were merged into one gigantic corporation 'with a capital of $180,000,000. The same methods continued to be employed which had been used from the beginning, i. e., competing concerns were purchased and closed up, or else transferred to one of the corporations controlled by the combination.

MR. CHIEF JUSTICE WHITE (after stating the above facts) delivered the opinion of the court.

That situation and the vast power which the principal and accessory corporate defendants and the small number of individuals who own a majority of the common stock of the new American Tobacco Company exert over the marketing of tobacco as a raw product, its manufacture, its marketing when manufactured, and its consequent movement in the channels of interstate commerce, indeed, relatively, over foreign commerce, and the commerce of the whole world, in the raw and manufactured products, stand out in such bold relief from the undisputed facts which have been stated as to lead us to pass at once to the second fundamental proposition which we are required to consider. That is, the construction of the anti-trust act, and the application of the act, as rightly construed, to the situation as proven in consequence of having determined the ultimate and final inferences properly deducible from the undisputed facts which we have stated.

The construction and application of the anti-trust act.

If the anti-trust law is applicable to the entire situation here presented, and is adequate to afford complete relief for the evils which the United States insists that situation presents, it can only be because that law will be given a more comprehensive application than has been affixed to it in any previous decision. This will be the case because the undisputed facts as we have stated them involve questions as to the operation of the anti-trust law not hitherto presented in any case. Thus, even if the ownership of stock by the American Tobacco Company in the accessory and subsidiary companies, and the ownership of stock in any of those companies among themselves, were held, as was decided in the Standard Oil Company case, to be a violation of the act, and all relations resulting from such stock ownership were therefore set aside, the question would yet remain whether the principal defendant, the American Tobacco Company, and the five accessory defendants, even when divested. of their stock ownership in other corporations, by virtue of the power which they would continue to possess, even although thus stripped, would amount to a violation of both the 1st and 2nd sections of the act. Again, if it were held that the corporation, the existence whereof was due to a combination between such companies and other companies, was a violation of the act, the question would remain whether such of the companies as did not owe their existence and power to combinations, but whose power alone arose from the exercise of the right to acquire and own prop

erty, would be amenable to the prohibitions of the act. Yet further: Even if this proposition was held in the affirmative, the question would remain whether the principal defendant, the American Tobacco Company, when stripped of its stock ownership, would be, in and of itself, within the prohibitions of the act, although that company was organized and took being before the anti-trust act was passed. Still further, the question would yet remain whether particular corporations which, when bereft of the power which they possessed as resulting from stock ownership, although they were not inherently possessed of a sufficient residuum of power to cause them to be, in and of themselves, either a restraint of trade or a monopolization or an attempt to monopolize, should nevertheless be restrained because of their intimate connection and association with other corporations found to be within the prohibitions of the act.

The soundness of the rule that the statute should receive a reasonable construction, after further mature deliberation, we see no reason to doubt. Indeed, the necessity for not departing in this case from the standard of the rule of reason which is universal in its application is so plainly required in order to give effect to the remedial purposes which the act under consideration contemplates, and to prevent that act from destroying all liberty of contract and all substantial right to trade, and thus causing the act to be at war with itself by annihilating the fundamental right of freedom to trade which, on the very face of the act, it was enacted to preserve, is illustrated by the record before us. In truth, the plain demonstration which this record gives of the injury which would arise from, and the promotion of the wrongs which the statute was intended to guard against, which would result from giving to the statute a narrow, unreasoning and unheard-of construction, as illustrated by the record before us, if possible serves to strengthen our conviction as to the correctness of the rule of construction-the rule of reason which was applied in the Standard Oil case, the application of which rule to the statute we now, in the most unequivocal terms, re-express and re-affirm.

Coming, then, to apply to the case before us the act as interpreted in the Standard Oil and previous cases, all the difficulties suggested by the mere form in which the assailed transactions are clothed become of no moment. This follows because, although it was held in the Standard Oil case that, giving to the statute a reasonable construction, the words "restraint of trade" did not embrace all those normal and usual contracts essential to individual freedom, and the right to make which was necessary in order that the course of trade might be free, yet, as a result of the reasonable construction which was affixed to the statute, it was pointed out that the generic designation of the 1st and 2nd sections of the law, when taken together, embraced every conceivable act which could possibly come within the spirit or purpose of the prohibition of the law,

without regard to the garb in which such acts are clothed. That is to say, it was held that, in view of the general language of the statute and the public policy which it manifested, there was no possibility of frustrating that policy by resorting to any disguise or subterfuge of form, since resort to reason rendered it impossible to escape, by any indirection, the prohibitions of the statute.

Considering, then, the undisputed facts which we have previously stated, it remains only to determine whether they establish that the acts, contracts, agreements, combinations, etc., which are assailed, were of such an unusual and wrongful character as to bring them within the prohibitions of the law. That they were, in our opinion so overwhelmingly results from the undisputed facts that it seems only necessary to refer to the facts as we have stated them to demonstrate the correctness of this conclusion. Indeed, the history of the combination is so replete with the doing of acts which it was the obvious purpose of the statute to forbid, so demonstrative of the existence from the beginning of a purpose to acquire dominion and control of the tobacco trade, not by the mere exertion of the ordinary right to contract and to trade, but by methods devised in order to monopolize the trade by driving competitors out of business, which were ruthlessly carried out upon the assumption that to work upon the fears or play upon the cupidity of competitors would make success possible. We say these conclusions are inevitable, not because of the vast amount of property aggregated by the combination, not because, alone, of the many corporations which the proof shows were united by resort to one device or another. Again, not alone because of the dominion and control over the tobacco trade which actually exists, but because we think the conclusion of wrongful purpose and illegal combination is overwhelmingly established.

Leading as this does to the conclusion that the assailed combination in all its aspects-that is to say, whether it be looked at from the point of view of stock ownership or from the standpoint of the principal corporation and the accessory or subsidiary corporations, viewed independently, including the foreign corporations in so far as by the contracts made by them they become co-operators in the combination-comes within the prohibitions of the 1st and 2nd sections of the anti-trust act, it remains only finally to consider the remedy which it is our duty to apply to the situation thus found to exist.

The remedy.

Under these circumstances, taking into mind the complexity of the situation in all of its aspects, and giving weight to the manysided considerations which must control our judgment, we think, so far as the permanent relief to be awarded is concerned, we should decree as follows: 1st. That the combination, in and of itself, as well as each and all of the elements composing it, whether corporate or individual, whether considered collectively or separately, be de

creed to be in restraint of trade and an attempt to monopolize and a monopolization within the 1st and 2nd sections of the anti-trust act. 2nd. That the court below, in order to give the effective force to our decree in this regard, be directed to hear the parties, by evidence or otherwise, as it may be deemed proper, for the purpose of ascertaining and determining upon some plan or method of dissolving the combination and of recreating, out of the elements now composing it, a new condition which shall be honestly in harmony with and not repugnant to the law. 3rd. That for the accomplishment of these purposes, taking into view the difficulty of the situation, a period of six months is allowed from the receipt of our mandate, with leave, however, in the event, in the judgment of the court below, the necessities of the situation require, to extend such period to a further time not to exceed sixty days. 4th. That in the event, before the expiration of the period thus fixed, a condition of disintegration in harmony with the law is not brought about, either as the consequences of the action of the court in determining an issue on the subject, or in accepting a plan agreed upon, it shall be the duty of the court, either by way of an injunction restraining the movement of the products of the combination in the channels of interstate or foreign commerce, or by the appointment of a receiver, to give effect to the requirements of the statute. And it is so ordered.

Note.-The Supreme Court in its decree ordered the United States Circuit Court in New York to hear the parties to the case "for the purpose of ascertaining and determining upon some plan or method of dissolving the combination and recreating a new condition not repugnant to law." Accordingly, on November 9th, 1911, the American Tobacco Company presented to the Circuit Court a plan providing for the disintegration of the Tobacco Trust. The plan with some modifications was found acceptable to the Attorney-General of the United States, representing the government, and by order of the court was put into operation. Under its provisions, the properties of the trust were divided among several corporations legally distinct from each other, and the stock of these corporations was distributed pro rata among the stockholders of the American Tobacco Company. By this means, it was claimed, a state of competition was restored in the tobacco industry. The principal new corporations were the American Tobacco Company reorganized, the Lorillard Company, the Liggett and Myers Company, and the Reynolds Tobacco Company. The plan was bitterly opposed by the "Independent Tobacco Concerns," who claimed that each corporation as above was a trust and monopoly in itself. A petition was presented to the Supreme Court to review the action of the Circuit Court, but the petition was not entertained by the Supreme Court.

UNITED STATES v. TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS.

224 U. S., 383. 1912.

The United States Government filed a bill in equity in the Circuit Court of the United States for the Eastern District of Missouri to enforce the provisions of the Sherman Anti-Trust Act against the Terminal Railroad Association of St. Louis as principal defendant and thirty-eight corporate and individual defendants. The terminal association was organized in 1889 for the express purpose of acquiring the properties of several independent terminal companies at St. Louis with a view to combining and operating them as a unitary system.

Altogether there are twenty-four lines of railway converging at St. Louis and about one-half of these lines have their termini on the Illinois side of the Mississippi River, while the others coming from the west and north have their termini either in the city or on its northern edge. The river, once the great highway of the city's commerce, is now the great obstacle to connection between the termini of lines on opposite sides of the river and any entry into the city by eastern lines. The cost of construction and maintenance of railroad bridges over so great a river makes it impracticable for every road desiring to enter or pass through the city to have its own bridge. The solution of this problem to the city of St. Louis was the building and maintenance of railroad toll bridges open to the use of any and all lines upon equal terms. There already existed a car ferry known as the Wiggins Ferry Company, which had switching yards and terminal facilities and was able to interchange traffic between the railroad systems on opposite sides of the rive, but not to the extent required. So there was built a bridge called the Eads Bridge, which was a toll bridge and open to use by carriers on equal terms. But it was essential to connect this bridge with the various railroad termini in the city. Therefore independent companies called terminal companies were organized which built and operated lines making the necessary connections. Thus, though the bridge might be used by all upon equal terms, it was accessible only by means of the several terminal companies operating lines connecting it with the railroad termini. A second bridge was constructed, called the Merchants Bridge, but like the Eads Bridge, it had no rail connections with any of the existing railroad systems, and these facilities were likewise supplied by a number of independent railway companies which filled in the gaps between the bridge ends and the termini of railroads on both sides of the river. The result was that it was practically impossible for any railway company to pass through or even enter St. Louis, so as to be within reach of its industries or commerce, without using the facilities entirely controlled by the terminal companies.

The independent existence of these three terminal systems guaranteed a considerable measure of competition between them for the