*1 But far go whether or the Court means to as it to go, seems even if holding its later limited to the narrow I situation now us, agree before cannot its pay conclusion. It “regular seems me that rate” Port of York for New longshoremen “straight time” provided scale for union and that contract, this was union, including true for the whole individual respondents. Far from than receiving less overtime respondents statute required, were, agree- through the ment, recipients To much more. call their demand pyramided one “overtime on overtime” is not to use clever catchphrase, but fairly to describe the true nature of their claim.
I would judgments reinstate the District Court. v. UNITED STATES COLUMBIA STEEL CO. et al. Argued April 29-30, No. 7, 1948. 1948. Decided June *3 Solicitor General Perlman for the argued cause United States. him on With the brief were Assistant Sonnett, Attorney Weston, General Charles H. Robert L. Wright, Robert G. Seaks Victor H. Kramer. L.
Nathan argued Miller the cause the Columbia al., appellees. Steel etCo. With him on the brief were Blough, Steel, Roger M. Merrill Russell and Jr. Edwin D. for the Wright the cause argued
Alfred him brief With on the appellee. Corporation, Steel Finger. Aaron Court. opinion delivered
Mr. Justice Reed § suit under brings this The United States Corporation enjoin Act Sherman assets of purchasing and its subsidiaries Coast on West steel fabricator largest independent 1§§ would violate ground on the that such filed on Feb- complaint, 2 of the Act.1 Sherman charged if contract of sale between ruary 24,1947, Corporation Steel and Consolidated Steel rolled steel out, competition the sale of were carried 4, C., read, applicable, as so far as 2 and U. S. Sections follows: contract, or- other- “Every in the form of trust combination 1.§ among the or
wise, сonspiracy, in restraint of trade commerce or hereby States, foreign nations, to be declared or with several engage Every any or illegal: person shall make contract . . . who by 1-7 of this any conspiracy or declared sections combination and, guilty misdemeanor, on illegal of a be- shall be deemed title to exceeding $5,000, thereof, fine not punished conviction shall year, punish- by imprisonment exceeding one or both said or ments, court.” in the discretion of the monopolize, “Every monopolize, attempt person who shall § *4 monop- any person persons, to conspire other or or combine or with States, among any several part of the trade or commerce the olize misdemeanor, and, guilty foreign nations, of a shall be deemed or with $5,000, exceeding thereof, by punished be fine not on conviction shall year, by punish- by imprisonment exceeding or both said one ments, the in the discretion of court.” invested States are “The several district courts the United
4.§ 1-7 jurisdiction prevent restrain sections and violations attorneys duty title; it several district and shall be the the of this direction States, districts, under the respective in of the United their Attorney proceedings equity prevent General, in to institute of the . .” restrain such violations. . and products and in products fabricated steel be would re- strained, and that on the contract indicated effort part of United attempt monopolize States Steel to market in products. fabricated steel trial After before a single judge court, judgment district was entered in favor defendants, and brought by appeal. the case here direct Stat. S.U. C. 29.§ underlying facts set forth in the case are find-
ings trial court, exceptions and with few those findings disputed are not government. rely We by chiefly on findings to indicate the nature of the com- merce here question competi- and the extent tion would challenged be affected contract. production may steel involved this case be
spoken as being divided stages: produc- into two products tion rolled and their steel fabrication into products. finished steel products Rolled steel consist plates, shapes, sheets, bars, steel and other unfinished products steel and are turn from ingots by made means of rolling mills. The steel fabrication involved herein may also divided plate into structural fabrication fabrication. Fabricated structural products steel consist of building framework, bridges, towers, and transmission similar permanent structures, and are primarily made from shapes, rolled steel although plates and other rolled products may employed. also be plate Fabricated on products, hand, the other of pressure vessels, consist tanks, welded similar pipe, products made principally plates, although rolled steel shapes and bars are also occasionally plate used. Both and structural fabricated products to specifications are made for a particular pur- pose; fabricated prod- do not include standard ucts repetitive processes made in the manufacture of general wire, steel merchandise nails, bolts, such as *5 standardized The manufacture such
window frames. The facil- not involved in case. products this finished is different quite fabrication are required ities for structural former plate fabrication; required for those drilling, as- shearing, punching, for require equipment shapеs welding sembling, structural riveting and rolling, equipment bending, for require latter whereas the finished plates go which into the cutting, forming and product. defendants: Columbia Steel complaint lists four States Corporation, United Consolidated Steel
Company, Corporation and States Steel Corporation, United Steel en- and its subsidiaries Delaware. United States Steel products rolled steel producing business of gage fabrica- fabrication, plate do no and in structural but assets Steel, sale whose tion work. Consolidated only in struc- enjoin, engaged seeks to plate fabrication. United tural fabrication largest producer with its is the of rolled subsidiaries States, a total with invest- products the United During a billion and a half dollars. ment of more than pro- ten-year period 1937-1946 United States Steel a almost third of all rolled steel exactly duced States, average sales produced the United In nearly a billion and a half period dollars. were 1937-1941, little five-year period average sales were contrast, had Consolidated, -by a billion dollars. over than ten million depreciated value was less plants whose five-year period 1937-1941, Con- During dollars. dollars, twenty million average only had sales solidated negotiated and the States Steel committee purchase Consolidated estimated terms twenty- in the future would run to Consolidated’s sales annually agreed two million dollars purchase price slightly eight on a excess of million produced the war Consolidated During dollars. over *6 billion and a half dollars worth of ships government- with longer furnished no possesses any facilities. Consolidated for building ships.2 facilities Steel,
Columbia a wholly-owned subsidiary of United Steel, States has in largest prоducer been rolled steel the Pacific Coast area plants since and Utah California, and has also selling for agent other served rolled steel subsidiaries of United States and Steel, for two subsidiaries of that company engaged structural fabrication, the American Bridge Company Pittsburgh at and Bridge the Virginia Company at Roanoke, Virginia, though neither it nor any other of United subsidiary States Steel in the Consolidated area market a fabri- was cator of any kind. National Company, Tube another United States Steel subsidiary, pipe sells tubing. Consolidated structural plants has fabricating near Los and at Angeles Orange, Texas, plate fabricating facil- ities California and Arizona. Consolidated has sold its products during past ten years in eleven states, re- ferred to hereafter as the Consolidated Arizona, market: California, Idaho, Montana, Louisiana, Nevada, New Mexico, Oregon, Texas, Utah and Washington. It is that market which the views as significant determining the extent of between United States Steel and Consolidated. It is not the usual Pacific
2An building uncontested ship statement of Consolidated’s activ during years ities appears the war in Consolidated’s brief: “During years, acting sponsorship, the war under Government ships Consolidated constructed for purposes defense and war procurement agencies various longer engaged Government but it is no in this field. ship Consolidated’s war work was confined to facilities, ordnance construction with Government furnished all Inc., which have now been Shipyards, abandoned. Consolidated subsidiary operating yard, Consolidated disposed a small boat has plant group its speculators. to a is, of real estate therefore, Thеre no competition between shipbuilding U. S. Steel and business.” Census.3 by groups employed states
and Mountain is a subsidi- Delaware Corporation of technical assist- renders Steel which ary of United production. in steel engaged subsidiaries to other ance aon traditionally been sold have steel Rolled II rolled Prior to War system.4 World basing point on the price computed at a Coast oh West sold *7 United though both basing points, even basis of eastern rolled steel produced Steel and Bethlehem States Steel as Consolidated in Fabricators such products California. proximity their full benefit of get thus did disadvantages under competitive western market. fact illustrated fabricators worked which western seller largest Steel has been the that United States market, in the Consolidated steel fabricated structural fabricating plants in the area. no though it has even period 1946, in 100 ten-year ending different During with United successfully bid concerns products for the of fabricated structural States Steel sale 3 Texas, in the Consolidated and which are included Louisiana market, grouping, Colorado are not listed in the census whereas Wyoming, census, are from the listed excluded are States, 1940, Census of the Consolidated market. Sixteenth United Census, p. of the 3. Areas the United States Bureau 4 Commission an order which In 1924 the Federal Trade entered Clayton United violated concluded that States Steel had § byAct its so-called Act and 5 of the Federal Trade Commission § “Pittsburgh pricing, according to which all rolled plus” method of freight price including from products sold at a delivered steel were ship point of Pittsburgh destination, regardless of the actual Corp., United States 8 F. T. C. ment. Matter Steel selling frоm its was ordered to cease and desist States Steel basing basis, employing any point other than the on or from that filed point shipment. In United States Steel of manufacture Appeals petition in the Third Circuit Court of to review that order with the admitting complied had never United States Steel part yet has been reached in of the order. No decision latter proceeding. market;
in the lo- concerns are those outside principal cated the area. United States Steel’s competitor measured basis, on a national Bethlehem Steel, have how- fabricating California, does facilities in ever, prior II World War United Steel had prepared plans for the fabricating erection of facilities California. The war it to postpone made necessary plans. This points use of eastern basing past fig- makes on product producers ures rolled steel sales in determining Consolidated market unreliable effective competition for the future sales rolled steel market. United States now Steel uses Geneva as a basing point.
The urgent wartime demand for prompted to construct new plants rolled steel in the largest plants West. of these Geneva, erected at Utah, of nearly at a cost $200,000,000, and was designed, constructed, operated by *8 government.
the account of the plant had an an- capacity nual 1,200,000 of more than tons ingots, employed turn could be to make 700,000 plates tons of and 250,000 shapes. plant tons of large Another erected at Fontana, California. This is now operated through arrangements private parties government. with the In January 1945 United States Steel acquisition considered the plant, оf the Geneva but speculative because of the nature of the venture by people attacks within and the government, without Steel States decided not to a submit bid and Corporation notified the Defense Plant to that effect on August 8, Shortly Surplus thereafter the Property Benjamin Administrator wrote to F. Fairless, President Steel, advising him bid United States Steel would be May welcomed. On 1,1946, United States Steel submitted a bid for the plant Geneva $47,500,000. The terms provided bid that United $18,000,000 than not less spend would Geneva, at facilities erect additional funds to
its own Pittsburg, mill at erect a cold-reduction $25,000,000 coils of hot rolled 386,000 tons to consume California, that a suffi- The bid estimated produced at Geneva.5 pro- annual be found absorb market could cient 600,000 The bid tons. 456,000 to ranging from duction sold with would be products Geneva stipulated that possibilities offer point. This would basing Geneva as price rolled steel in the for a reduction varia- their customers. The purchasers and West Coast depended on 600,000 tons 456,000 tion between other products by users consumption of rolled steel plant. Pittsburg new Steel’s than United States manufactur- consuming that additional bid noted which would located in the West plants ing might products. rolled steel for additional provide a market mill to be at Pitts- cold-reduction erected Apart from the to the of fabricat- the bid was silent as burg, provide a market by United States Steel to ing facilities products. for Geneva Administration an 23, 1946, War Assets May
On accepted. United States Steel was that the bid of nounced discussed in detail An memorandum accompanying received, and which had six bids been concluded the most advantageous. United States Steel’s bid was unacceptable for a number of The other bids were found his bidder offer no assurance of reasons; either the could operate plant, responsibility ability or his financial low, price requested was too or the bidder offered *9 prod rolling given rolling process the to Cold name the temperatures ranging F. which have ucts at from 50° to 240° F. Coils produced by rolling process the hot are fed into a cold-reduction been higher quality strip mill and rolled into and sheets which are of much Francis, strip Camp The Mak than hot rolled and sheets. See Treating (5th ed., 1940), ing, Shaping pp. 1227-1245. for the large to lend the bidder sums government the such facilities at erection of additional facilities or to erect expense.6 The memorandum noted that the government development bid would “foster the the West successful independent enterprise” by encouraging the loca of new plants the west steel-consuming manufacturing tion of ern states. 17, 1946, Attorney
On June General advised did proposed sale War Assets Administration that the laws, a violation of the antitrust opinion his constitute The days two thereafter. and the sale was consummated Attorney requested General was ac opinion of the 1944, Surplus Act of Property cordance 20 of the § procedure gov when 765, 775, requires Stat. such plants $1,000,000 being more are costing ernment than Surplus in the provides nothing sold. That section anti impair, amend, modify “shall Property Act per prevent application or limit and their trust laws Attorney under buy property sons” who the Act. capacity of United States ingot General noted that the total national Steel had declined 35.3% and that if capacity in 1939 to 31.4% plant acquired, percentage Geneva were would be Considering only the Pacific Coast increased 32.7%. states, Geneva, and Mountain Attorney said, General would increase percentage capacity Steel’s in that area from 17.3% Steel, however, estimated that 39%. gov Corp. proposed The bid of Iron that the Colorado Fuel & spend $47,935,000 facilities, ernment for the erection of additional including $25,000,000 tin-plate over for the erection of a sheet Corp. proposed mill. The bid of Pacific-American Steel Iron government $25,000,000 lend bidder for the erection of a tin plate Riley proposed mill. bid Steel Co. that the $28,844,000 mill, lend the bidder for the construction a sheet tube mill, and additions the structural mill. *10 ingot have it would Geneva
on 51% of these On the basis Coast area. capacity in the Pacific v. Alumi United States light in the construed figures America, Tobacco 416, 2d and American 148 F. num Co. of Attorney General States, 781, the v. 328 U. S. Co. United not vio sale, such, would proposed concluded that opinion no letter added that antitrust laws. The late the practices any acts expressed legality as to the was or in engaged might States Steel have which United future. See for com engage might which it v. United States Steel United States parable situation 417, 251 U. S. Corp., Roach, plant, Alden G.
Prior to sale of the Geneva Consolidated, approached Fairless of United President of that he would like to sell the States Steel and indicated had conversations business of Consolidated. Roach also regard and Kaiser with representatives with of Bethlehem subject again mentioned the to the same end. Roach replied February Fair less in or March of and Fairless restudying was its decision not that United States Steel plant, bid on and did not want to discuss the the Geneva was de- purchase of Consolidated until the Geneva issue June, After the sale of Geneva effected cided. was spoke again arranged Fairless and to have a Roach investiga- make an committee United States Steel plants in August. tion of the Consolidated The commit- reported $14,000,000 that it would tee cost take three years plants equivalent to construct to those owned properties and that had a Consolidated, the Consolidated depreciated $9,800,000. negotia- value of After further parties price on agreed approximately tions $8,250,000, purchase agreement and a was on executed 14 according agreed buy December to which Columbia physical assets of Consolidated and four subsidiaries. Fairless testified on the stand that witness purpose purchasing Steel’s Consolidated was to assure plates shapes produced Geneva, a market for at purpose Roach to with- testified Consolidated’s equity draw the busi- *11 stockholders’ from fabrication cyclical ness with its fluctuations at a time a favor- when price able could be realized.
I. theory the United in bringing States this suit acquisition is that the an Consolidated constitutes illegal restraint of interstate manu- commerce because all facturers except United States will be from Steel excluded supplying the business of requirements Consolidated’s rolled products, competition steel and exist- because now ing between Consolidated and in the United products sale structural fabricated and will be pipe In addition, government eliminated. the that the alleges acquisition of Consolidated, viewed the of the light previous acquisitions by Steel, series of attempt аn to monopolize production constitutes the and products sale of steel the fabricated Consolidated appellees market. The contend that the amount of com- is petition which will eliminated so that insignificant a the restraint effected is reasonable restraint an at- not tempt monopolize prohibited by to the Sherman Act.7 On and in agreement the record before us with the
7This purchase competing company. See not a of stock of 7, Clayton Act, 730, 731; 38 Trade v. Western Stat. Federal Comm’n § Co., assumed, however, Meat 554. It that the U. S. must be public policy by Clayton announced 7 of the Act is to be into taken § determining acquisition consideration in whether Con assets by solidated States Steel same results as with the economic purchase prohibitions stock violates the of the Sherman against Handler, Mergers Act unreasonable restraints. See Industrial Laws, 179, Anti-Trust 32 Col. L. Rev. proposed In 1941 Temporary National Economic Committee apply acquisition require to be amended to of assets and to § approval prior Comment, Federal Trade Commission. See description Yale L. J. bills which intro- have been Congress carry duced to before out these recommendations. has failed government conclude
trial court we of Consoli- prove its contention three in the unreasonably lessen dated would contract proposed respects charged, therefore further Act. We 1 of the Sherman not forbidden § attempt prove has failed hold that § violation of 2. monopolize proposed purchase charge first that the We turn producers of rolled competition by excluding will lessen sup- States Steеl other than United ten- Over the requirements of Consolidated. plying the purchased year from 1937 to 1946 period including products, million of rolled steel over two tons *12 abnormally requirements. wartime Whatever high in the products Consolidated uses amount of rolled steel sub- possible insofar from other supplied future will be as other Steel, producers sidiaries of United States and products prospec- rolled will lose as a steel Consolidated tive customer. sharp dispute are in the size and nature parties
The as to Con- products of the market for rolled steel with which consumption compared. appel- is to The solidated's be products lees are sold a national argue rolled on major producers that for scale, and entire regarded should be the market. Viewed standpoint, this in- requirements Consolidated’s are an y2 significant market, fraction of the total less than government argues the market must be 1%. narrowly and drawn, more that the relevant market to considered is the eleven-state in which area Consolidated further in that products, sells its and area con- sidering consumption plate only structural fabricators a violation of the Sherman has been Act If established. all sales of rolled steel in the Consolidated are considered, pur- market Consolidated’s tons represent chases of two million than little more total of million tons. The figure is not 3% appreciably different if five-year period 1937-41 or 1946 alone as the If measuring period.8 is used comparable market is construed even more narrowly, and consumption restricted to the of plates shapes market, figures for 1937 indicate that consumption Consolidated’s рlates shapes was 13% of the total. Data are offered by
1946 which are too uncertain to furnish reliable guide.9 following accepted by table was the trial court as correct: *13 government The in its bid for notes that United States Steel plant postwar
the Geneva estimated that the in seven Western market 227,000 213,000 shapes per plates states would be tons of and tons of year, compares figures purchases and with the 1946 Con these 107,128 shapes. Apart plates 43,770 solidated of tons of and tons only figures consumption from the fact that included estimated market, against seven states as eleven in the Consolidated Consoli finishing up purchases principally dated's in to war 1946were devoted figures consumption were based on the contracts. The for estimated considerably assumption activity lower the level of would be during than the war. appellees’ argu- realizes the force of government scale, are a products steel sold on national
ment that rolled during the non-war attempts to demonstrate that and requirements produced years of Consolidated’s were 80% to not in Coast; resorts data on the West only of Con- to demonstrate that fact the record 26% plants purchases produced steel solidated’s rolled were we Consolidated market area.10 Whether located how- accept government’s figures, or Consolidated’s determining little value in the extent ever, they are of steel purchase will rolled which West Coast fabricators market since the products future, the eastern and plants new at Geneva and Fontana construction of points basing new on West Coast the creation of producers will Wеst Coast rolled steel presumably give of West market larger fabricating far share Coast than before the war. difficulty is that the record furnishes little
Another considering plates as and propriety indication prod- rolled shapes as market distinct from other steel producers products If steel can make other ucts. rolled easily as as plates shapes, and then the effect shapes plates removal of demand for Consolidated’s the market for against plates must be measured alone, comparable products. for all shapes but rolled conclusively indicate, that suggests, record but does not products make inter- producers rolled steel can other shapes plates, and that therefore changeably figure this The table from which the derives 80% Coast Producers” inconclusive. It refers “Purchases from West producers produced the and does not indicate whether the themselves acting agents producers. steel or were of eastern rolled during challenge is no Consolidated’s statement There produc years rolled 1937-41 and 1946 to it from the deliveries against 495,848 208,093 tons tons as tion the West Coast totaled producers. from eastern *14 potential competition not measure the injury
we should shapes considering plates the demand for total compare alone, but rather demand for Consolidated’s products comparable steel the all rolled demand for products in the marketing rolled steel Consolidated area. as showing read the record the trial court
We comparable accept theory did not the the market plates shapes was restricted to the demand for in but did area, accept government’s the Consolidated theory that was to be market restricted to the total products for rolled in demand steel the eleven-state area. basis the trial court found steel require- On that that the represented part” ments of Consolidated “a small in consumption the Consolidated area, that Consolidated not a “substantial market” producers for rolled steel selling competition with United Steel, States and that acquisition of Consolidated would not injure any competitor produc- United States Steel engaged products sale of rolled tion and steel in the Consolidated market or elsewhere. We recognize difficulty lay- a rule what ing products down as to areas or are com- petitive, one In with another. this and on this case we strongly record have circumstances that indicate to rolled production consumption steel us Consolidated area is marketing competitive area and product consideration.
In analyzing injury resulting from the withdrawal of as a purchaser Consolidated of rolled products, been considering acquisition steel we have step as integration vertical Regarded as a United Steel. seller of fabricated purchaser rather than as a rolled steel products, may of Consolidated however, the regarded step as a well, horizontal integration will since States Steel broaden its facilities for
512 of Consolidated. through purchase
steel fabrication Con- competition between determining In extent subsidiaries structural fabrication and the two solidated in steel the sale fabricated of United States Steel determine the size of the market again we must products, compete. The may be said to companies in which the two plate no fab- that United States Steel does parties agree fabricating rication, that is restricted and and makes products pipe. steel structural plates, whereas National pipe by bending welding and subsidiary, a makes seamless Tube, United States Steel parties agree which does not pipe process a through steel heading fall under the fabrication.
We turn first to field of fabricated structural appellees in products. steel, As the case of rolled scale, on national structural fabricators sell claim that production must be measured- and that Consolidated’s posi- An index of the against all structural fabricators. tion of Consolidated as structural fabricator shown reported by bookings period 1937-1942, its for the During the American Institute of Steel Construction. period country were bookings total the entire nearly tons, Consolidated’s share was 10,000,000 of which 84,533 only government compe- tons. The argues tition is to be measured with reference to the eleven-state products. its area which Consolidated sells Viewed basis, bookings on that total for the limited area for six-year period 1,665,698, were which United States gov- share was and Consolidated’s The Steel’s 17% 5%. has more ernment claims that Consolidated become a important period, alleges and that book- factor since were divided ings the Consolidated market among fabricators, Steel had which had and Consolidated Bethlehem Steel each 13% next had largest 9%, structural fabricators 11%. Although appellees of the total.11 chal- 6% 3% lenge accuracy government’s figures, find- the district court made no reference to them the accept sufficiently present we them as reliable for our ings, purpose. figures on relies past competition demonstrate that at least in the structural steel has been conducted on a national having scale. Five out of the ten fabricators structural *16 in perform sales market largest Consolidated operations area, including their fabrication outside the United States Steel and Bethlehem Steel. Purchasers of products able fabricated structural have been to secure bids throughout country, from fabricators and there- showing fore statistics the share of United States Steel consumption in the total fabricated products any prescribed in area structural are little probative value in ascertaining extent to which con- products injured sumers of would be through these elimi- companies. nation of between the two largest States, 11 10 structural steel in the 11 Western fabricators bookings quoted The table includes a correction as to Consolidated’s which was made after the exhibit was introduced. products, however, wartime
As in the of rolled steel case rele- prewar statistics of little developments have made why appellees urge three reasons eastern vance. The competitive disadvantage with fabricators will be at a the western market: the avail- western fabricators for plant the Geneva ability of rolled steel in- plants price, West Coast at a lower and other prod- in rates on fabricated freight crease commercial land rates. The increase ucts, grant and the abolition of freight profitable rates has made it less for eastern the elimination of West, fabricators to sell shipments land rates on has made it grant government profitable for to govern- less eastern fabricators sell competition may agencies ment the West. Whatever past have existed between Consolidated and the company Steel, two subsidiaries of United States bridge appellees urge, will exist to much lesser extent Consequently, though the future.12 even may be in claiming correct the eleven-state area is proper measuring competition market for with Con- *17 solidated, may the government not at the same time prewar claim that statistics to United States Steel’s major share of that significance. market are of Apart from question geographical the size of the market, appellees urge that the fabri- bookings for cated structural products steel are of little significance fabricating The trial court found that the subsidiaries United States Steel would be eliminated from West Coast in the market except specialized products they future equipped are economically higher prices per fabricate and which sell at ton of product.
Since the up case, record was made in this States Steel has United price products announced the mill for Geneva steel has been per ton, May $3 1, reduced represented effective 1948. That amount previously existing price products mill differential of Geneva steel products produced over Pittsburgh, Chicago, Gary, Birming- at Quarterly, 2, May 1948,p. ham. S.U. Steel Vol. No. 6.
because Consolidated and United States Steel make dif- types ferent of structural products. In view of the fact that jobs structural steel are fabricated on an indi- vidual basis, it is compare output difficult to of United States that of Consolidated, but appellees argue general only light does medium fabrication, whereas United States Steel does heavy fabrication. appellees support their argu- ment with an elaborate analysis statistical by of bids companies. two Those figures show that Consolidated and United States Steel submitted bids for the same project in a very small number figures of instances.13 Such are not conclusive of competition; lack of suggests that knowledge that one party has submitted may bid discourage others from bidding. govern- ment has very introduced evidence, little however, show that in fact types structural steel sold Consolidated are similar to those sold United appellees States Steel. The urge further only proportion small of Consolidated’s business fell 13During ten-year period ending in 1946 United States Steel 2,409 jobs bid on in the Consolidated area and was successful 6,377 jobs Consolidated bid 2,390. on was successful There only jobs, however, Forty were companies on which both bid. jobs companies these on which both bid were awarded United Steel, Consolidated, 35 were awarded to and 91 were awarded competitors. Reducing figures tonnage basis, these to a covering 499,605 States Steel was awarded bids tons out a total tonnage 1,273,152 on which bids were tons. submitted Consoli jobs involving 578,847 157,997 bid on dated tons and was awarded tonnage 122,353 tons. The involved in bids the 166 common tons, 38,920, of which United States Steel’s share was Consolidated’s 24,162, competitors 59,271. and other *18 customarily figures
The above bid on indicate that Consolidated lighter work; average types tonnage of for bids the Consolidated’s tons, average tonnage was 90 whereas the for United States Steel was jobs companies The 166 on tons. which both submitted bids considerably larger volume, averaging were in 737 tons. plate toas products, and that steel
category of structural compe- was no work there and miscellaneous fabrication The trial whatsoever. States Steel with United tition of Consolidated’s found on this issue court 16% in products in steel structural business 70% here of the statistics On the basis plate fabrication. be- summarized, competition court found that the trial of in manufacture and sale companies tween the two was not substantial. fabricated structural will be government argues also The and National Tube eliminated between Consolidated In we have no pipe. difficulty of this field the sale of market to be scope determining geographical competition, of extent since determining considered National claims that Consolidated and government large on a in the compete nation-wide scale field Tube gas types for oil and pipe pipelines. diameter Other by apparently made the two concerns are pipe com petitive as the does not contest this assertion special appellees.14 past of the Consolidated has following from the extract record summarizes the .evidence question: on this by type pipe pipe
“A. The weld made Consolidated is electric up pipe known as weld or weld from 4-inch fusion arc sizes say any pipe. pipe 30-inch. don’t electric weld We make larger pipe Consolidated make other than 26-inch is made than primarily industry, pipe for and sold to water and our works primarily gas industry. sold to the oil and We don’t make same type gages pipe, and the sizes which we manufacture and the general quitе lengths and the are in those made different from Con- only very part They overlap field solidated Steel. at a small physical pipe insofar as the dimensions are concerned. “Q. spoken pipe You have water made conveyance. penstocks? Are have those what been referred as No, many Well, yes, penstocks,
“A. sir. to a certain extent types pipe. penstocks It low-pressure other water is true that are included in that far Consolidated is concerned. National as
517 in comparatively pipe pressure ized walled for light low purposes, irrigation transmission, such water whereas National Tube has heavy pipe made a walled for high pressure purposes which chiefly is used the oil and gas industry. National pipe substantially cheaper Tube produce. The record show, however, does years last few supplied Consolidated has large diameter pipe for and gas pipelines oil on at least four occasions three of supplied part which National Tube also of the pipe requirements.15 Although the record does not show the extent field, of Consolidated’s business in this one of the witnesses estimated that Consolidated’s contract furnish pipe pipeline for the Trans-Arabian 90% would run to $30,000,000. appellees almost seek minimize importance this field pointing pipe out to be used for the Trans- pipeline Arabian is 30 and in diameter, inches is too a large size to be made process em seamless ployed by National Tube. The record is barren on the Company any penstock Tube pipe. They do not make have not any years. made for ten
“Q. you light-pressure pipе? And none of what term compete high-pressure pipe “A. We don’t with that. make We only.” 15Roach testified that the first order which Consolidated had filled pipe for such was for the Counties and Southern Southern California gas line, but he size did indicate the or date the order. The president of National Tube testified that Consolidated contracted pipe to furnish 100 miles of 26-inch for the El Paso Natural Co., supply miles, Gas National Tube contracted to and a third competitor 400 miles. The same also testified that National .witness supply pipe Tube contracted in 1946 to a small amount 24-inch Co., the Pacific Gas and Electric and that Consolidated in 1947 also agreed quantity pipe pipeline. to furnish the same As of 30,1946, “heavy pipe” November Consolidated had unfilled orders for $9,830,079, figure which does not include the Pacific Gas and Electric or Trans-Arabian order. its between Consolidated production
comparative in the manu Steel, competitors, than United other that other does show The record large pipe. facture *20 parties any connected major companies, not welded and seamless manufacture do proceeding, to this normal that under further claim pipe.16 appellees The Tube would and National Consolidated circumstances sells pipe in field because Consolidated compete this pipe, and that National Tube $30 a ton more than the only of pipe to sell its because Consolidated is able to take Tube and other concerns inability of National reply argues government on additional orders. pro its costs of may be able to reduce that Consolidated obtained, of orders is suffiсiently large if a volume duction a support is adduced to such conclusion. but no evidence facts the of the trial court summarized opinion that was no substan- above, and concluded there outlined tial National Tube and Consolidated between further, pipe; findings the sale of one of the went even compete” “do not the stating companies that the two pipe products. of their sale
The trial court also had concluded the attempted to prove failed to that United States Steel had monopolize fabricating products business of the the in violation of 2. The trial § Consolidated market judge apparently opinion pur- the since the 1, did a violation of § chase Consolidated not constitute it every could not constitute violation of since at- § tempt monopolize illegal to must also constitute re- straint. In trial that the findings judge his concluded purchase agreement was entered into “for sound business monopolize produc- reasons” with no intent tion and products. sale of fabricated steel
16 g., Republic Corp., Corp., Youngstown E. A. O. Smith Sheet producers and Tube Co. There are other the West.
I—i In support position proposed its contract violates 1 of the Act, urges Sherman the government § that all the legal conclusions district court were argued erroneous. It is that, regard without percentages consumption products by of rolled steel just considered, acquisition by United States Steel of Consolidated violates the Sherman Act. Such an arrangement, claimed, it is excludes pro- other ducers of rolled steel mar- the Consolidated ket and illegal constitutes an per restraint se which Or, inapplicаble. rule reason phrasing argument government’s differently, contention seems be that provide facilities which controlled *21 output market for the of plant process the Geneva is a of integration per vertical and invalid under Sher- se the man Consolidated, Act. The it is pointed out, would also eliminate between Consoli- dated and the subsidiaries of in the United States Steel products pipe sale structural products, potential would eliminate competition from Consolidated in products. the sale other steel We also note that acquisition of Consolidated will bring United States Steel for plate the first time the field into fabrication.
A. We first a lay possible objection to one side to meas uring injury competition by to a market to reference in which is than less nation-wide area. The Sherman Act is not limited to eliminating restraints whose effects States; consistently cover the we held entire United have only that the relevant competitive where market covers a may small prevent area Sherman Act be invoked within that In unreasonable restraints area. United Co., 218, States v. Yellow S. Cab 332 U. we sustained the a validity complaint alleged that the defendants had in monopolized operating large cab four business alleged in the area which the It the volume is
cities.17 United States In v. important. that is affect restraints by of trade 100, we found restraint Griffith, 334 U. S. area. covering small picture exhibitors chain of motion diffi indicated the has previous our discussion Although Con in which area accepting the eleven-state culties competitive its relevant sells solidated govern purposes decision the accept we market, be considered аrea is one to argument this ment’s competition of the withdrawal the effect on measuring pro a market for rolled steel- other of' Consolidated as together under common control bringing and of the ducers fabricating subsidiaries of and the of Consolidated States Steel. on v. heavily
B. The relies Co., Cab supra, Yellow support argument its for the as a consumer possible withdrawal of Consolidated at 226: U.S. importance of is the the interstate commerce “Likewise irrelevant type of commerce affected relation the entire amount more than The Sherman Act is concerned with the United States. large, trade. nation-wide obstacles channels of interstate away appreciable designed sweep obstructions so that the It all might effectively statutory policy trade As this of free achieved. Co., Farmer’s Co. v. Prairie Farmer Court in Indiana Guide stated 279, provisions of 293 U. ‘The have both a S. §§ *22 significance apply any part geographical and to and distributive distinguished any part whole to the United States as from the forming part things of the a of interstate commerce.’ It classes of complaint for to follows in this case is not defective failure that the allege monopoly has to number that CCM with reference the total a relative and sold in the United States. Its of taxicabs manufactured necessary position production has no relation to in the field of cab restrain, ability conspire monopolize to or appellees of the to segment Act, appreciable an cab sales. violation interstate segment may monopolized allegation An such a has been or that sufficient.” restrained illegаl an producers of other rolled steel constitutes goods charged in the Cab case complaint restraint. The Yellow intent, monopolize the cab plan, that there was a in the through operation business, from manufacture companies operating cab large cities, acquiring four a companies into cab therein; tying or interests those operating manufacturing company requiring from the manufac- purchase their cabs companies market. There prevailing above the price turer at production no the volume of cab allegation rival cab as a market for which was thus excluded total proportion a substantial of the manufacturers was con- produced, government volume of cabs that it is proposition for the cludes case stands preempt any market illegal per se for manufacturer integration provided goods through for his vertical an “appreciable” amount of interstate commerce is involved.18 holding
We do not construe our the Yellow Cab case illegal acquisition by to make United States Steel this outlet its rolled steel without consideration of opportunities competitor pro- its effect on the of other particularly following excerpt, relies on the U. S. at 226-27: conspiracies
“Nor can it be doubted that combinations and alleged type By in this case fall within the ban of Sherman Act. excluding part all cab manufacturers other than CCM from that represented operating companies the market the cab under their control, appellees effectively through limit the outlets which cabs may be sold interstate commerce. Limitations of that nature have again been condemned time and as violative of the Act. ... In addition, by preventing operating companies the cab under their manufacturers, purchasing CCM, from other control cabs than appellees deny opportunity purchase companies those free, competitive cabs in a market. The Sherman Act has never been thought conspiracy purchase to sanction such a to restrain the free goods in interstate commerce.”
522 discussing In their
ducers market
rolled steel.19
we
the fact
case,
in
Yellow
said that
charge
Cab
not
insulate
conspirators
integrated
that
were
did
vio-
act,
corporate integration
them from the
charged
In the
complaint
lated
act.
conspired
had
the defendants
combined
pur-
question
with the intent and
effect the restraints
cities,
pose monopolizing
cab business
certain
true.
accepted
as
allegation
on motion to dismiss that
re-
complaint
Where a
such
unreasonable
charges
show,
facts of the Yellow Cab
straint as the
case
de-
is immaterial
amount of interstate trade affected
has
a
Act
termining whether
violation of
Sherman
may
A
either
charged.
been
restraint
unreasonable
accompanied
because
reasonable
a restraint otherwise
intent
a
restraint
specific
accomplish
forbidden
or
falls
that are
because it
within the class
restraints
illegal per
complaint charges
For
where a
example,
se.
price
have
that the defendants have
or
engaged
fixing,20
asso-
concertedly refused to deal with non-members of an
ciation,21
patented
have licensed
on condition
or
device
unpatented
employed
conjunction
materials be
with the patented device,22then the amount of commerce
illegal
involved is immaterial because such restraints are
19
general
language
1
2 of the
has
Sherman Act
§§
prohibiting only
restraints,
been
unreasonable
not all
construed
States,
Oil Co. v.
possible
Standard
United
of trade.
restraints
specific
per Nothing supports se. Yellow Cab case the the theory all dealing arrangements illegal exclusive are se. per subsidiary
A probability will in all deal with only parent goods its parent fact, the can furnish. That however, does not make the acquisition invalid. When other elements of Sherman Act present, violations are the corporate fact of material relationship is and can be considered in the determination of whether restraint attempt or to restrain is teaching exists. That this the Yellow quota- Cab case is indicated the by following tion: case, ownership
“And so this common corporate appellees impo- control of the various are alleged tent to liberate combination con- complaint from spiracy impact of the Act. was charges restraint of interstate trade only by not effected appellees the combination object but primary the combination. The theory the complaint, language to borrow Co., Reading v. 57, States 253 U. S. is 'dominating power’ over cab operating com- panies by ‘was not expansion obtained normal meet the demands growing of business as a result superior and enterprising management, by but deliberate, purchase calculated for control.’ If that theory is borne by evidence, out this case coupled proof with undue restraint of inter- plain trade, state violation of the Act has occurred.” at U. S. 227-28. That previous view accord decisions of the Court.23
23Compare Pictures, our statement in United v. Paramount States 131, 173-174: 334 U. S. “Exploration phases necessary of these of the not cases would
if, Department argues, integration pro- as the of Justice vertical of the legality purchase through for its rolled steel
of a market outlet depends of Consolidated manufacturing facilities acquired control but upon the of that merely not fact dealings for upon many also other factors. Exclusive Steel, and United rolled steel between Consolidated otherwise, integration vertical are brought about illegal, any at rate until the effect of such control competi- opportunities of unreasonably is to restrict the *25 product. tors to market their Pictures, 131,
In v. U. S. Paramount in presented govern- we were with a which the situation integration illegal ment was under charged vertical major the We held that control the Sherman Act. producer-distributors nearly over of the three-quarters population 100,000 in first-run theaters cities over illegal, was not itself and we remanded the case to findings. outlining the for further In the district court significant factors which we considered to be deter- mining emphasized we lеgality integration, the vertical importance characterizing the the nature of the market served, to be and the on the market which the leverage particular integration possible. or vertical creates makes A important second test which we considered the dueing, distributing pictures illegal per exhibiting motion se. majority the not take view. In But of the Court does the opinion majority legality integration of the of vertical under the (1) purpose on or intent with which it was Sherman Act turns conceived, (2) purpose power or it creates the attendant First, if or intent. it runs afoul of the Sherman Act it was calcu- gain appreciable segment of control over an lated scheme competition, suppress or than market and to restrain rather expansion legitimate to meet needs.” business dealing arrangements for legality of contractual exclusive was Co., v. Lomb Bausch & 321 U. S. sustained Publishing Co., v. Compare 728-29. Federal Trade Comm’n Curtis S. 260 U. or purpose
Paramount case intent with the combination was When a conceived. combination operation in an through its actual results unreasonable purpose or be restraint, may inferred; though intent even no may achieved, unreasonable restraint be nevertheless accomplish a finding specific intent such an unrea sonable may restraint render liable under the the^actor Compare Sherman Act. United States v. Griffith.
U. 100, 105.24 S.
It seems clear to us that vertical integration, such without more, cannot be held violative of the Sher- man is an term explicit Act. It indefinite without meaning. Even the iron industry, where could a line drawn —at end of mining ore, production or pig-iron ingots, rolling when the mill 24Id., pp. 106-107:
“Anyone single operаtes town, who owns theatre in or acquires right film, who monopoly the exclusive exhibit a has a popular usually sense. But he does not 2 of the violate § acquired strategic Sherman or Act unless he has maintained his position, sought expand or monopoly, expanded his means it *26 cognizable of those of trade restraints which are under 1. For § things large merely those are condemned are measure § the end of conduct which violates 1. Standard Oil Co. § States, v. always 221 U. 61. that is not S. But true. Sec contracts, tion 1 combinations, conspiracies covers or of in restraint conspiracies trade. 2 is not Section restricted to or combinations monopolize any to person monopolize also makes it but a crime to attempt monopolize any part foreign or to of to interstate or trade power, lawfully or monopoly it is that or commerce. So whether unlawfully acquired, may constifuta-an-eviL and stand- -con itself though demned under even it remains For unexercised. § § alia, a.t, aimed, Act is inter or of retention effective control. v. market See United States Aluminum Co. of America, 416, 428, power 148 F. 2d Hence the of existence ‘to competition exclude when is desired to do so1is itself a viola it purpose 2, provided coupled tion of is it or intent to § power. exercise that AmericanTobacco Co. v. United States, 328 781, 809, 811, 814.” U.S. or at some fabrication on order completed,
operation is No standard merchandise? of manufacture into stage the extent possible and therefore answer would as other factors permissible integration governed, must be violations, by the other circumstances in Sherman Act easily may аdvances Technological of individual cases. expand processes into industry plant a its require basic to desired produce as to goods or finished so semi-finished expense. volume and with less articles greater determine the course of It is not for courts to rec- development. may economic Economists Nation’s ommend, may and executive branches chart legislative of business competitive courses which the forces legal production to and so that can seek reduce costs increase may to living standard of be available all. higher monopo- monopoly attempts and and to dangers evils to others grow lize that out of size efforts eliminate large small, Congress have caused markets, from or many commerce and trade in regulate the Executive respects. appeared public But no has of a direction se, forbids, expansion an policy per facilities company meet the needs of new markets existing community, community whether that nation-wide county-wide. On the other been hand, courts have given by Congress powers monopoly regulation. wide very trade, terms broadness of such as restraint purpose monopolize substantial have placed upon responsibility apply courts the Sher- man Congress Act so as to avoid evils at which aimed. industries, exceptions, approach The basic with few do not a cartelized If America form. businesses are to be entering forbidden from into different stages produc- tion that order come Congress, must *27 courts.
Applying the standards laid down in Paramount the case, we integration conclude the so-called vertical resulting acquisition frоm of does the Consolidated unreasonably opportunities competitor restrict of the the producers product. to market of rolled steel their We accept competitive as the market total relevant the de- mand for area; rolled steel in the eleven-state past years the has over ten accounted only expectations of that and if demand, to the 3% development industry realized, western steel are proportion expected Consolidated's to be lower may figure than that in Nor a specific the future. can we find in present accomplish intent case unreasonable restraint, for reasons which III heading we discuss under opinion. of this
C. We turn now to a discussion of the significance, possible as to Act, violation of the Sherman of the fact competitor that Consolidated has been structural steel fabrication the manufac- pipe. ture of The same tests which the legality measure of vertical integration by acquisition applicable are also acquisition competitors or similar identical lines of necessary merchandise. It is first to delimit the compete market in which the concerns and then determine the extent to which the are in concerns If such market. or at results is aimed restraint, unreasonable purchase then the is forbidden In the Sherman Act. determining what constitutes un- restraint, reasonable we do not think dollar volume is in itself significance; we look compelling rather to percentage controlled, strength business of the competition, remaining whether action springs business requirements purpose monopolize, prob- able development of the consumer industry, demands, and other characteristics market. We do not under- prescribe any take to figures by set percentage measure a corporation’s reasonableness of enlarge- ment its activities purchase of the assets aof
528 command percentage The effect of
competitor.25 relative that factor setting a market varies with the placed. is that the point makes the
The
substantial
and
preclude
would
restrain
of Consolidated
and
of other
competition
production
sale
potential
pipe.
and
structural steel
products than fabricated
steel
fact,
by the
adverted
Force is added
this contention
512,
that United States Steel
pages
at
to above
By
plate
while Consolidated does.
does no
fabrication
produces many
Consolidated
articles
fabrication
plate
mention, as
States Steel. We
produced by
now
United
stacks,
tanks,
storage tanks
boilers, gas
examples,
smoke
the war activities
barges. Attention is also called to
of its
shipbuilding
as indicative
Consolidated
steel
competitor.
noted, pp.
have
500-
as a
We
potentialities
government
was under
501, supra, that this construction
any acquisition of
financing.
agree
We
that
direction
competi-
potential
eliminates
fabricating equipment
some
facilities.
acquire
or
such
anyone
might
from
who
own
tion
position
poten-
too, with the
agree,
government’s
We
non-competi-
producers
presently
tial
acquired
possibility
as well
tive articles
production
for the
may
facilities
be used
the future
may
taken
competition with others
of new articles in
any acquisition
weighing
effect
into consideration
on restraint of trade.26
of assets
however,
into
government’s
takes us
argument,
ship
situations.
construction
speculative
highly
purposes
enterprise undertaken at
war
America,
2d
United States v.
Co.
Compare
148 F.
Aluminum
Rostow,
supra,
416, 424;
7, tables, p.
also
Handler,
245. See
note
Progress, 14 U.
A
Instrument
The New Sherman Act:
Positive
Chicago
L. Rev.
575-86.
Co.,
214;
United States v. Southern Pacific
259 U. S.
Reading Co.,
v.
We conclude that in this case the has failed to prove that elimination of competition between Con- solidated the structural fabricating and subsidiaries of United States Steel constitutes an unreasonable restraint. If we make assumption the doubtful that United States expected Steel could be in the future to sell 13% the total of structural steel in the Consolidated trade area and that exрected Consolidated could be to sell 11 we conclude that %, present where we have the unusual conditions of the western steel industry and view of the of this as developed facts case at pages of this it opinion, can not be said there would be unreasonable restraint of trade. To hold this does imply that acquisitions additional fabricating facilities for struc- tural steel would monopolistic. not become Notwith- some standing differences as to the business of Consoli- dated and United States in respect Steel to the character steel products structural by each, fabricated there is heavy light both between the two for Fon- developing. is industry The western
work. steel making producers are Geneva as well other tana and steel so larger supplies of rolled for fabricators available eastern becoming dependent on West is less in view of opinion, moreover, suppliers. We are of 502-503) (see pp. the number of West Coast fabricators compete ability fabricators to out-of-the-area specialized character structural because this designs, production to orders regard permissible. competi- We likewise conclude elimination (a tion and National Tube between Consolidated an unreason- subsidiary) does not constitute time of contract Competition able restraint. at the *30 to diameter for oil large pipe was restricted the sale only gas 518, supra, see 516 to and the pipelines, pages competition pipe in the that would record indication in the in a broader field in future contained exist proof specification, or that Consoli- suggestion, without expan- or through technological dated advances business produce pipe types. a wider sion, might range of sizes will enough persuade purchase is not us that the This pipe. show that unduly restrain trade The record does each three instances Consolidated and National Tube supplied pipe pipeline. for a new It is clear that these line in a pipe by contracts were obtained Consolidated as to national given nothing seller’s market. We are production pipe oil or gas trunkline the relation by National Tube to this pipe sold Consolidated and production. appellees’ The government does not contest that pipe purpose Consolidated for this is sub- statement stantially pipe, more than and in the expensive seamless pipe advantages that showing absence of welded has pipe compensate over seamless for the increased cost or production may expected that Consolidated’s costs an decline with in volume, increase it not seem to does us that it has been shown that competition this field parties between the to this contract is substantial that so its elimination under these circumstances constitutes unreasonable restraint.
The government cites four antitrust cases involving support railroads to its argument that control one competitor over another violates the Sherman even Act, though percentage compete of business for they may be small.27 appellees cases from cite this Court and lower acquisition by courts which competitor one of another was held not to violate the antitrust laws.28 stop We do not to examine thоse cases to determine whether we approve would now language either their their holdings. The factual situation in all those cases is so dissimilar from presented here that they furnish guidance little in determining whether the which will be eliminated through purchase of Con- solidated is injunctive sufficient to warrant relief requested government.29
III.
turnWe last to the allegation attempted monopolize States Steel has production and sale of fabricated steel in the think market. We the trial court applied too narrow a charge; test to this even though *31 27 United, 214; States v. Southern Co., 259 U. S. United Pacific 61; States v. Union 226 U. S. United States v. Read Co., R. Pacific ing Co., 26; 253 U. S. Northern Securities Co. v. United 193 States, 197. U. S. 28 291; International Shoe Co. v. Federal Trade Comm’n, 280 U. S. v. 417; Corp., United 251 U. S. States United States United Steel 32; States v. United Shoe v. Machinery Co., 247 U. S. United States 288; 47 2d v. Re Jersey, Standard Oil Co. New F. United States Supp. 11 F. public 117. Corp., Steel 29 Handler, supra, See note at 269-71. it1,§ under may be reasonable restraint effected by monopolize to forbidden attempt may constitute To shown.30 monopolize may 2 a to be specific if intent § long government recites specific intent, that show Steel, argues history acquisitions United States light in the acquisition when viewed present that specific intent the existence of history that demonstrates monopolize. to this Court held Although 2 through the § Steel had not violated may we concerns, formerly independent of 180 acquisition eight acquisi well as to to acquisitions look those of United from 1924 to 1943 to determine the intent tions acquiring States Steel in Consolidated. however, to but only acquisitions,
We look not
those
acquisition
government-owned
to the latest
also
—the
We
is of
plant at
think that
last
Geneva.
the intent of United States
significance
ascertaining
The bid
United
acquiring
Consolidated.32
emphasized
impor-
plant
for the Geneva
States Steel
market
finishing
tance of
facilities to assure a
erecting
production,
weight
for
think it a fact of
Geneva’s
we
upon the
many
other bids were conditioned
erecting
making
lending money
grants
objection
at no cost
No
such facilities
to the bidder.
pro-
indicated
it
interposed when United States Steel
mill
posed
$25,000,000
reduction
spend
erect
cold
objections
at
and it is doubtful whether
could
Pittsburg,
proposed
raised if
States Steel
build instead
United
buy
a competitor fabricating
facilities similar
possessed
given
to those
Consolidated. The
reasons
purchase
Consolidated and
for the
United States Steel
involved seem not to involve
sale
assets here
Griffith,supra,
United
v.
note
Corp.,
States United States Steel
v.
We have dealt objections purchase with the to this because of the producers exclusion other steel rolled from supplying that product Consolidated’s demand for alleged because restraint involved in trade extension United fabricating States Steel’s pipe commerce. It has been treat necessary to these arguments separately so as to figures isolate the facts and objections convince us that these do rise to the proving level of a violation law. only It need be that we have also added considered the various items of objection in the aggregate light of the charge of figures for 1901 and 1911 taken are from United v. States United Corp., States Steel Fed. 67. 34The unchallenged record includes an showing proportion table production ingots total casting national and steel for through attributable from 1901 It taken reports from the statistical of the American Iron and Steel may Institute and United saying States Steel. It be summarized irregular it shows an reduction over less than 60% 33-1/3%. *33 view, of point But even from monopolize.
intent to proposed us the persuaded has the in the Sher- public policy as stated violates our contract man Act. is District Court affirmed.
The judgment Black, whom Mr. Justice Douglas, Mb. Justice Rutledge con- Murphy, Mr. Justice Mr. Justice dissenting. cur, has important antitrust case which
This is the most because years. important Court in It is been before the power monopoly of way growth it reveals of —the Act was at which the Sherman precise phenomenon of evolution of pattern Here we have the aimed. Little, independent gobbled units are trusts. great independent is driven by At times the up bigger ones. At times number any and surrenders. other wall to or appear why reasons” sale of “sound business If acqui- be made.1 merger with the trust should they prevent given mergers frequent are that most reasons overhead, efficiency, sales and adver promote waste and reduce dilute Motives, tising costs, spread risks, Compare, Mergers, New New etc. Week, 1945, 68; p. of Business Units: Business Nov. Growth 10, 1946, News, May Shortages, United Effect of War and advantages illusory long p. largely been 48. But that these are has Medium-sized, recognized. See, g., Efficiency Large, e. Relative (TNEC 1941) 128, 132, Monograph 13, pp. Ill, Small Business theory forcefully exploded never than Bran- 398. The more Bigness: déis The Curse of argument seriously only
“The that has been advanced favor private competition waste, while monopoly is that involves efficiency. monopoly prevents argument This is waste leads essentially competition negligible. unsound. The wastes of are superficial efficiency monopoly economies of are and delusive. The monopoly temporary. at the best “Undoubtedly activity competition human involves waste. What among greatest democracy obvious does not? The wastes of are wastes, democracy outweigh compensations we but have far predatory practices sition were the result restraints Schine trade, the trust be required disgorge. could Theatres, States, Chain Inc. United S. But v. 334 U. impact on economy future and on the is the though gentle- same the trust was built in more manly ways.
We here problem have lesson bigness. Its should by now have been burned into memory our Brandéis. Bigness The Curse shows how size can a men- become ace—both industrial and social. *34 It can be industrial menace gross inequalities against because it creates exist- ing putative or competitors. be It can a social menace— that waste and make it more efficient than is absolutism. So it competition. relatively insignificant. The waste is There are wastes of develop, which do not but kill. These the eliminate, by can regulating competition. law and should “It may is true that the in unit business be too small be efficient. may large It is also efficient, true that the unit be too to be and this no monopoly.” is uncommon incident of P. 105. monopoly
. private industry . no in yet in America has been by efficiency attained No superior alone. business has so been competitors processes in its of manufacture or of distribution as solely by to enable it to superiority.” control the market its reason of P. 114—15. Trust,
“The apparently while free from the coarser forms suppressing competition, acquired of control of the market through greater efficiency, by up existing buying plants but particularly supplies prices, by controlling ore at fabulous stra- tegic systems.” transportation P. 115. efficiency monopolies, established,
“But the if of even would not justify community reap their existence unless the should benefit efficiency; experience teaches us whenever trusts have wholly developed efficiency, their fruits have been absorbed almost efficiency they the trusts themselves. From such have devel- gained oped community substantially nothing. in- has For Trust, efficiency. . . corporation reputed stance: . The Steel high prices industry it in maintained are matters knowledge. years common In its less than ten it accumulated for paid merely representing shareholders or out as dividends on stock water, $650,000,000.” Pp. over 120-121. of prices Control prices.2 of its control
because econоmy. on our leverage is industry powerful the steel price of hundreds price of steel determines For the large price level determines Our of other articles. depression or prosperity we whether have measure —an should scarcity. or Size economy of abundance In analysis, final size jealously be watched.3 therefore of men power a handful measure of the steel is the utilized with power can be economy. That over our dangerous. or it be It can benign can be lightning speed. it should Sherman Act philosophy govern- power develop tends to into not exist. For all should economy Power that controls ment in itself. representatives people, elected the hands of oligarchy. Industrial not in the hands of an industrial It should be scattered power should be decentralized. people will many into hands so that the fortunes caprice, political on the whim dependent not be self-appointed of a few prejudices, stability the emotional respect- they vicious men but men. The fact that are not philoso- is irrelevant. That is the able and social-minded *35 It is founded command of the Sherman Act. phy and the private a theory hostility on to the concentration power great a only hands of so people have it. should this lesson in United v. United States forgot
The Court Corp., States Steel United States 417, U. and in v. 251 S. 2 Large, Medium-sized, Busi Efficiency See Relative Small (TNEC 1941) Monograph 13, p. 132. ness against original In 1911 when suit States antitrust United formerly already instituted, company Steel was had absorbed independent v. United concerns. See United States States Corp., 55, 223 F. 162. then it absorbed least 8 additional Since has at independent companies, including prior which to 1930 Columbia only operated independent producer an and maintained the integrated operation steel west of the Rockies. Co., The Court S. 693. Harvester 274 U.
International Steel to States it allows United it when today forgets industry tighter around wrap its tentacles the West. (perhaps legiti- up dressed acquisition
This can the demands to meet expansion in terms of mately) superior as a result of is growing a which business under But test management.4 enterprising However the deeper. Sherman Act strikes purchase is a plain. is It rationalized, the effect may be which of a market for for control control, purchase for' but compete past had to has in the United States Steel wants left to the uncertainties longer it no This in effect may engender. the West competition in Con- acquiring purpose that its It states it concedes. part of Geneva’s of a market is to insure itself solidated falls demand products when of rolled steel production off. irrevocably eliminated never more
But is indus- for whose business the customer buying than of Consolidated The business try competing. has been competi- annually. The $22,000,000 around amounts to $5,000,000 year. over purchases by Consolidated are tive $5,000,000 of say that possible I is do not see how it minimis. is not de plainly It immaterial. commerce is 1 of the which § of the restraint And it the character af- the amount commerce illegal, brands Act as Lowry, Montague & Co. 38; v. 193 U. S. fected. Co., Oil 150, 225, n. Socony-Vacuum 310 U. S. v. Co., 218, v. Yellow Cab S.
59; 332 U. Salt International here, it was it can be said At least States, 396, that volume S. Co. United v. U. insignificant is not by this contract of business restrained *36 Steel does not consider or insubstantial. 1, supra. note See project for aim of this wеll-conceived insignificant, it the If as a market monopolize is to it. it is not insubstantial certainly point from Steel, it is not the of units of the steel struggling view of the western industry. part of the
It is unrealistic to measure Consolidated's mar- by determining proportion its of the national market competition is no safeguarding ket. There pro- theory bigger that the national market less compo- given selling tection will those to the smaller a theory producer That would allow nents thereof. with re- upon enterprises outlets which small absorb depend. outlets, Those marketing stricted facilities statistically point of view though unimportant a market, national could be matter of life and death small, enterprises. local largest comparison market which must be taken for company reached which is actually by is the market purchases In being absorbed. this case Consolidated’s per steel are little over cent of rolled By no standard —United or its market. States Steel’s im- competitors percentage be deemed western —can from that view- material. Yet consideration the case point puts public phase acquisition interest impact A light. the least favorable surer test of the on is to be determined not only by consideration of the actual markets reached it purchases Consolidated but also actual purchases predominantly plates were makes. Its shapes per from 1937-1941. in 1937 cent This was —76 per cent of the total the Consolidated market. That comparison rejected by the Court or at least discounted theory competitors on to Con- presently selling plates shapes solidated can pfobably convert from othеr products. forms rolled But surer test of the effect on competition is the actual business of which
539 know whether deprived. will do not competitors be We from this to recover they sufficiently can be resourceful industry strengthening giant of the hold which this of the in keeping It more now has on their markets. would be of spirit give Act to the Sherman benefits any competitors. to the struggling doubts or intent is, course, purpose
It immaterial hold- may present. achieve the result not have been The Patten, ing of the cases from United States v. S. U. Griffith, to United States 543, 100, v. is that 525, 334 U. S. if or requisite purpose present monopoly or intent is necessary conse- restraint of trade as direct and results of what not hold that vertical quence was done. We need what per se integration is unlawful in strike down order to deliberate, accomplished consequence here. The purchase this sub- purpose calculated of control over here stantial share of the market can no more be avoided Co., Reading was United States 26, than it v. S. U. Co., supra. and v. Yellow Cab I do on com- stop acquisition consider the effect products. petition the sale of fabricated steel prod- market for rolled steel monopoly this substantial an under ucts is itself unreasonable restraint trade 1§ of the Act.
The result well different if Consolidated were might independent an West being acquired by with or merging integrated an producer purpose developing Coast for the in- part then be of an operation. purchase might independent practical plan put together tensely industry western unit of the with sufficient resources industry. of the compete giants with the strength Approval precisely oppо- of this works in prospects dim the west- site direction. It makes industry ern steel will be free from the control of it owns Steel, eastern now that giants. rolled steel plant, per the Geneva has over cent of the acqui- area. This Coast the Pacific capacity of ingot protects there and domination unquestioned gives sition it developing independents in that growth against it purchase. to condemn That alone is sufficient region. *38 economy is and the on impact Its serious is that United States when it recalled emphasized of the entire production rolled steel of the has one-third company I that a say can is The least country.5 economy big is on our leverage tremendous has that enough.6
5 opinion. See note 8 the Court’s giant industry. is the Its manufac “United States Steel ‘greater producers turing capacity com than that all German industry bined. It is more than twice that of the entire British steel In more than twice that of all the French mills combined.’ and iron, ingots, producing pig its facilities for and all addition to products, corporation forms finished semifinished steel and through subsidiaries, 1937, nearly operated owned and some 150 2,000 gas wells, mines, mines, oil and natural 89 iron ore 79 coal some limestone, dolomite, rock, clay quarries, cement and a number fluorspar mines, mines, manganese gypsum ore mine in and zinc Brazil, 5,000 coking ovens, water-supply systems with over several stations, ocean, reservoirs, plants, pumping filtration and over 100 lake, steamers, barges tugs, railroads, river and fire brick plants, producing 12,000,000 By and mills barrels of virtue cement. high degree integration, corpora size its its tremendous position Wilcox, Competition is in a to dominate field.” tion (TNEC 1940) Monopoly Industry Monograph 21, p. in American