*4 SPARKS, MAJOR, KER- Before NER, Judges. Circuit MAJOR, Judge. Circuit judg appeals several These are Court the District ments of conviction of Wisconsin for the Western District 1 of Sherman for violation of Section 2, 1890, 26 (Act July Act Anti-Trust Appellants 1). 15 U.S.C.A. Stat. § of corporations of their and five *5 twelve employees.1 The indictment ficers and 22, 1936, against returned on December twenty-four corporations engaged “defendant petroleum (called business major companies”), three trade oil individuals, prin journals, fifty-six and cipally employees of the defendant officers and corpo 4, 1937, On October rations.2 corporations, the three twenty-three of the forty-six journals and individuals trade trial, brought over continued were jury. before three and one-half months case, At the close of the Govern- its against the indictment as ment dismissed companies, three trade major four court, journals one individual.3 and .The time, verdicts for three directed same parties corporate appellants indictment All named their ab and 1 The “defend referred to in briefs as in are in the names as described breviated distinguished ants” are as follows: dictment Inc., appellants, Company, Socony-Vacuum and we who are now shall Oil designation opinion. make (Socony-V acuum) similar Company (Wadhams) Oil Wadhams Empire companies major Company Refining (Empire) The four oil were Oil Company, Company (Continental) Associated Oil Tide Water Oil Continental Deep Corporation, Company (Pure) Louisiana Rock Oil Pure Oil The Refining Company Corporation (Shell) and and Cities Oil Petroleum Shell Seryice Export Company. Company Refining (Sinclair) The and Oil Sinclair assigned Corporation reason for dismissal as to the Petroleum Mid-Continent (Mid-Continent) the evidence showed the first was charged by Company Phillips (Phillips) activities indictment Petroleum predecessor company Skelly Company (Skelly) carried on Oil Refining Company three, either their to the other The Globe Oil & of a (Globe) hands trustee dur- (Oklahoma) affairs were conspiracy period Refining Company (Il- of or that Globe Oil & (Globe) had been dissolved. The indictment linois) journals appellants three trade and one of as to the Charles The individual Socony- dismissed because of officers was insufficiency their T. Ashton E. Arnott H. legal Pure; Vacuum; McElroy, evidence to con- Jr., R. II. alleged Shell; defendants with the those nect and Robert W. Mc- P. E. Lakin conspiracy. Dowell Mid-Continent. officers also corporations4 gasoline through distribute retail four of through employees. During directly the course of to consumers dealers stations, for directed their own retail service and that granted trial the court verdicts, motions prices in- retail area are in the on of eleven Mid-Western behalf directly substantially by, 22nd on the influenced jury dividual defendants. day with, directly “spot” verdicts fluctuate market January, returned price. corpo- guilty against remaining sixteen thirty rations individuals. defend- alleges indictment companies set July court ant part do not sell substantial On the trial “spot” in- gasoline of their mar- aside the verdicts and dismissed Independent refiners, in- of the convicted kets. dictment as to ten located corpora- fields, oil of the convicted dividuals and one Mid-Continent and East Texas sell most of granted “spot” new also trials gasoline tions. The court to tions,5 sold corpora- and three basis make fifteen individuals and the received therefor “spot” quotations the verdicts which are and sustained corpo- published jury against remaining journals. twelve day each in the market individuals, appellants alleged rations It is and five amounts to less marketed herein. than of all the 5% in the Mid-Western area. The Indictment. that, alleged beginning indictment describes states continuing February, month of Wisconsin, Minnesota, Michigan, North presentation to the date of in- Dakota, Illinois, Dakota, Iowa, South dictment, the defendants combined and con- Indiana, mar- Missouri and Kansas spired together territory ket of defendant Standard artificially the tank-car raising fixing Indiana, known as the “Standard sometimes *6 markets, prices gasoline "spot” of the in Territory” by of Indiana reason of said artificially “spot” said raised and fixed position defendants’ dominant in dis- the prices market gasoline, tank-car of said gasoline in of states. tribution each artificially prices high said maintained and at territory the is described Mid- The Western also as noncompetitive thereby in- levels and Each of the defendant area. prices creased and fixed the tank-car companies, major alleged, so it oil is either gasoline (includ- in the Mid-Western area directly subsidiary through or affiliated Wisconsin) western district the companies gasoline markets in some or all by arbitrarily, provisions reason of the is charged the states of such area. It contracts, large jobber the sums exacted companies that the defendant manufacture money jobbers from with whom such jobbers, and distribute to dealers and con- Thus, contracts were made. the defend- gasoline of all sumers more than the 85% charged are with an ants unlawful alleged jobbers the sold therein. therein, It is in conspiracy combination and restraint more, 4000 some more than sell gasoline trade commerce in in vio- gasoline all the sold retail 50% service stations and lation of the Sherman Anti-Trust Act. com- defendant Then follows manner and means the panies supply of the gaso- more than 80% conspiracy which is effectuated. purchased by jobbers. During line those that, beginning alleged in the month of period conspiracy many and for February, engaged thereto, the defendants years jobbers purchased prior gasoline participated in two concerted gasoline companies from the defendant programs, described as the East supply contracts, long-term buying Texas for the under which programs, and Mid-Continent uniformly provided buying large purchase by quanti- them of gasoline purchased by jobbers should independent “spot” gasoline from ties of in refiners prices be determined Texas published by the East and Mid-Continent fields. journals, namely, two trade independent selling Commerce, refiners in Chicago pub- The The Journal co-conspirators, Illinois, named as programs in are but Chicago, lished and Platt’s Cleveland, published in as defendants. substance of the the Oilgram, Ohio. is programs, alleged, alleged buying companies the defendant f Corporation, Refining are such defendants set Gul Oil The names of Gulf opinion, together Company Company. in this with Texas forth action, Compa- reason for its United States v. Standard Oil court’s F.Supp. ny al., D.C., (Ind.) et 937. representa- agents and Statement of Facts. their gaso- tives, purchased large quantities record, expected, might made to line in accordance with allocations voluminous, to com- it difficult and we find companies and major the various press opinion in an relevant facts nearly purchases such amounted 50% difficulty in- length. reasonable independent by said gasoline of all the sold widely disagreeing creased the views refiners; purchases that such respective parties to what the es- the defendant excess of the amounts point sential facts are. we shall At apart purchased companies would have to be undertake to review what seem participation in said from their salient, subsequent leaving the more to a purchases were program, that said time with material in connection facts arbitrary and uniformly high, made at questions presented. numerous non-competitive prices the unlawful This primarily case is with concerned “spot” tank-car increasing marketing gasoline the Mid- independ- price. It is alleged also territory.)6 (Indictment Western area. refiners, instigation of ent supplied normal chiefly times this area defendants, production of their curtailed gasoline pro- with refined crude oil gasoline. duced in the oil Mid-Continent fields. paragraph gasoline Then follows a refer- Over of all sold 21% “participation of market ence journals.” amounting United States to almost journals alleged gallons, It is five billion over 25% (theretofore named), together amounting nearly cer- five and one-half bil- officers, participated gallons, territory. tain of the lion was sold in this conspiracy, combination and and aided the industry primary oil has four effectuating the same. other defendants (1) Producing functions: crude oil from journals as “the The market are described earth; (2) transporting it to re- agencies chief instrumentalities fineries; (3) refining it into commercial wrongfully through which and arti- products products. (4) marketing prices ficially raised and fixed marketing process usually In three there are paid major companies oil refiner, j units: the obber and the paid jobbers, affected the retail dealer. produces gasoline; The refiner dealers and consumers for *7 jobber purchases fromit the refiner in alleged Mid-Western area.” It is that the lots, tank-car in storage stores it bulk price quoted published in said market plants and resells it the dealer in to tank- journals represented to was be the wagon lots. prevailing “spot” jobbers in to sales in major A company oil one engaged in when, fact, lots tank-car the as matter of industry. produces all branches of the quotations published thus were and stores substantial amounts of crude artificially prices paid by raised and fixed oil, refines a substantial gaso- companies in defendant sells, large line which it and owns amounts programs. gasoline storage capacity refinery. at the operates plants The indictment paragraph then storage concludes Tt bulk with* the mar- keting entitled gasoline and area from which can be “Jurisdiction by tank-wagons wherein it is companies alleged Venue” fendant distributed the de- to retailers. quantities large operates most sold In instances it service sta- gasoline jobbers product tank-car lots to where its within tions at sold retail. corporate o-f the western district of Wisconsin Most at the defendants in this artificially companies. major raised and fixed and non-com- oil case An inde- pendent refiner, prices, petitive and that retail dealers as described in and the indict- ment, engaged largely said district have been consumers re- the busi- usually few, pay artificially prices refining, any, quired to increased ness has if storage plants, operates reason of seldom gasoline combination bulk independent pursuant conspiracy pur- stations. The service refiners companies objectives major in number, ultimate exceed the poses and thereof. far Mid-Western area is also diana controlled about the busi- The referred 22% doing ness, business than described in the indictment was more competitors territory.” was of Indiana At one of known as “Standard territory. leader” in that of the indictment the “market time Standard In- comparatively dependent largely’ small. but depend their refiners who must business “spot” major about on eighteen major companies sell Some tank-car market. companies Mid- required in the gasoline frequently consumed were 85% Western seventy inde- area, purchase independent some while from the refiners pendent Appellants prior buying programs sell time of the refiners 15%. sold gasoline marketed in this hereinafter about referred to. 54% was territory in 1935. Over 25%. Thus the Government contends Indiana, by Texas, sold- Standard period beginning of the indictment at and man” is “middle A jobber Barnsdall. 1936, the continuing through 1935 and lots, purchases gasoline in who tank-car prices at which defendants sold refiners, storage generally owns from directly great gasoline bulk were of their gaso- or delivers plants bulk from which he by prices re- controlled and determined or to service tank-wagons line trucks by independent of a rela- ceived refiners large directly consumers. stations tively gasoline by reason small amount than 4000 were more and 1936 there following: jobbers in the Mid-Western doing business (1) prices all gasoline sold area. jobbers contract the defendants to under re- At was time indictment spot quotations- upon were based market thereto, years prior many turned and for published by journals. two trade jobbers purchased gasoline in most (2) sold prices of all gasoline they tank-car under lots contracts retail the defendants were based period purchase, for a agreed generally spot quotations. the same market gasoline requirements year, of one all their published spot market (3) The refinery. single spot journals the result prescribed of contract the form made by independent sales amounting refiners jobbers purchasing from These them. of all more to not than 7%% form, but varied somewhat contracts area- Mid-Western sold paid by generally price to be virtue concerning the Prior a statement basis what the contracts was buying programs, it seems alleged unlawful quotations” “spot known market history of the appropriate refer to the appearing daily in one both of two period industry during two-year oil journals. The defendant trade indictment, the efforts prior to averaging high and determined “spot” low and stabilize during that time to rehabilitate appeared quotations appellants lay great same, upon usually recognized therein. The contracts stress. the Standard of Indiana as the market territory contained a leader oc- Many are thus pages of the briefs buyer effect provision easy do find cupied again per gallon under margin 5Yz4 justice- and do to condense such a statement *8 posted by price that the service station company. apparent that plainly to both It sides. prices retail station The service prior alleged con- years to for several by company posted followed were also problem confronting spiracy, gravest sell- by jobbers, refiners retailers. over-production industry was the oil by ing price company, as well fixed oil, inevitably resulted in. of crude which others, a all bore direct relation to over-supply gasoline. of This meant a an “spot” quotations during market prices of in often cost decline below period. price indictment normal retail developed production. new fields were As usually per gallon more than the problem Both more acute. 5%<í became “spot” price. actively Governments and Federal State attempting in to- “spot” themselves daily engaged market is determined problems in various day private remedy in solve for transactions sales production, of principal ways, such as curtailment at refineries field. The in prices- fixing of programs gasoline buying of the such market sola independent could sold. The oil refiners and at which crude constitutes Texas, Oklahoma and Kansas- to of of gasoline all sold from States 7%% 5% production. proration limiting major passed laws Mid-Western area. com- produced in oil violation of such panies, storage reason Crude facilities and oil” known as “hot and the gasoline, became disposing own laws gasoline their means therefrom, as “hot than manufactured a more assured outlet the in- upon profitable a This is had little success basis. the keen gasoline.” The states a desire of the will of such Administration the enforcement laws dis- great you constantly at work with * to legal gasoline was result a end. *« * competition. advantage meeting Out price of much grew wars situation By September 29, 1933, price agencies, which concern Governmental per crude oil was established at $1.00 of the great loss to all branches resulted price barrel that was the minimum industry legitimate field. engaged in the throughout period. maintained the Code Secretary approved On one occasion an March, 1933, the Federal Beginning in fixing order prices Government, minimum based states and the interested production the cost of manufacture joined movement industry general in a oil, gasoline petroleum for crude and other practices and eliminate such destructive products, but this order never became competitive healthy restore conditions. April, 1934, amendment to effective. In appellants’ statement The record sustains accomplish adopted the Code was under which an three sought it was attempt supply was made to balance objectives: principal product of the demand refined allocat- price (1) The restoration ing the oil each amount crude which per crude oil to a minimum barrel. $1 process. refiner could The Government price That was minimum at which sponsored programs various where- majority vast of the crude oil wells’of major companies re- contracted to operate. country could independent lieve the refiners of price (2) The level restoration surplus gasoline prices going at above the refinery gasoline at wholesale appears programs these market. oil; is, price “parity” with crude suspended later because doubtful be- which would reflect normal relation legality. “Hot oil” constituted the chief price price gasoline and the tween stumbling block to the success of crude oil which it is manufactured. programs. Refiners the field various (3) The stabilization of retail procure for or such oil less could 35^ spread margin normal at a between barrel, gasoline therefrom and manufacture refinery price gasoline retail and the parity gallon, 24 or while the 2%^ price. price oil was from based $1.00 5^ passed June, Congress 64. Recovery (48 National Act Stat. Industrial Another term finds much use 195) President authorized gasoline.” This is this case “distress shipment forbid of oil the interstate appellants legal gasoline described produced or manufactured by independent who refiners manufactured proration violation laws. On of state dump the market whatever had to President, July by Executive pointed out bring. it would n shipments. proclamation, forbade independ- purchase contract Under this Act Code formulated required him to take all the ent refiner below, prohibiting cost, defining the sales permitted oil which seller was crude parity relationship natural between Any cessation his produce. by law gallon barrel of crude oil and a result the loss operations refinery of refined as 18.5 and au- he was Thus oil connections. of his crude prices for fixing thorized the of minimum gasoline regard- to manufacture compelled *9 products.' crude oil and The President demand. The Government the less appointed Secretary of Interior the the gasoline” the term “distress contends Code, Administrator the it constituted and that misnomer is a Secretary selected of his the members surplus. more than nothing staff, known the Petroleum Administra- 1934, of the Petroleum members committee, July, Board. A the In tive known as appellant on called Board Committee, to Administrative Planning and Coordination Arnott, Marketing of the Com- Code, Chairman administration aid the the was Planning and Coordination addressing appointed by President. mittee Committee, he requested that undertake September, 1933, this committee heading voluntary responsibility of Secretary Interior said: of the “Gentle- price deal movement to men, duty cooperative perform. solemn we have a do, pointing agreed he out This industry to stabilize the oil wars. Our task is necessary would be to eliminate McDowell. The confronting the situation gasoline.” industry oil” “hot “distress Under was meeting discussed at this 20, 1934, July date of Arnott received a was generally gains conceded letter Secretary from the Interior of the achieved in stabilizing the retail market which, reviewing price after wars could not be maintained some action unless many existing in localities and the resultant was gaso- taken with reference to “distress having upon effect which were line.” The Stabilization Committee had market for products, pointed oil out that three meetings February 5th in —one the existing Chicago, would tend to February conditions another on 11th in purposes Chicago, frustrate of the National and the on March 5th in third Recovery by increasing Louis, Industrial un- Act St. going Missouri. into Without employment, labor, reducing standards of detail as place to what took these preventing meetings, and industry. the rehabilitation of the we think what the substance of confer, accomplished Arnott authorized to was was agreed upon was
negotiate
public hearings
and hold
for the that
major companies
purchase
purpose
price
stabilizing
In from
independent
level.
refiners
latters’
October, 1934,
surplus
gasoline
“Federal Tender Board”
prices.
at going market
appointed
Secretary
Surveys
disclosed
surplus gasoline
that this
preventing
Interior
independent
refiners in the Mid-
shipment in interstate commerce of “hot Continent fields amounted to from 600 to
Thereafter,
oil”
oil 700
gasoline.”
and “hot
cars each
Bourque
month. Defendant
or gasoline
shipped in
designated
could
inter- was
surveys
to make
accompanied by
state commerce when
a view of ascertaining
surplus
amount
gasoline
or tender
the Board
certificate
certifying
issued
and furnishing such information
legality
produc-
as to the
of its
companies.
defendant
A mechanical
tion or manufacture. This action had its sub-committee consisting
Jacobi,
of one
effect, increasing
“spot” appellant McDowell,
immediate
and the defendant
gasoline by
Tuttle,
market
appointed
tank-car
assist
dis-
1%^.
stripped
posal
surplus
Tender Board was
of its
gasoline
anticipated
authority by
by
part
monthly
the decision' of the court in
surveys.
It was also a
Refining Company
Ryan,
Panama
the function of
sub-committee
U.S.
meet
to urge companies
S.Ct.
price of oil. crude alleged transcripts ment counsel to use testimony jury before grand Contested Issues. important examination of witnesses. many as- Of the issues and only X. The court committed reversible contested error, signments permitting undertake error in to we shall Government counsel jury argued arguments to make to the con- discuss those which have been which parties. appeals passion, prejudice stated respective the by appellants issues stituted to Such Gov- class distinction to in the affirmative—the and tended induce contrary jury contending disregard as evidence. ernment the record each—are: questions thus discussing Before presented, give think it would well proof I. There a failure was total proposition, recog- consideration to a basic indict- allegation essential parties, nized such about both ment, con- namely, that questions con- revolve most of the price of spired spot market to fix the question: cerning substantive law. The gasoline by under two purchasing gasoline proof Does the a violation of disclose programs high, artificial per Statute unlawful se? prices such agreed causing n journals published in Government, the trade position spot falsely market representing them forcibly presented, purpose and gaso- prices paid by jobbers purchasing conspiracy charged effect of the fix was independent line refiners. control the per and that a combination unlawful preju- II. There was a material and se; while on the other hand it is contended charge of the dicial variance between appellants equal force that on which the indictment and case issues merely the stabilization jury. permitted go industry by the elimination of com- III. The court committed reversible abuse, petitive the admitted effect of which overruling error in motions the defendants’ price, was to raise the was such action verdicts. directed condemning not within statute. strongly upon Government relies the case preju- trial committed IV. The court Co., States Trenton United Potteries limiting (a) improperly dicial error 392, 700, 377, 273 47 71 U.S. S.Ct. L.Ed. jury which the could extent to consider 989, cited, 50 cases therein A.L.R. surrounding circumstances facts and appellants place great almost as while activities, in- (b) the defendants’ Coals, upon Appalachian reliance Inc. v. jury agreement structing the that an em- 344, 471, 288 U.S. United S.Ct. bracing raising prices by group 825, cases and the therein re- L.Ed. controlling amount substantial first the Gov- ferred We shall consider to. commodity per By illegal se. trade position. ernment’s court, effect, doing so directed a against verdict defendants. 2, (Act condemning July statute 209, pro 1) 26 Stat. U.S.C.A. § prejudicial V. The court committed contract, “Every vides that: combination excluding error in the evidence offered otherwise, the form trust con the facts and circum- defense as spiracy, in restraint of trade or commerce surrounding alleged agreement stances States, or for among the several in restraint of trade. nations, eign illegal.” is declared to be VI. The District Court the West- generally accepted, enactment jurisdic- ern District of Wisconsin had'no every placed including combination n try tion to these defendants because the any interstate restraint commerce proof to establish that failed overt Supreme Court until the decisions of committed act was within Western States, 221 Col v. United U.S. Standard Oil District Wisconsin. L.R.A., 1, 31 55 L.Ed. S.Ct. Ann.Cas.1912D, N.S., 834, and United VII. The court in the admission erred Co., Tobacco 221 U.S. States v. American evidence.
821
663,
632,
106,
purchase
wherein
certed effort, agreed
55 L.Ed.
on the
31 S.Ct.
to
promul- “spot”
was
surplus gasoline
historie “rule of reason”
now
market
case,
court,
in
in
latter
raising
price
mar-
gated.
such
former,
ket,
in the
thus
referring
opinion
enabling
to its
them to
increase
U.S.,
page
221
31
179 of
S.Ct. on
market
in
page
the Mid-Western area
648,
663,
was therefore
L.Ed.
said: “It
where
to
55
bore a direct relation
not forbid
“spot”
did
price.
program
that the statute
in-
pointed out
market
n orrestrain the
power make normal and
to
purchase
volved the
of from 600 to 700
by resort-
trade
contracts to
gasoline
further
cars of
per
usual
month in each of the
by
methods, whether
normal
to all
programs.
no
There
be
seems to
otherwise,
accomplish such
or
agreement
dispute
represented
but that this
the amount
courts,
purpose.”
decisions
surplus
say,
supply
ex-
is to
in
—that
Court,
Supreme
thereafter
including the
regular
rep-
cess of the
demand.
It also
divide themselves
may
generally to
resented,
be said
Government’s
according to the
classes,
in
namely: Those
into two
contention,
“spot”
sold on
30%
20%
per
unlawful
held
the restraint
been
has
by
Mid-
independent
market
refiners in the
in
character
and those which the
se
East
Western field
in
and about
20%
open for determination.
remained
restraint
field,
appellants’
according
Texas
imposed upon
In each
the restraint
class
contention,
in
for-
about
27%
18%
object
of attack and was
trade
mer field
in the latter. Assum-
and 12%
upon com-
largely by its effect
determined
is
ing that
Government’s calculation
class, those in the
petition.
In the former
correct,
program called
it means that the
large pro-
such
combination controlled
purchase
near-
of from one-fifth to
industry
give
as to
them
portion of an
ly
by inde-
gasoline
one-third
sold
competition,
suppress
destroy
or
power to
pendent
in
refiners
the former
field and
result that the restraint
the inevitable
connection,
in
one-fifth
the latter.
this
upon
a matter
trade was unreasonable as
perhaps
point
pertinent
it
is
out
class,
power
where
of law.
In the latter
“spot”
sold on
consti-
market
competition
suppress
destroy
or
gaso-
tuted
from
to 7%%
5%
susceptible
shown,
imposed is
the restraint
territory;
line sold in the indictment
determining
investigation with
view
gasoline sold
about
of all
in the ter-
80%
it
reasonable or otherwise.
whether
ritory
by
There
was sold
the defendants.8
sold
the Mid-Western area in
reading
A
the authorities is con
gallons
five
about
billion
rule
vincing that no
and fast
can be
hard
billions,
nearly
one-half
five and
whether
determining
this
utilized
which constituted in
about
in Maple
21%
that case controls. As was said
products
sold
amount of
the total
Flooring
268 U.S.
Ass’n v. United
1936.
and about
the United States
563, 579,
n reasonable
action
im-
concerted
restraints which
seems that the
Thus it
posed
fixing
lay
announcements,
not in advance
involved
there condemned
in the steps
adherence,
therefrom. but
imposed
deviations
taken to
penalties
secure
however,
deviation,
as here
importance,
without
thus
It is of more
and terms
of these
out,
in each
pointed
announced.
It was that
under-
concerted
inafter
al
taking
It is
opportunities
competition was eliminated.
off
vari-
cut
cases
*14
they
competition
to note that
significance
ation
the course
however
so of some
of the
prior
appropriate they
the decisions
fair
to
and
might
decided
be.”
were
States,
v. United
Oil Co.
court in Standard
We think we
have referred
Tobacco
American
States v.
and United
strongest
many
upon by
of the
cases relied
the
case which
Company, supra. Another
Government,
the
and we reach the con
its con
support of
urges in
they
support
clusion that
do
the con
Institute
United
Sugar
that of
tention is
tention that the
evidence here discloses
629,
553,
80 L.
States,
S.Ct.
56
297 U.S.
price fixing agreement
within it
unlawful
dis
that case is
Again we think
Ed. 859.
self.
upon the
present
from the
tinguishable
sugar and
product was
There the
Appala-
We now
facts.
the
come to
case
practically
companies
Coals,
refined
Inc.,
supra,
defendant
chian
v. United
the
sugar processed
imported
appellants
leading
raw
designate
all
the
“the
as
more than
country. They provided
case,”
argument
which the
in the
sugar
the
consumed
predicated
largely
of all
that
trial court erred
80%
agreement
Discussing the
United States.
involved,
in its refusal
a verdict
in favor
to direct
582,
court,
page
56
297 U.S.
appellants.
of the
We think it must be
859,
said:
“The
80
page
L.Ed.
S.Ct.
conceded
support
that there is much
in this
agreement’
‘basic
distinctive feature
appellants’
for
case
There an
contention.
announcement
advance
attempt
was not
remedy competitive
made to
was
any par
maintain
prices,
concert
or a
to
industry
evils in the coal
concerted ac-
any period, but a re
price for
ticular basis
competitors.
among
tion
The defendants
.deviation,
adherence, without
quirement of
producers
137
of bituminous coal in
publicly announced.”
prices
to
and terms
was
as
Appalachian
what
known
ter-
ritory, which
parts
included all or
of four
that
the con
court found
While
territory
immedi-
states.
In this
imposed
re
unreasonable
action
an
certed
ately surrounding area,
the defendants
straint,
that
was
do not understand
produced
production
per se.
total
be unlawful
found to
54.21%
output
“captive”
if
mines
words,
the nature
court considered
64%
industry
well
cer
(those producing
consumption
as
character
deducted;
and evils with which
abuses
owners)
tain trade
exclud-
be
making its deter
industry
was afflicted
ing tonnage
immediately
in the
surround-
U.S.,
297
56
page 598 of
S.
On
ing territory,
production
mination.
the defendants’
*
“*
it said:
page
L.Ed.
Ct.
production.
total
amounted
74.4%
and to fos
abuses
Voluntary action
end
producers
Approximately
73%
competitive opportunities
ter
fair
agreed
pro-
concerted
These
action.
may be more effective than
public interest
Appalachian
Inc.,
Coals,
an
created
ducers
co-operative
processes. And
endeavor
legal
agency
selling
in which
held
exclusive
objectives
have wider
appropriately
may
capital
agreed
stock.
It
all the
was
merely
of evils which
the removal
produced
than
company should sell all coal
positive
law.
does
Nor
infractions
prices
if
the best
obtainable and
all
may
of abuses
the correction
sold,
apportion
the fact that
the same
could not be
business,
produce
stabilize
tend
among
the defendants
a stated basis.
levels, require that abuses
contention,
fairer
was
sus-
the Government’s
an
uncorrected or that
effort
go
court,
should
plan
lower
tained
that reason
alone
them should
to correct
Anti-Trust Act
violated the Sherman
stamped
an unreasonable restraint
competition among
eliminated
themselves,
gave
trade.”
and also
substantially
selling agency power
affect
pointed
the defendants
out that
price of bituminous coal
control
necessary
than
an at-
further
went
many
markets.
defend-
interstate
abuses in-
tempt
to correct
evils
agency
sellirfg
did
contended
business,
page
ants
cident to
power to dominate or fix the
not have
page 643, 80
U.S., 56 S.Ct. on
L.Ed.
* *
“*
market;
any consuming
price of coal in
un-
court said:
would continue to
On the following page,
discussing
of coal
market;
open competitive
prices,
set
effect
it is said: “The con-
increasing
is,
plan by
the sale
found,
that their
tention
and the court below
Appalachian terri-
bituminous coal from
tory
while defendants could not
fix market
promote
prices,
rather than restrain
the concerted action would ‘affect”
here,
There,
the them,
is,
interstate commerce.
tendency
that it would have a
essential,
industry was
problem facing the
stabilize market
raise them*
production.
over
condi-
higher
This unfavorable
to a
level than would otherwise ob-
the court
aggravated
tion
designated
been
what
tain.
establish,,
But the facts found do not
The court
“distress coal.”
show,
any-
and the evidence fails to
by operators and
recited
efforts'
made
produced
effect will be
cir-
seeking to
state
national officials
industry
cumstances
detri-
will be
attempt
remedy
No
situation.
competition.
co-operative-
mental to fair
A
*15
production.
It was found
made to limit
enterprise,
objection,,
otherwise
from
free
themselves,
defendants
as between the
monopolistic
which carries with it no
men-
competition
As the
would
eliminated.
be
ace, is not to be condemned as an undue
said,
U.S., 53 S.Ct.
page 367
court
merely
may
restraint
because it
effect
*
“* *
This
page
(cid:127)thereby page 400 of supra, the court on ed destroy may suppress or even is such as 281, U.S., L.Ed. page 25 S.Ct. competition.” “* * * done and thing said: Coals, Inc. Appalachian United In v. definite: perfectly intended to done be discussed, States, the ultimate heretofore mentioned, directing with the its the court reached factor agents inducing each defendants’ to agreement was assailed conclusion competition bids. refrain from statute, was “abun- violative not compete, defendants cannot ordered to opportunities competitive will exist in dant give they properly but can forbidden to markets defendants’ coal is sold.” where all agreements not directions or compete.” make competition pre- words, fair In other destroyed. rather This test served’ than stated, already unable As we are. applied many, and enforced in if has been of the Govern agree the contention all, cases which our not of the other case ment that the instant involves has called. We attention been make shall per does fixing agreement unlawful se. many. reference a few however, follow, appellants’ con sup Sugar Institute v. United sound that the court erred in tention is ra, page page 297 U.S. on S.Ct. au refusal direct a’ under the verdict question L.Ed. thus stat Inc., thority Appalachian Coals, Uni “ ** * question— crucial ed : dStates, supra. te While such contention whether, prevent effort the ostensible case, support finds think in that we do not competition, the fair resources of impaired unfair here, therein, applied reasoning when *17 competition pre have been —is goes directed requiring to the extent of a abstractly in not but connection with sented not verdict. It must be overlooked various concrete restrictions which the that combination not been case the had below addressed.” decree placed operation. It is evident that the Maple Flooring In Ass’n United v. court, evaluating the effect which the States, supra, page on the court of 268 578 plan upon competition, would have U.S., 583, page 1093, 45 S.Ct. on 69 L.Ed. dealing prophecy ato considerable extent in “* * * (cid:127) view, therefore, said: In our produced in actual results rather than question presented by the sole this record plan operative. if the became when The our consideration is whether the com- U.S., court, page 377 288 53 on exist-, defendants in bination 480, 825, 77 said: page L.Ed. on S.Ct. “ association, actually conducted as * * * however, recognize, We them, necessary tendency has a to cause tried advance of the been the case has competition and undue restraint of direct plan, and that it operation of defendants’ falling commerce within the condemna- necessary plan to test that has been tion of act.” anticipated con purposes and reference sequences In Dr. Miles Medical Co. v. D. advantage without John Co., Park & 220 373, page U.S. Sons. on experience. If in ac demonstrations 408, 376, page 31 S.Ct. on 55 L.Ed. prove operation be an un it should tual agreements the court said: “But commerce, if upon interstate due restraint dealers, combinations between having for plan appear is used to it should purpose sole their petition the destruction of com- competitive oppor of fair impairment prices, fixing are in- upon present rec tunities, decision public jurious to interest and void.” preclude not the Government ord should remedy seeking the be from Again, Addyston Pipe & Steel Co. state of facts.” In other suited such a supra, United in discussing words, open left plain that the court it is purpose o.f the combination under consid- right fur eration, to initiate court, to the Government page on 240 of U. plan operation proceedings if the S., page on ther L.Ed. S.Ct. said: “ * * * “impairment of com fair resulted in the and means of such combina- opportunities.” such cir Under petitive increase for which tion all con- cumstances, not we do think it could be pipe delivery within the tracts n seriously “spot” nature but that market. contended would seem that buying programs determined actually compe- have to be the restraint would increased tition distinguished among from buyers as on as a matter of fact that market. law, doubt, No however, restraint unlawful matter of as a the test should be the upon effect had competition would made and that this determination between the opera- plan in effect which the sellers buyers. and the Assuming, not but upon competition open mar- tion had deciding, competition sell- between the ket. ers and engaged those buying pro- grams destroyed competition one- as to the case, as the instant made, third of sales yet there remain- combination, its ob together sailed ed the pro- two-thirds not involved in the jectives, operation but the result gram which was sold on the market as had period years, of almost two was before theretofore been done. Removing the one- Therefore, argue the court. is idle to it third involved in the buying programs, merely plan as to what intended remained, theoretically least, there operations when its Its ef are disclosed. factually discloses, so far as the record competition, consequent fect fair supply equal to the demand. Under such ly question as whether it constitut circumstances, can not be held that com- trade, ed an unreasonable restraint of petition “spot” on the market was elimi- questions of jus fact which the court was nated. The most that can said is tified in submitting jury for deter buying programs had an effect on com- words, mination. In other the restraint petition, and whether that effect was such imposed was neither lawful nor unlawful produce up- an unreasonable restraint per se, but its character was one of fact commerce, was one of ar- fact. jury. be decided gued by the Government that inasmuch case jury was submitted to the the defendants had knowledge of theory the combination amount of gasoline pur- which would be charged per This, was unlawful our se. chased those not connected with the judgment, require was error such as to effort, they concerted were enabled to raise circumstances, reversal. Under effectively control ordinarily would serve no useful all, though purchased or substan- to enter into a discussion of the evidence all, tially offered as it relates character of the re “spot” market. We do not this ar- believe imposed. straint pertinent, think it is so, gument is sound. If it means *18 however, to make brief' reference to the power control or exercised all of those respective contentions parties of the in this engaged may in industry an be included respect by way of demonstrating that the determining in whether a combination of character of the jury ques restraint was a members, perhaps of minority, some its a tion and not one to be declared unlawful possessed power is with the and raise per se. prices. argument control such an If tois countenanced, then controlling those Our understanding position of the relatively portion small industry' of an of the Government is competition was charged price convicted destroyed could be suppressed or “spot” on the tank- arrangement illegal per point- car market. As fixing se. position The Government’s is agreement thus stated: “The in the Trenton Potteries part ed out both case the major companies of case, purchase Appalachian the Coals is the gasoline and it independent refiners, from of competitive controlling those not combination substan- ly and not on part industry the basis of price of tial which the the an best obtainable and prices, not power the basis arises to control but as here- purchas of ing from stated, the plan concern or tofore where the of the con- concerns whose product purchaser’s best placed operation, met the is in needs, certed effort we price competition eliminated judged largely think the situation must be among the parties just thereto effectively its effect. fully agreement as any to sell at uniform mini power the defendants had the That prices.” mum prices did control is evidenced as the conclusion, argues, principally by This in our judgment, Government can price be sustained gasoline not inasmuch increase in the of as the marked complained 1935, programs during of earlier months of and the included price gasoline “unprecedented rigidity one-third of beginning about sold on price of was likewise a throughout there continuing June, face, commodity prices in marked increase in general year.” On remainder of the circumstance, in- of convincing that at least this rather is a is with crease to natural causes. but considered in connection attributable when many is re- circumstances, large convinc- it is not so disclosed that there in- finers but' For Mid-Western area certainly not conclusive. outside the Act, Connally product so is- stance, territory near passage of the 1935, readily February, many obtainable. cases the which went into effect undoubtedly played prominent part in the to- outside refiners freight from these rate price lev- territory ac- important increase and maintenance points within rate, pri- is disclosed el. At tually with- 1-ess refiners located than from instances, transportation territory. where not We shall relate prohibited, situation, “hot increase argued, was a similar it is oil” details but prices experienced.. cir- competi- Another potential was logic, without against im- pre- cumstance which militates territory tion from outside the portance rigidity price level prices clude the within the ter- raising price out- fact that the ritory arbitrary to high levels. actually area was side higher during Mid-Western province to de within our It is not period than the indictment effect, any, buying pro if cide the worthy also is of note it was within. competition “spot”' grams had which it claimed to commerce, market, upon the restraint arbitrarily raised and maintain- have been just discussed are- circumstances ed at no time above that which in, They purpose. are cited not for such regarded by industry, emphasis that the effect our conclusion parity price. as a produced trade upon competition and Corp., States v. U. S. In United Steel operation was a factual programs in 293, 343, 40 S.Ct. 64 L.Ed. U.S. argument meritorious plenty 8 A.L.R. the court found occasion to pro re and con. Thus the situation both testimony comment of certain wit combination was- futes the idea importance concerning the nesses per con and reinforces our unlawful se rigidity. page U.S., On 448 of 251 40 S. clusion it was a case should: page Ct. on 64 L.Ed. A.L.R. jury have been submitted to “ * * * 1121, it is said: His deduction deciding whether restraint that, through when are constant involved was reasonable or otherwise. period, a definite artificial influence indicated; they vary pe if during such a question which is some Another riod, consequence competitive is a one we have been the basic what related to aphorism conditions. It has become an allegation in indict considering is the danger deception gen there is refiners, independent at the ment that eralities, importance a case defendants, cur instance of certain something -judg should surer gasoline. production tailed their *19 speculation, something ment than more competent any evidence to find are unable deduction, equivocal itself, than a of even production awas of curtailment facts rests on though the it or asserts were ei action part plan of for concerted phenomena not If contradicted. operation. The in or ther Government, its formation production prices were easily re allegation, support of this in implied, the witness solved as dis much throughout says: shows that “The record cussion much literature have been conspiracy period, were made efforts wasted, problems and some of the are refiners cur independent to induce distracting giv now the world would be aft gasoline production, their tail course, compe composing en solution. Of expiration refinery er the allocation prices; but it tition affects is code, system pro allocation under the influences, not, among does more through the duction was continued defend they, register leg than itself definite and Boggs.” nothing find ant which con ible effect.” any appellants way any nects the with part Boggs activities on spect. quittal in this re There are other factors which is ar- it court directed a into the verdict of ac gued entered increase in the Thus, he pointed Boggs. was not gasoline. It is out as to level of party to shown been a the marked to have connect- at the time of increase in Under Another market letter to which our conspiracy. alleged with ed signed rule attention is called is circumstances, P. E. Lak know of in, be appellants. could one of The letter con his activities by which “ * * * tains this evidence statement: if such to, or considered charged refiners of ex- hold their runs down levels in A number defendants. against, the line quota- figure with a recommended re support are cited hibits sponsible body, ‘fact-finding’ examined the future been They have above. tion out-look bright. con- is Current indications think do not carefully and we are, Independent consid- Refiners few properly to be any evidence tain exceptions, will, experi They consist view defendants. against the ered during N.R.A., ence policy by persons conform to a signed letters largely market of holding alleged crude runs down to market de members shown be not mand.” opinion hope or conspiracy, in which the production be reduced. expressed that question as to whether T. At- signed W. of such letters is One program has statement reference to the Nagle. (Nagle kins addressed to F. J. purely specula defendants is one by direction of the acquitted also was recognize gener tion. We the broad rule hoped “I court.) states: The letter ally regarding admissibility followed refinery’s might reduced that this runs be testimony conspiracy charge. on a That Program Committee.” line with the the acts of each statements member by Pro- meant not disclosed who was conspiracy performed of a or made in the are gram Committee. market letters These conspiracy, execution of the are admissible correspondence.” “inter-office referred to as all, against is a rule well established. No weekly They published and contained one of the statements referred to comes mostly “gossip” of trade. A num- within this any rule or other rule of which signed by of them are W. Warner ber J. cognizant. we are Collins, addressed to D. neither of J. From up what we have said to this authority was shown whom point, apparent that this cause must defendants, speak but even reason, For be reversed. and for had, if he found such statements as are additional one already that the views merely represent opin- ex- in these letters ion, pressed have a many direct bearing conjecture, Typical of the writer. specific questions presented, will of such statements are: necessary, same, considering general advocating “Marketers go into detail such as we otherwise production; further reduction would. We shall up, them however, take “Many plants that are overload- in numerical order as heretofore set forth.’ ed stocks have cut down on may Issues I II Contested operations capacity operat- to half or are together. The considered former has to periodically until freely demand absorbs proof failure of do with the to sustain present production. argued allega what to be essential “Suppliers gasoline throughout indictment, tion of the and the latter with refining necessity districts realize the charge between the a variance sues on and the is keeping gasoline production at conserva- permitted the case was tive levels. jury. go allegation in “Reports majority indicate that Paragraph referred to is dictment titled 24 en refiners are still adhering to the allocated “Participation of Market Journals.” refinery operations keep gas- in an effort to alleges journals that the trade named production *20 oline in balance with demand.” in the “have intentionally indictment and So far as determine, able are wrongfully engaged participated it and in the just as reasonable to conclude that conspiracy these combination and set forth in expressions opinion, hope indictment, conjec- and directly this terially and have ma and ture had reference a continuation of the aided the other defendants in ef policy of the pro- same, reducing fectuating the and the unlawful duction that they any plan purposes refer to and effects thereof set forth in effort on the journals defendants. In this indictment.” These are incompetent event prove are charged being agencies and the with chief and nothing. through instrumentalities which the arti- “uniform, arbitrary high, non-com- gasoline at prices of fixed ficially raised are petitive prices.” buying programs af- companies have major oil paid the alleged to have effectuated oth- the means jobbers and price paid by fected the conspiracy conspiracy. Both the They are the territory. indictment ers the Paragraph price alleged precede the means the published having charged with sought connect the 24 wherein it companies as major oil paid the journals conspiracy mar- trade with the “spot” the paid by jobbers price and abet- a manner similar to of aiders be that prices would ket, intending that such appellants’ tors. argument Most under determining jobbers upon by the relied point proceeds upon theory this that compa- the major paid to the prices jour- paragraph ex- with reference to trade the contracts conformity with nies in only nals describes major means which jobbers isting between conspiracy was Government, con- to be effectuated. Inas- at companies. The much as case, we think is not con- this contention of its presentation clusion of tenable, might we shall what in- not discuss testimony was adduced ceded be the situation if means were no other charge to these support sufficient alleged. was case as them journals, and trade dismissed. argument presented under Con- para- this by appellants that argued tested Issue II with reference to a variance rests It is upon means alleges the a indictment similar basis. It is said graph conspiracy indictment, including paragraph means journals, into effect. We with reference to the trade charged was to be carried charges price As we argument. fixing agreement. a this agree with do completed words, appellants indictment, charged it states read the (other agreed price, than with at the defendants charge against published falsely means including journal the trade journals) trade the which price, price carried in- the market as false conspiracy to be this was published, price paragraph jobber effect, preceding argued retailer was Prior to determined. journals. the trade reference to Government, it failed journals had not when to make a trade paragraph the journals, against trade conspiracy and case shifted with the connected been proceeded pur- position theory evidently for that paragraph merely the activities of in the nature .an additional pose. It is prices. Appellants jour- affected the state the the trade specifically charging count involved, thus: “The fundamental differ- situation they were not nals. Without price fixing the market ence between essen- that it was not follow it does (cid:127)but price merely the market is such affecting defendants. charging the other tial in preclude showing as to of the latter as conspiracy. 18 defines the Paragraph charge the former.” a substitute for conspir- alleged that the defendants contains the really gist This statement raising “artificially ed appellants’ argument question on the price the tank-car fixing
(cid:127)and variance. market,” they “ar- ‘spot’ and that ‘spot’ mar- and fixed said tificially raised appellants’ we understand As price of and have' tank-car respect, ket it is the indict position in prices artificially high said paragraph maintained refer ment, including the levels,” non-competitive in violation journals, charges .and trade ence to Anti-Trust Act. The indict- the Sherman and when the Govern agreement, fixing thereto, ment, great detail de- prior paragraph, substantiate failed ment indictment, thereon “spot” necessarily markets—how fined followed of the that no determined, proven and the manner in agreement price fixing jobber paid instead, proof and retailer disclosed an but that affecting with reference to the determined the market merely agreement Paragraph “spot” proof market. 19 commences: of the latter prices, conspiracy charge combination and the former. unlawful “Said not susbtantiate hand, Government, on the other con following been effectuated man- has *21 paragraph following that, with ignoring means.” Then 'and ner tends journals, the description two trade indict a detailed to the follows reference agreement, price fixing programs allegation alleges with the that ment agreement price fixing program argues were made that a purchases in said
831 proven. argument again revolves “(1) product Forced sales of distress around decisions of the court which largely contribute de- substantially to the pressed Potteries in United States Trenton condition of an industry constitute 377, 392, Company, competitive S.Ct. 71 a 273 U.S. evil. 700, 989, Appalachian L.Ed. A.L.R. “(2) An intention ‘to stabilize busi- Coals, 344, States, Inc. v. 288 U.S. United ness, produce or price levels,’ to fairer here- 825. We have 53 S.Ct. 77 L.Ed. through competitive the elimination from a tofore concluded that the Government competitive market of a (such evil prove price fixing agreement failed to distress is gasoline) not unlawful. such as is in Trenton Pot- disclosed An “(3) effort correct such a com- case. also has teries think there been petitive promotive abuse is com- sound importance too attached to much the terms petition and condemned law not un- “price “price affecting,” fixing” and intent, less by reason of its inherent na- employed true test to de- goes beyond ture or effect it the restraint agreement is termining whether an un- competition involved in any removal per se lawful or one character competitive evil and unreasonably open investigation, of restraint is must competition restrains in some other manner depend upon upon compe- effect had than the removal of the abuse.” upon tition with resultant effect trade. hand, On the other the Government competition destroyed, suppressed is If contends fix, that —“A combination to agreement comes the former within raise, or control the market of a com- class; not, if the latter. We within shall modity when possess those who combine repeat heretofore said what we have power fix, raise, or control market respect. in this It is here sufficient important is the conspicu- most has to point out that the distinction do with example type ous restraint. proof charge. rather than the aIf Where a restraint of this kind is estab- compe- power destroy combination has lished, question no of reasonableness is tition, required. is no further evidence If open for determination either court not, then all it does relevant evidence jury.” received considered in should be de- competition has termining whether been Again argument predicated is interfered with to extent of constitut- upon Appalachian largely Coals case is not necessary an restraint. It undue and the Trenton Potteries case. We have whether determine indict- us held case controlling neither here. It per charges agreement ment unlawful true in the former case that the court held se, question answering but before now “[plan] would have a tendency us, so, we assume that it does. That being stabilize market and to raise them proof have of an we but doubt higher to a level than would ob otherwise per agreement not unlawful se is sufficient tain.” also It stated the evidence fail charge. ap- fallacy to sustain the “any pro ed to effect show will be argument pellants’ rests unwarrant- duced which the circumstances of this involved, premise that two offenses ed industry will be detrimental to fair com such is not the case. The whereas statute petition.” pointed out, As how offpnse the one of “restraint defines of ever, the court there dealing with a The courts have not commerce.” created placed plan had not been opera offenses where created two plan tion. Here we are considering a statute, have classified the but offense with placed operation results re quantum proof respect required. circumstances, vealed. Under these it was class, proof In one combination jury question as to the effect which the competition power destroy is suffi- plan operation upon competi fair law, as a matter while in the cient resultant tion and its effect restraint other, proof required as to whether the pointed may of trade. out competition is such as effect con- opinion Harlan in his dissenting Justice an unreasonable restraint. stitute Oil United Standard Co. v. 221 U. argued 502, 530, Issue III. Contested un- 55 L.Ed. S. S.Ct. point L.R.A.,N.S., 834, that the court Ann.Cas.1912D, 734, der this committed re- error in its refusal appel- question to allow submission of versible is calcu motion a directed Ap- lants’ verdict. to render the lated statute indefinite and “ * * * position is stated pellants’ thus: He said: uncertain. the in- *22 kind a different situation or un- different or jectio.n the rule reasonableness of of would, combination, applicable in dis- might be greatest to the lead reasonableness and, reasonable and an between a tinguishing en- uncertainty variableness trade, was not restraint of rea- unreasonable the law. The defense forcement of sonable every error.” be made restraint would case, many there would as the case was theory which different courts, cases, as reasonableness rules is further illustrated jury to the submitted jury- or juries. court What one by the Govern- following the statement court or another might deem unreasonable ment: A court jury might deem reasonable. explicitly repeatedly court “The agree- given might find'a jury or Ohio circumstances as the jury instructed the reasonable, while a ment or combination guilty. a justify verdict which These circumstances might find jury court and Wisconsin jury the that un- agreement combination same the power the that the defendants had (1) find Nevertheless, the decisions reasonable.” they gasoline prices (2) to raise Court, dis- Supreme heretofore the charged as purpose combined had cussed, doubt, opinion, leave no our charged: indictment. The court requiring submission to case was the the defendants, and you “If find that the jury. them, acting in con- those concert with point has to This Contested Issue IV. with the court’s part greater the the trolled jury, charge to the do in the ten sold Middle Western in numerous its refusal instruct well as power price the raise the requested appellants. particulars the gasoline, and that even give endeavor to shall not We synopsis with them persons acting have these knowingly which, charge might engaged in combination tc Rather, great length. expected, was charged raise or to be fix contention, appellants’ fol- shall state we lowed or consumers in the jobbers by the certain admissions made charged in in- area as Mid-Western reference to nature dictment, you then understand that will charge. Appellants’ contention have Sher- these defendants man Act violated may be thus: summarized charged guilty indictment. prejudicial Court “(1) The committed instructing error that was jury it court, repeating “The substance the reasonableness of the defend- consider instruction, charged jury of this acts, and the ants’ facts circumstances power, and defendants had the com- if the them, surrounding only if it first found raising level bined have the defendants did not (a) that prices, spot market then ‘the restraint spot power to raise the level market was as a of law undue and of trade matter ” prices, did not (b) or combine and, therefore, illegal.’ unreasonable purpose, pur- that their (c) for that Thus, apparent court’s spot prices only chases affected fallacy as charge involves same incidentally. indirectly and throughout the case. runs which prejudicial committed “(2) The Court urged by theory court subscribed to agree- by instructing jury that an error proven agreement the Government constituted (cid:127) involving embracing raising ment per restraint unlawful se. distinguished fixing), from the (as contrary. already decided commodity group aby of a con- the case one which should have Since trolling a substantial of the trade solely jury submitted been issue commodity per is illegal se. im of the character restraint concluded, necessarily posed, as.we have Government concedes that charge, embracing the court’s follows that jury upon was submitted to -cause inapplicable, conclude is theory theory agreement that the condemned reversible error. per se. It states: “These in- unlawful shall structions, Contested Issue V. We Trenton Pot- like those in the proferred general reference to the case, jury make withdrew from teries appellants argue the testimony court question illegality as to the further un- Appellants and, to admit. erroneously refused refused the restraint as in reasonableness testimony in case, place three refusal to grant Trenton Potteries classes, which, forth as follows: setting
instructions tests *23 833 ** '* peculiar to of testimony the facts “(1) not offered to im- show ap- munity, is restraint bearing upon to which the but as purposes the business the after the objectives and and defendants, before plied; its condition and as * * * his- imposed; such, The had a bearing, think, upon restraint was we the is- restraint, believed to the evil sue which tory of the should have been submitted to particu- exist, adopting jury. reason argument of the Govern- sought remedy, purpose lar end ment that this class evidence should be ’ * * * excluded, attained because it was calculated to con- jury, fuse the is not tenable. The test is prove showing facts “(2) Offers to its relevancy to issue. it We think is Administra- that Federal Petroleum true, argued by Government, encouraged cooperated with the tion much of the refused testimony was they activities for which defendants cumulative nature. At any rate cer- there convicted, upon pur- bearing ‘the were is tainly testimony much in the record rela- pose sought or end to be attained.’ tive to the history of industry, the oil prove showing facts ‘the “(3) Offers evils with beset, which it was and efforts effect,’ restraint nature made the industry and various Govern- specifically the fact that the of gaso- agencies, mental State, Federal and line southwesteren tank-car markets alleviate the situation. The trial court the Mid-Western area were not necessarily must be vested large with a high non-competitive artificially dur- amount of discretion in a situation of this period.” ing the indictment all, kind. After even conspiracy trial Objection testimony to this was can not go on forever. made the Government and sustained charged defendants were largely court that “the theory raising “spot” on the of the unreasonableness restraint” market and in the Mid-Western area an in issue. No doubt if had the case been high artificially non-competitive level, theory, tried as we think it any evidence disproving directly been, should have ruling of the court disprove tending allegation should with reference to the admission of much have been received. testimony would have been differ ent. rule proper as to evidence to be Contested Issue VI. Under is considered, where the argued reasonableness of sue isit that"the court was without issue, the restraint is in jurisdiction. is an clearly The Sixth Amendment to the nounced in City Constitution, Board U.S.C.A., provides Chi Trade a trial cago 231, 238, United v. “by impartial 246 U.S. jury an of the State and 242, 244, 38 683, S.Ct. 62 L.Ed. Ann.Cas. district where crime shall have been “* ** 1918D, is 1207. There it stated: committed.” question To determine that ordinarily the court must concede, Appellants think, properly we peculiar consider the facts jurisdiction that the court would have if ap business restraint (a) evidence established that the con- plied; its condition before and after the spiracy in violation of the Sherman Act imposed; restraint was the nature of the entered into within Western Dis- effect, probable. restraint and its actual or Wisconsin, trict of or if (b) the evidence restraint, history evil be established that someone or more of the exist, lieved to reason for adopting the co-conspirators defendants or of particular remedy, or end pursuant committed an act overt sought attained, to be are all relevant within the conspiracy Wisconsin. There is Western District of facts.” proof no establishing found, under “a” so if it authority jurisdiction Under the of United accept Corp., appel- be under “b.” also States U. must lants’ two tests for v. S. Steel 251 U.S. 446, 447, 40 determining S.Ct. 64 L.Ed. whether A.L. overt, (1) R. an viz.: Was the Fosburgh California act act in & conspiracy?; Sugar Co., Refining Cir., pursuance and (2) Hawaiian 29, 36, 37, act tend to achieve F. Did it would seem advance evidence objects conspiracy? competent, otherwise As show cooperation contention, appellants’ understand with the defendants officials, the indictment of Government either to the effect contains in in charge approval agreed carrying or in program out the Wisconsin, question, should contract nor that any make admitted. This class buyers They with reference agreement *24 price in their disad- thereto, did increase would tobe that each defendant and what them, vantage. Advantage any, could of individual if to in matter Wisconsin was price in only through term come an increase in to regard any determination without they and territory expected the in any agreement. In other obligation of sell, including did Western District upon the words, the by relied the acts that object of the the say To of overt, Wisconsin. acts of the as were price concerted raise action the was individual in their defendants acting without, “spot” the time, the same market at representative or as capacities and for not that a further saying there was ob- action. engaged in concerted of those price jective increase of the sales argued, situation, it the so —the being Such illogical their be customers—would nei- in Wisconsin were the acts committed contrary to common sense. nor to achieve pursuance in tended ther conspiracy. objects the advance the In the Trenton Potteries case the de- opinion, argument, predicat- in our This fendants were tried'in a than district other premise that the sole false ed the originated. conspiracy that the in which conspiracy, charged, purpose the was court, The question in the discussing “* * * price gasoline on the raising of the the “spot” jurisdiction, record is said: indictment, after the market. replete with the evidence of witnesses (cid:127) “spot” allegation with reference defense, prosecution including both market, thereby “and have in- continues accused, some the who testified without fixed tank-car tentionally increased and the the contradiction to course of business gasoline contracted be sold prices of to. district, price the within the circulation of commerce as sold in interstate afore- bulletins, the-making of sales there area (including in the Mid-Western said some of the or- members association Wisconsin).” District of the Western respondents. secretary' ganized testified programs described buying each the that, association, acting he alleged indictment, up- it agreed “as the effected sales within district. the All major companies, oil defendant by said on all with juris- these were overt acts sufficient purposes and the effects unlawful requirements.” dictional rather aforementioned.” plain It seem Appellants distinguish that case from “purposes among and effects” present one, case, “In thus: designed price one was "raise price required sales at a set were area, as in the Mid-Western well gasoline agreement very terms of the acts were Assuming, ap- “spot” on the market. directly obligation carried out the contend, was no evi- pellants there agreement. only obliga- Here the any or acts at any dence statements agreement tions created related to meetings the concerted ac- of tion was wherein what done in was be to, agreed reference to sales non-integrated gasoline from the refiners area, or ref- the Mid-Western within competition and in the restraining place than any erence spot tank-car market.” fallacy market, still the con- “spot” think ignores object is that it this distinction that was irresistible clusion is purpose of concerted action in plan price the terri- to increase object instant case. If of defendants’ gasoline was sold. We tory wherpin concerted action was to increase the said that their not think can be sole do object Mid-Western area (in- stabilizing or raising was the District of Wiscon- cluding sin) Western price. object. “spot” That objective accomplished other, perhaps im- greater The portance price, increased by sales at such it is our defendants, to increase that under decision conclusion price in the territory which their case, Potteries Trenton sales would though Even there be was sold. constitute overt acts. proof of this second evidence direct shall not discuss numerous point ir- We au- this circumstances objective, all the appellants cited under thorities To think resistibly to conclusion. dif- say is sufficient to that we point. equivalent ferently would of be- be and do not are even read them believe lieving engaged the defendants were certainly controlling. We, not persuasive, philanthropic Otherwise, endeavor. in a therefore, conclude that the District Court objective be their could what “spot” jurisdiction. on the market? increasing argued shown to conspiracy Contested Issue VII. a member of point erred in speak. under court any authority that the shown to have than the admission of More convinced, however, evidence. We are error introduced, three-fourths 650 exhibits respect committed in this not have could af- of which were offered It would Government. fected the result of the trial. error was surprising if some Contested point Issue VIII. Under this not committed in the admis passing urged it is denying court erred in sibility of such a of exhibits. To volume appellants several motions of for a new *25 enter into a discussion of the various er trial. The Government contends under assigned respect unduly rors in this authority the of Glass Works Fairmount opinion, extend even this now is which Co., Fork ah, Cub Coal et 287 U.S. quite long. objected The documents to 77 L.Ed. S.Ct. we are without letters, largely telegrams consist of authority to review the action of the Dis- reports market obtained from files of the respect. trict Court in this Under the the- general the defendants and referred in a to ory upon which the case was submitted to communications”; way as “inter-office jury, power the rarily the to raise arbit- is, one communications officer from or artificially important was an employee employee or to another officer of element of By the case. verdict the of main, corporation. they the same In the guilty, jury the found that issue in favor charge that the defendants induced the (1) of the Government. When the case was independent production, refiners curtail to submitted there among was included the de- programs (2) the were for the buying fendants, Company the Standard Oil of purpose price gasoline, of restoring the (and Indiana others important). here not that, price rise the market after the (3) alleged: The indictment “Said area com- programs gasoline, the of utilized in were prises gasoline the territory of de- preventing of “dis- dumping the Indiana, fendant Standard of and is some- market, gasoline” (4) tress the times known the Standard of Indiana companies re- employees of certain the territory by reason of defendant’s dominant garded gasoline” the amount of “distress position in gasoline the distribution of purchase asked to been which each states.” largest said It was the of the Tank-car by members Stabilization company doing business the in Mid-West- share,” Committee, as “their “allocated” area, ern such was the leader. as “assigned” or to them the com- and that period During the indictment its business obligated pur- panies to make such were to amounted about the total. 25% chases. Heretofore have discussed we the purchased independent from the refiners sought prove it was by evidence which from by the sold 6% 10% production curtailment of of gaso- the the guilty After the them. verdict of as to all line, competent and found there was defendants, including Standard, the the the support charge. evidence the We court motion for new trial allowed appellants understand that concede that argued by appellants latter. It is the effort, resulting buy- concerted programs, in the power by jury found that the included purpose for was of re- ing by That, possessed the Standard. for storing the the therefore, by finding there has been no preventing gaso- the “distress appellants possessed jury req- dumped upon being market. line” power. question uisite becomes one appellants do think are in a not now partner whether Standard as to complain evidence, position to even alleged conspiracy adversary or an admitted, though improperly proved which competition. import- engaged in Thus an prove that tended to is now or which con- legal question presented. ant said we ceded. What concerning heretofore circumstances, however, Under the evidence relied by the authority our not determine either need charge prove cur- question merits of the reason applicable production largely tailed moot has because become the case testimony allocation concerning grounds. reversed other must be obligation buy gasoline.” “distress A the exhibits leads us to think review IX. Contested Issue The essential instances in some the statements con- point alleged under concerns error represented merely opin- therein Jury testimony tained the Grand manner employee. instances during ion of an the trial. The witnesses was.used by employee were employees made not largely statements Government were Upon was the in each instance witnesses defendants. and officers basis that the witnesses him from minutes or un- same that read to hostile testimony, Jury thus reinforc- read of his friendly, Grand for the Government counsel testimony given witness and what extensively witnesses numerous thereby being advantageous defend- testimony given be- purported be their ants, purpose, so is devoid of Jury merit. the Grand fore memory. claimed, refreshing their Notwithstanding repeated practice gained of the extent Some idea procedure complained of, Gov- employed by appellants’ practice * “* * ernment now states: not disputed Govern- (not statement single testimony by any given item of wit- minutes Jury uncertified ment) that Grand stimulating (1) ness which was elicited approximately were read referred to on atten- calling recollection witness’ thou- ninety occasions more than testimony grand (2) jury tion to his transcript of the record sand lines testimony covered *26 those quotations from of verbatim consist According given.” to witness otherwise They to witness minutes. were read the admission, it seem that the ef- this would and, although de- jury presence the the wit- fort to refresh recollection of the requests repeatedly fendants made complete Nor does nesses was a failure. inspecting examining such privilege of minimize harm calculat- admission the. this minutes, request instance in each their procedure. result from such toed denied; permitted to nor was the witness testimony theory use While such It was the the them. see examine erroneous, trial, damaging ef- per- manner was the during the of the Government state- by keeping minutes fect was its use in connection with here, sisted by witness, inspec- for the Govern- ments made counsel hands of the out of insinuated, repeatedly by in which it was could ment tion of the same the defendants argues prevented. actually charged, that: witness The Government not if “A be made between deliberately falsely. distinction must is testifying refresh prior use statement to recollec- jury have believe that the could difficult to be- impeachment and use for tion and impression. jury received other use to refresh recollection tween its its opening coun- statement of was told in the pres- where affirmative evidence use as Government that certain wit- sel for the revived.” recollection cannot be ent Government, because nesses for defendants, purpose discussion, with we connections this For the testify greatest stress accept contention “under the the Government’s shall Jury way out.” were used he finds no other Grand minutes and because witness, purpose refreshing the During examination of one solely for the “Your Hon- witness. It follows that made statement: this recollection of the counsel or, distinctly surprised is for us to determine is no occasion the Government there the pointed testimony, validity is in direct con- of the distinction as this Government, testimony or what the rule given out before to tradiction circum- inspection might be under asks Jury; and Government Grand witness, stances. and to con- permission lead testimony Jury him his Grand with employed front for the er- procedure That the his recollec- purpose refreshing think, roneous, is out we borne typical forth few authority; it was We set and that tion.” great weight of in con- Government made prejudicial, we have no comments doubt. unfair and testimony.9 testimony given with the use nection suggestion that is 9 not satisfied “The Government we now that declare to Court “We completely answer, frankly sur- surprised and is still of this the answer are prised, very good would like to cross-examine witness, and I reasons have and we surprise, if witness. assert which we will for that you when those true permitted “And answers do so. questions? response gave Honor, them in to those is dis- “Your testimony? surprised by tinctly testimony, is correct “Well you testimony giv- with the “How do reconcile contradiction direct you you testimony you say grand jury; remember the Gov- before the en .and wit-, Jury? gave permission Grand before the asks to lead this ernment you grand true when ness, “And were those answers him confront with his and to ** * gave testimony purpose ? jury them re- freshing “He not now admit that he talked does recollection. his
837
proper
only
circumstances
considering
we
not appearing
surface,
As
are
on the
may expose
testimony
used
procedure
all
where the
that detracts from the
memory
weight
refreshing
testimony.”
purpose of
With reference to
it,
put
witness,
revive some
holding
counsel
“to
decisions
contrary,
only
memory,”
shall
it
flagging
we
refer to
states:
decisions, however,
“These
applicable
minority,
thereto.
a small
authorities
principle
support
Contrary
them.”
to the rule
Cir.,
States, 5
In Morris
United
announced in
States,
Lennon v. United
be
the court had
F.
Ann.Cas.
supra, the
states
author
that the rule should
present
fore
a situation similar to the
it
apply even where the memorandum was
one, except that
written memorandum
consulted
brought
before trial
from which the
refreshed his mem
witness
the witness into court. The Government
ory
page
was shown
him. The court on
argues,
“* * *
logic
think,
without
and with
F.,
126 of 149
said:
We under
little,
any,
if
support,
authoritative
stand it to be the universal rule of evidence
rule,
announced,
ap-
to be
country that,
where
the courts of this
plied used
documents
the witness
permitted
witness is
to examine and
re
Apparently
while
the stand.
the trial
paper,
his
fresh
recollection
fact,
opinion.
court was of the same
inspection
be tendered
the other side for
reading
the minutes to the
just
soon as
has been
identified.”
witness,
placing
rather
than
them in his
Cir.,
In Lennon v. United
hands, was to
application
circumvent
F.2d
witness
refreshed his
*27
support
The cases cited in
rule.
day
by
recollection the
before the trial
theory
the Government’s
are not convinc-
memorandum,
reading a written
and the
fact,
point.
are not in
—in
court
refreshing
held that inasmuch as the
Mullaney
In
States,
Cir.,
v. United
9
produced
court,
material had not been
638,
82 F.2d
the court sustained the re-
party
opposing
was not
to
entitled
an
permit
to
fusal
the trial
opposing
court
inspection
said,
thereof. The court
on
inspect memorandum,
counsel to
“* *
a
but as
*
page
20
only
494 of
F.2d:
It is
out,
points
court
the memorandum was
paper
where the witness uses the
to re-
by
not used or referred to
the witness.
memory
fresh his
while on the stand that
States, Cir.,
In Metzler v. United
9
64
compel
right
produc-
there exists a
to
203, opposing
F.2d
counsel was refused the
writing
inspection.”
(Cit-
tion
inspect
right
the Grand Jury testimony
to
ing cases.)
prosecuting
hands of the
attorney,
States,
In Little v. United
Cir.,
8
F.
93
but
there
witness had
refreshed his
406,
401,
page
2d
on
the court said:
“It is
memory,
Jury
from the Grand
not
minutes
generally accepted
a
rule of evidence that
personally
*28
speech
highest officials in
a noted son of Wis-
the
delivered
of
wish and desire
lawyers
prosecute
jury,
only, gentlemen
come out here
“Not
against
them, against
prosecution
their
the Govern
this case
wish-
actuated
this
injury
Secretary
Depart-
es, or that
of
to the
the
the
of
done
ment because
public,
it is a
us
of the fact that
ment
the Interior would allow
to do
but because
group
influential,
thing
it,
if he
done?
a
didn’t want it
that
terrible
corporations
wealthy
billionaires should
or
millionaires or
“When combinations
having
money power
power,
con
over the
the financial and
take
take over
trol,
corporations
here, go
power
prices,
to make
have
out
that
these
and
operate
into
make them.
take
law
their own hands
want
regardless
their business
of the de-
very
employed
lawyers
“A hundred
—the
Government,
sire of the
and without
very
Bar,
best
American
cream of
underdog
consideration for
or
people
legal
can obtain—
that these
talent
poor man,
thing
then
do
or
we can
one
day
working night
every
of them
one
going
stop it,
another. We are
our
suggestions
her-
how
red
as to
with
stopped-
forefathers
it before us and left
ring
clear cut
be
across the
can
drawn
country
now,
us
with
as it
or we
this
this case.
issue of
going down into ruin as
did
Ro-
confidently
you,
with
leave it
I
“And
Empire—
man
your
you
feeling
let
Govern-
will not
that
you
say
“Do
want to
that
the vast sum
and its citi-
United States
ment and the
money
spent by
has been
that
society down.
zens and
payment
here—and not in
Government
you
yourselves,
just
“Now,
do
between
running
lawyers,
into hundreds of
either—
boys
(in-
honestly
these
here
think
get
dollars,
trying
be-
thousands
table)
dicating
counsel
you
case,
be
fore
the facts
should
crusaders,
the enthusiasm
fired with
winds and
men
thrown to the
go clear,
these
should
having given
say,
case
strength
to this
ev-
I
ery
world
and the nation
physical
of mental and
ounce
told that
these combinations of
should be
myself
contributed,
they have,
and I
go
capital
and take
can
out
the law into
trying
also,
men
convict these
rig any
would
hands, and
can
own
desire
was the wish
they please?
you
unless that
why,
If
all
do—
government
highest
officials
along.
you
get
right.
If
I
can af-
will
thirty
forty
the United States?
pay
cents or
or
cents
ford
gasoline,
fifty
gallon
why,
government
a
I
cents
“Tou don’t think
while,
get
too.”
little
once
allow four or five
will
United States
Day
cousin at a Graduation
exercise
Globe Oil
Refining Company
&
(Illinois)
vividly
speech
1873.
there was
McElroy,
and R. H.
Jr.,
is.
which it
portrayed the
of a terrible monster
advent
claimed that
there is no substantial evi-
in the form of
accumulation of individ-
connecting
dence
conspiracy,
alleged
them with the
corporate
prophesi-
ual
wealth. It was
either in its formation or ex-
approaching
ecution,
ed that the time was
when
and that
the court erred in its
be,
rule,
question would
“Which shall
refusal
to direct
verdict as to them.
lead,
man?
men
study
wealth or
Which shall
From a
of the record
arewe
not con-
'
stations,
public
?
intellect Who shall fill
vinced that the trial court erred in this re-
men,
patriotic
or the spect.
educated and
free
corporate capital”?
futile
How-
serfs
For reasons
stated,
herein
judgment
appropriate
speech might have
ever
as to each
appellants
arena,
political
certainly had
been in the
Reversed and remanded.
place
in a
court
Justice.
We shall refer
SPARKS,
Judge
Circuit
(concurring).
complaint concerning
argument.
One
I concur
opinion
in all
given
matters
of
timony
defendants’ witnesses had
tes
except
which holds
shipment
reference
venue
prosecution
of this
properly
laid in
up
to St. Paul via boat
Mis
the Western District
sissippi
during
period.
River
Wisconsin.
indictment
testimony
regarded by appellants
This
as
The Sixth Amendment of the Constitu-
important
showed, according
since it
provides
tion
that the accused
enjoy
shall
theory,
competition
to their
within the
jury
trial
of the State and- district
territory
indictment
could not have been wherein the crime shall have been commit-
accessibility
eliminated
becattse
ted.
territory
to outside markets. Govern
charged
conspiracy
The crime here
is a
.counsel,
argument,
ment
advised
Law,
violate
Sherman Anti-Trust
effect,
jury in
he was familiar.
may
prosecuted only
in the district
conditions about
the witness had
conspiracy
where the
formed
or where
during
testified—that
that time
Govern
some
overt act
furtherance
execution
building dams in
ment was
connection with
conspiracy
Hyde
was committed.
the nine-foot
that as a result
channel and
States,
United
225 U.S.
v.
S.Ct.
river,
“they had concrete clear across
1114, Ann.Cas.1914A, 614;
56 L.Ed.
ways that,
say,
spaced
many
you
I
so
United
Nash
U.S.
33 S.
*29
get
up
Ap
just
row
couldn’t
boat
there.”
1232;
Ct.
57 L.Ed.
United States v.
lay
pellants
considerable stress on
harm
Co.,
273
Trenton Potteries
47 S.
U.S.
statement,
by
while
done
the Govern
Ct.
71 L.Ed.