.9 | 33.5 | 35.8 | 36.6 | 39.0 | 41.4 |
| Liggett.. | 26.6 | 24.6 | 32.2 | 35.6 | 36.3 | 39.1 | 40.2 | 39.3 | 39.0 |
| Reynolds.. | 33.3 | 23.2 | 26.2 | 33.8 | 39.4 | 46.9 | 47.8 | 43.5 | 42.6 |
| Lorillard.. | 7.6 | 5.5 | 5.4 | 5.3 | 5.3 | 6.8 | 8.1 | 8.8 | 10.5 |
| Brown & Williamson.. | 0.3 | 7.3 | 6.3 | 10.8 | 13.4 | 15.2 | 16.8 | 17.1 | 19.1 |
| Philip Morris.. | 1.0 | 1.5 | 0.9 | 2.6 | 4.4 | 6.4 | 9.2 | 9.7 | 12.8 |
| Stephano.. | 0.1 | 0.1 | 0.2 | 0.7 | 2.0 | 3.0 | 4.2 | 5.4 | 6.0 |
| Axton-Fisher.. | 0.8 | 3.3 | 5.0 | 5.7 | 4.2 | 3.5 | 4.1 | 4.5 | 4.3 |
| Larus.. | 0.3 | 1.0 | 0.3 | 0.7 | 1.0 | 1.2 | 1.7 | 2.2 | 2.3 |
| Combined volume of American, Liggett and Reynolds.. | 106.1 | 86.8 | 96.3 | 103.3 | 109.2 | 121.8 | 124.6 | 121.8 | 123.0 |
The first table shows that, although American, Liggett and Reynolds gradually dropped in their percentage of the national domestic cigarette production from 90.7% in 1931 to 73.3%, 71% and 68%, respectively, in 1937, 1938 and 1939, they have accounted at all times for more than 68%, and usually for more than 75%, of the national production. The balance of the cigarette production has come from six other companies. No one of those six ever has produced more than the 10.6% once reached by Brown & Williamson in 1939. The second table shows that, while the percentage of cigarettes produced by American, Liggett and Reynolds in the United States dropped gradually from 90.7% to 68%, their combined volume of production actually increased from 106 billion in 1931 to about 125 billion, 122 billion and 123 billion, respectively, in 1937, 1938 and 1939. The remainder of the production was divided among the other six companies. No one of those six ever has produced more than about 19 billion cigarettes a year, which was the high point reached by Brown & Williamson in 1939.
The further dominance of American, Liggett and Reynolds within their special field of burley blend cigarettes, as
The foregoing demonstrates the basis of the claim of American, Liggett and Reynolds to the title of the “Big Three.” The marked dominance enjoyed by each of these three, in roughly equal proportions, is emphasized by the fact that the smallest of them at all times showed over twice the production of the largest outsider. Without adverse criticism of it, comparative size on this great scale inevitably increased the power of these three to dominate all phases of their industry. “Size carries with it an opportunity for abuse that is not to be ignored when the opportunity is proved to have been utilized in the past.” United States v. Swift & Co., 286 U. S. 106, 116. An intent to use this power to maintain a monopoly was found by the jury in these cases.
The record further shows that the net worth of American, Liggett and Reynolds in terms of their total assets,
With this background of a substantial monopoly, amounting to over two-thirds of the entire domestic field of cigarettes, and to over 80% of the field of comparable cigarettes, and with the opposition confined to several small competitors, the jury could have found from the actual operation of the petitioners that there existed a combination or conspiracy among them not only in restraint of trade, but to monopolize a part of the tobacco
I.
The verdicts show that the jury found that the petitioners conspired to fix prices and to exclude undesired competition against them in the purchase of the domestic type of flue-cured tobacco and of burley tobacco. These are raw materials essential to the production of cigarettes of the grade sold by the petitioners and also, to some extent, of the 10 cent grade of cigarettes which constitutes the only substantial competition to American, Liggett and Reynolds in the cigarette field of the domestic tobacco industry. The tobaccos involved in these cases are the flue-cured, burley and Maryland tobaccos. The flue-cured or bright tobacco is grown in a number of areas called “belts.” These are in Virginia, North Carolina, South Carolina, Georgia and Florida. The tobacco takes its name of flue-cured from the “curing” process to which
The Government introduced evidence showing that, although there was no written or express agreement discovered among American, Liggett and Reynolds, their practices included a clear course of dealing. This evidently convinced the jury of the existence of a combination or conspiracy to fix and control prices and practices as to domestic leaf tobacco, both in restraint of trade as such, and to establish a substantially impregnable defense against any attempted intrusion by potential competitors into these markets.
It appeared that petitioners refused to purchase tobacco on these markets unless the other petitioners were also represented thereon. There were attempts made by
The Government presented evidence to support its claim that, before the markets opened, the petitioners placed limitations and restrictions on the prices which their buyers were permitted to pay for tobacco. None of the buyers exceeded these price ceilings. Grades of tobacco were formulated in such a way as to result in the absence of competition between the petitioners. There was manipulation of the price of lower grade tobaccos in order to restrict competition from manufacturers of the lower priced cigarettes. Methods used included the practice of the petitioners of calling their respective buyers in, prior to the opening of the annual markets, and giving them instructions as to the prices to be paid for leaf tobacco in each of the markets. These instructions were in terms of top prices or price ranges. The price ceilings thus established for the buyers were the same for each of them. In case of tie bids the auctioneer awarded the sale customarily to the buyer who bid first. Under this custom the buyers representing the petitioners often made bids on various baskets of tobacco
Where one or two of the petitioners secured their percentage of the crop on a certain market or were not interested in the purchase of certain offerings of tobacco, their buyers, nevertheless, would enter the bidding in order to force the other petitioners to bid up to the maximum price. The petitioners were not so much concerned with the prices they paid for the leaf tobacco as that each should pay the same price for the same grade and that none would secure any advantage in purchasing tobacco. They were all to be on the same basis as far as the expenses of their purchases went. The prices which were set as top prices by petitioners, or by the first of them to purchase on the market, became, with few exceptions, the top prices prevailing on those markets. Competition also was eliminated between petitioners by the purchase of grades of tobacco in which but one of them was interested. To accomplish this, each company formulated the grades which it alone wished to purchase. The other companies recognized the grades so formulated as distinctive grades and did not compete for them. While the differences between the grades so formulated were distinguishable by the highly trained special buyers, they were in reality so minute as to be inconsequential. This element, however, did not mean that a company could bid any price it wished for its especially formulated grades of tobacco. The other companies prevented that by bidding up the tobacco, at least to a point where they did not risk being
At a time when the manufacturers of lower priced cigarettes were beginning to manufacture them in quantity, the petitioners commenced to make large purchases of the cheaper tobacco leaves used for the manufacture of such lower priced cigarettes. No explanation was offered as to how or where this tobacco was used by petitioners. The compositions of their respective brands of cigarettes calling for the use of more expensive tobaccos remained unchanged during this period of controversy and up to the end of the trial. The Government claimed that such purchases of cheaper tobacco evidenced a combination and a purpose among the petitioners to deprive the man
II.
The verdicts show also that the jury found that the petitioners conspired to fix prices and to exclude undesired competition in the distribution and sale of their principal products. The petitioners sold and distributed their products to jobbers and to selected dealers who bought at list prices, less discounts. Almost all of the million or more dealers who handled the respective petitioners’ products throughout the country consisted of such establishments as small storekeepers, gasoline station operators and lunch room proprietors who purchased the cigarettes from jobbers. The jobbers in turn derived their profits from the difference between the wholesale price paid by them and the price charged by them to local dealers. A great advantage therefore accrued to any dealer buying at the discounted or wholesale list prices. Selling to dealers at jobbers’ prices was called “direct selling” and the dealers as well as the jobbers getting those prices were referred to as being on the “direct list.” The list prices charged and the discounts allowed by petitioners have been practically identical since 1923 and absolutely identical since 1928. Since the latter date, only seven changes have been made by the three companies and those have been identical in amount. The increases were first announced by Reynolds. American and Liggett thereupon increased their list prices in identical amounts.
The following record of price changes is circumstantial evidence of the existence of a conspiracy and of a power and intent to exclude competition coming from cheaper
Before 1931, certain smaller companies had manufactured cigarettes retailing at 10 cents a package, which was several cents lower than the retail price for the leading brands of the petitioners. Up to that time, the sales of the 10 cent cigarettes were negligible. However, after the above described increase in list prices of the petitioners in 1931, the 10 cent brands made serious inroads upon the sales of the petitioners. These cheaper brands of cigarettes were sold at a list price of $4.75 a thousand and from 1931 to 1932 the sales of these cigarettes multiplied 30 times, rising from 0.28% of the total cigarette sales of the country in June, 1931, to 22.78% in November, 1932. In response to this threat of competition from the manufacturers of the 10 cent brands, the petitioners, in January, 1933, cut the list price of their three leading brands from $6.85 to $6 a thousand. In February, they cut again to $5.50 a thousand. The evidence tends to show that this cut was directed at the competition of the 10 cent cigarettes. Reports that previously had been sent in by various officials and representatives to their companies told of the petitioners’ brands losing in competition with the 10 cent brands. The petitioners were interested in a sufficiently low retail price for their products so that they would defeat the threat from the lower priced cigarettes and found that, in order to succeed in their objective, it was necessary that there be not more than a 3 cent differential on each package at retail between the cheaper cigarettes and their own brands. The petitioners’ cuts in their list prices and the subsequent reductions in the retail prices of their products resulted in a victory over the 10 cent brands. The letters of petitioners’ representatives to their companies reported upon the progress of
Certain methods used by the petitioners to secure a reduction in the retail prices of their cigarettes were in evidence. Reynolds and Liggett required their retailers to price the 10 cent brands at a differential of not more than 3 cents below Camel and Chesterfield cigarettes. They insisted upon their dealers correcting a greater differential by increasing the retail price of the 10 cent brands to 11 cents with petitioners’ brands at 14 cents a package, or by requiring that petitioners’ brands be priced at 13 cents with the lower priced cigarettes at 10 cents a package. Salesmen for Liggett were instructed to narrow the differential to 3 cents, it being deemed of no consequence whether the dealer raised the price of the 10 cent brands or reduced the price of Chesterfields. Reynolds referred to a differential of more than 3 cents as “discriminatory” on the ground that the dealer then
III.
It was on the basis of such evidence that the Circuit Court of Appeals found that the verdicts of the jury were sustained by sufficient evidence on each count. The question squarely presented here by the order of this
It is not the form of the combination or the particular means used but the result to be achieved that the statute condemns. It is not of importance whether the means used to accomplish the unlawful objective are in themselves lawful or unlawful. Acts done to give effect to the conspiracy may be in themselves wholly innocent acts. Yet, if they are part of the sum of the acts which are relied upon to effectuate the conspiracy which the statute forbids, they come within its prohibition. No formal agreement is necessary to constitute an unlawful conspiracy. Often crimes are a matter of inference deduced from the acts of the person accused and done in pursuance of a criminal purpose. Where the conspiracy is proved, as here, from the evidence of the action taken in concert by the parties to it, it is all the more convincing proof of an intent to exercise the power of exclusion acquired through that conspiracy. The essential combination or conspiracy in violation of the
In Apex Hosiery Co. v. Leader, 310 U. S. 469, 496, this Court said in a footnote, “On finding . . . a power to control the output, supply of the market and the transportation facilities of potential competitors, in the anthracite coal market, the arrangement was held void in United States v. Reading Co., 253 U. S. 26, 47-48.” It has been held that regardless of the use made of it, a power resulting from the deliberately calculated purchase of a control, which enables a holding company to dominate two great competing interstate railroad carriers and two great competing coal companies engaged extensively in mining and selling anthracite coal which must be distributed over these railroads, is a menace and an undue restraint upon interstate commerce within the meaning of the Anti-Trust Act and is in flagrant violation of the prohibition against monopoly in the Second Section of that Act. United States v. Reading Co., 253 U. S. 26. In Northern Securities Co. v. United States, 193 U. S. 197, in referring to the holding company device there in issue, this Court said that the mere existence of such a combination and the power acquired by the holding company as its trustee constituted a menace to and a direct restraint upon that freedom of commerce which Congress intended to recognize and protect and which the public is entitled to have
The precise question before us has not been decided previously by this Court. However, on March 12, 1945, two weeks before the grant of the writs of certiorari in the present cases, a decision rendered in a suit in equity brought under
“Many people believe that possession of unchallenged economic power deadens initiative, discourages thrift and depresses energy; that immunity from competition is a narcotic, and rivalry is a stimulant, to industrial progress; that the spur of constant stress is necessary to counteract an inevitable disposition to let well enough alone. . . . These considerations, which we have suggested only as possible purposes of the Act, we think the decisions prove to have been in fact its purposes. [148 F. 2d at 427.]
“Starting, however, with the authoritative premise that all contracts fixing prices are unconditionally prohibited, the only possible difference between them and a monopoly is that while a monopoly necessarily involves an equal, or even greater, power to fix prices, its mere existence might be thought not to constitute an exercise of that power. That distinction is nevertheless purely formal; it would be valid only so long as the monopoly remained wholly inert; it would disappear as soon as the monopoly began to operate; for, when it did—that is, as soon as it began to sell at all—it must sell at some price and the only price at which it could sell is a price which it itself fixed. Thereafter the power and its exercise must needs coalesce. Indeed it would be absurd to condemn such contracts unconditionally, and not to extend the condemnation to monopolies; for the contracts are only steps toward that entire control which monopoly confers: they are really partial monopolies. [Id. 427-428.]
“It does not follow because ‘Alcoa’ had such a monopoly, that it ‘monopolized’ the ingot market: it may not have achieved monopoly; monopoly may have been thrust upon it. If it had been a combination of existing smelters which united the whole indus
try and controlled the production of all aluminum ingot, it would certainly have ‘monopolized’ the market. In several decisions the Supreme Court has decreed the dissolution of such combinations, although they had engaged in no unlawful trade practices. . . . We may start therefore with the premise that to have combined ninety per cent of the producers of ingot would have been to ‘monopolize’ the ingot market; and, so far as concerns the public interest, it can make no difference whether an existing competition is put an end to, or whether prospective competition is prevented. The Clayton Act itself speaks in that alternative: ‘to injure, destroy, or prevent competition.’§ 13 (a), 15 U. S. C. A. [Id. 429.]“It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel. Only in case we interpret ‘exclusion’ as limited to manoeuvres not honestly industrial, but actuated solely by a desire to prevent competition, can such a course, indefatigably pursued, be deemed not ‘exclusionary.’ So to limit it would in our judgment emasculate the Act; would permit just such consolidations as it was designed to prevent. [Id. 431.]
“In order to fall within
§ 2 , the monopolist must have both the power to monopolize, and the intent to monopolize. To read the passage as demanding any ‘specific’ intent, makes nonsense of it, for no monopolist monopolizes unconscious of what he is doing.” [Id. 432]
In the present cases, the petitioners have been found to have conspired to establish a monopoly and also to have the power and intent to establish and maintain the mo
Affirmed.11
MR. JUSTICE FRANKFURTER entirely agrees with the judgment and the opinion in these cases. He, however, would have enlarged the scope of the orders allowing the petitions for certiorari so as to permit consideration of the alleged errors in regard to the selection of the jury.
MR. JUSTICE REED and MR. JUSTICE JACKSON took no part in the consideration or decision of these cases.
MR. JUSTICE RUTLEDGE, concurring.
I concur in the Court‘s opinion and judgment. In doing so, however, I express no judgment concerning other questions determined on the appeal to the Circuit Court of Appeals, 147 F. 2d 93, and presented in the application for certiorari or the later petition for rehearing and enlargement of the scope of review here, including the question whether upon the particular facts the law has been applied in such a manner as to bring about, in substantial effect, multiple punishment for the same offense. Cf. Pinkerton v. United States, ante, pp. 640, 648, dissenting opinion.
Notes
“Before and during the period of three years next preceding the filing of this information, . . . defendants, . . . well knowing the foregoing facts, have, . . . unlawfully monopolized the aforesaid interstate and foreign trade and commerce in tobacco, in violation of Section Two of the Act of Congress of July 2, 1890, . . .
“In adopting and exercising such methods, means and practices, each defendant has acted with full knowledge that unanimity of action with reference thereto was and would be the policy, intent and practice of the others, that such unanimity of action would necessarily result in drawing to defendant major tobacco companies as a group the power to dominate, control, and exclude others from the aforesaid interstate and foreign trade and commerce, has intended such result, and such result has in fact been achieved.
“Said unlawful monopolization has had the effects, among others, of permitting a few companies to attain control of a bottleneck in a great industry, through which a major farm commodity, on which several million are dependent, must pass, on its way through the hands of jobbers and retailers, to the many millions of people who use tobacco products; of enabling these few companies to abuse their resulting strategic and dominant position, by making the income of growers of leaf tobacco lower than it otherwise would have been; by making the income of distributors and other manufacturers of tobacco products lower than it otherwise would have been; and by keeping from all other groups in the industry, and from consumers, the benefits which otherwise would flow from free, vigorous and normal competition.”
American—Lucky Strike, Pall Mall (by a subsidiary), Herbert Tareyton cigarettes, Bull Durham tobacco, about 50 brands of chewing tobacco and hundreds of brands of smoking tobacco.
Liggett—Chesterfield and about 15 other brands of cigarettes, 45
Reynolds—Camel cigarettes, 12 brands of smoking tobacco, including Prince Albert, and 88 brands of chewing tobacco.
P. Lorillard Company—Old Gold, and Sensation cigarettes, as well as other tobacco products.
Philip Morris & Co., Ltd., Incorporated—Philip Morris, and Paul Jones cigarettes.
British-American Tobacco Company, Limited—Many tobacco products, including those of its subsidiary, Brown & Williamson Tobacco Corporation.
Brown & Williamson Tobacco Corporation—Raleigh cigarettes.
The Imperial Tobacco Company, Ltd.—Tobacco products sold in Great Britain and Ireland.
Universal Leaf Tobacco Company, Inc.—Dealers in leaf tobacco.
Stephano Brothers, Axton-Fisher Tobacco Company and Larus Bro. Co., Inc., are all producers of the so-called “10 cent cigarettes.” Their cigarettes, like certain comparable cigarettes produced by P. Lorillard Company and by Philip Morris & Co., Ltd., Incorporated, generally sell for 10 cents a package in contrast to 13 or 15 cents or more for the leading brands of burley blend cigarettes.