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The rule of competition, prescribed by Congress, was not at all new in trade and commerce. And we cannot be in any doubt as to the reason that moved Congress to the incorporation of that rule into a statute. That reason was thus stated in United States v. Joint Traffic Asso.: "Has not Congress, with regard to interstate commerce, and in the course of regulating it, in the case of railroad corporations, the power to say that no contract or combination shall be legal which shall restrain trade and commerce by shutting out the operation of the general law of competition? We think it has.

The means employed in respect of the interstate commerce, could lawfully com combinations forbidden by the anti-trust bine and form a distinct corporation to hold act, and which Congress deemed germane the stock of the constituent corporations, to the end to be accomplished, was to pre- and, by destroying competition between scribe as a rule for interstate and interna- them, in violation of the act of Congress, retional commerce (not for domestic com- strain commerce among the states and with merce) that it should not be vexed by com- foreign nations. binations, conspiracies, or monopolies which restrain commerce by destroying or restrict ing competition. We say that Congress has prescribed such a rule, because, in all the prior cases in this court, the anti-trust act has been construed as forbidding any combination which, by its necessary operation, destroys or restricts free competition among those engaged in interstate commerce; in other words, that to destroy or restrict free competition in interstate commerce was to restrain such commerce. Now, can this court say that such a rule is prohibited by the Constitution or is not one that Congress could appropriately prescribe when exerting . It is the combination of these its power under the commerce clause of the large and powerful corporations, covering Constitution! Whether the free operation vast sections of territory and influencing of the normal laws of competition is a wise trade throughout the whole extent thereof, and wholesome rule for trade and commerce and acting as one body in all the matters is an economic question which this court over which the combination extends, that need not consider or determine. Undoubted-constitutes the alleged evil, and in regard ly, there are those who think that the gen- to which, so far as the combination operates eral business interests and prosperity of the upon and restrains interstate commerce, country will be best promoted if the rule of Congress has power to legislate and to procompetition is not applied. But there are habit." pp. 569, 571, L. ed. pp. 287, 288, others who believe that such a rule is more Sup. Ct. Rep. p. 32. That such a rule was apJecessary in these days of enormous wealth plied to interstate commerce should not chan it ever was in any former period of our have surprised anyone. Indeed, when Conaistory. Be all this as it may, Congress gress declared contracts, combinations, and aas, in effect, recognized the rule of free conspiracies in restraint of trade or com competition by declaring illegal every commerce to be illegal, it did nothing more than sination or conspiracy in restraint of in-apply to interstate commerce a rule that terstate and international commerce. As, in had been long applied by the several states he judgment of Congress, the public con- when dealing with combinations that were venience and the general welfare will be in restraint of their domestic commerce. The Lest subserved when the natural laws of decisions in state courts upon this general ompetition are left undisturbed by those subject are not only numerous and instructengaged in interstate commerce, and as Con- ive, but they show the circumstances ungress has embodied that rule in a statute, der which the anti-trust act was passed. It that must be, for all, the end of the matter, may well be assumed that Congress, when if this is to remain a government of laws, enacting that statute, shared the general apand not of men. prehension that a few powerful corporations It is said that railroad corporations creator combinations sought to obtain, and, uned under the laws of a state can only be consolidated with the authority of the state. Why that suggestion is made in this case we cannot understand, for there is no pretense that the combination here in ques- In Morris Run Coal Co. v. Barclay Coal tion was under the authority of the states Co. 68 Pa. 173, 186, the supreme court of under whose laws these railroad corpora- Pennsylvania dealt with a combination of tions were created. But even if the coal companies seeking the control, within state allowed consolidation, it would not a large territory, of the entire market for follow that the stockholders of two or bituminous coal. The court, observing that more state railroad corporations, hav- the combination was wide in its scope, gening npeting lines and engaged in eral in its influence, and injurious in its

less restrained, would obtain, such absolute control of the entire trade and commerce of the country as would be detrimental to the general welfare.

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So, in Craft v. McConoughy, 79 Ill. 346, 350, 22 Am. Rep. 171, 174, which was the case of a combination among grain dealers by which competition was stifled, the court saying: "So long as competition was free, the interest of the public was safe. The laws of trade, in connection with the rigor of

required; but the secret combination created by the contract destroyed all competition, and created a monopoly against which the public interest had no protection." Again, in People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 269, 297, 8 L. R. A. 497, 506, 22 N. E. 798, 804, which involved the validity of the organization of a gas corporation which obtained a monopoly in the business of furnishing illuminating gas in the city of Chicago by buying the stock of four other gas companies, it was said: "Of what avail is it that any number of gas companies, may be formed under the general incorporation law, if a giant trust company can be clothed with the power of buy ing up and holding the stock and property of such companies, and, through the control thereby attained, can direct all their operations and weld them into one huge combination?" To the same effect are cases almost too numerous to be cited. But among

effects, said: "When competition is left to know that the inevitable tendency of such free, individual error or folly will generally contracts is injurious to the public.” find a correction in the conduct of others. But here is a combination of all the companies operating in the Blossburg and Barclay mining regions, and controlling their entire productions. They have combined to gether to govern the supply and the price of coal in all the markets from the Hudson to the Mississippi rivers, and from competition, was all the guaranty the public Pennsylvania to the Lakes. This combination has a power in its confederated form which no individual action can confer. The public interest must succumb to it, for it has left no competition free to correct its baleful influence. When the supply of coal is suspended the demand for it becomes importunate, and prices must rise. Or if the supply goes forward, the price fixed by the confederates must accompany it. The domestic hearth, the furnaces of the iron master, and the fires of the manufacturer all feel the restraint, while many dependent hands are paralyzed and hungry mouths are stint ed. The influence of a lack of supply or a rise in the price of an article of such prime necessity cannot be measured. It permeates the entire mass of the community, and leaves few of its members untouched by its withering blight. Such a combination is more than a contract; it is an offense. . In all such combinations where the purpose is injurious or unlawful, the gist of the of fense is the conspiracy. Men can often do by the combination of many what, severally, no one could accomplish, and even what, when done by one, would be innocent. There is a potency in numbers when combined which the law cannot overlook, where injury is the consequence." The same principles were applied in Arnot v. Pittston & E. Coal Co. 68 N. Y. 558, 565, 23 Am. Rep. 190, 194, which was the case of a combination of two coal companies in order to give one of them a monopoly of coal in a particular region, the court of appeals of New York holding that "a combination to effect such a purpose is inimical to the interests of the public, and that all contracts designed to effect such an end are contrary to public policy, and therefore illegal." They were also applied by the supreme court of Ohio in Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666, 672, which was the case of a combination among manufacturers of salt in a large salt-producing territory, the court saying: "It is no answer to say that competition in the salt trade was not in fact destroyed, or that the price of the commodity was not unreasonably advanced. Courts will not stop to inquire as to the degree of injury inflicted upon the public; it is enough

them we refer to Richardson v. Buhl, 77 Mich. 632, 6 L. R. A. 457, 43 N. W. 1102, which was the case of the organization of a corporation in Connecticut to unite in one corporation all the match manufacturers in the United States, and thus to obtain control of the business of manufacturing matches; Santa Clara Valley Mill & Lumber Co. v. Hayes, 76 Cal. 387, 390, 18 Pac. 391, which was the case of a combination among manufacturers of lumber, by which it could control the business in certain localities; and India Bagging Asso. v. Kock, 14 La. Ann. 164, which was the case of a combination among various commercial firms to control the prices of bagging used by cotton planters.

the domestic commerce of the states. But The cases just cited, it is true, relate to they serve to show the authority which the states possess to guard the public against combinations that repress individual enterprise and interfere with the operation of the natural laws of competition among those engaged in trade within its limits. They serve also to give point to the declaration of this court in Gibbons v. Ogden, 9 Wheat. 197, 6 L. ed. 70,-a principle never modified by any subsequent decision,-that, subject to the limitations imposed by the Constitution upon the exercise of the powers granted by

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that instrument, "the power over commerce and international commerce, enter into with foreign nations and among the sever- combination such as the one here in quesal states is vested in Congress as absolutely tion, and, by the device of a holding corpoas it would be in a single government hav-ration, obtain the absolute control throughing in its constitution the same restrictions out the entire country of rates for passengers on the exercise of the power as are found and freight, beyond the power of Congress in the Constitution of the United States." to protect the public against their exacIs there, then any escape from the conclu- tions? The argument in behalf of the desion that, subject only to such restrictions, the power of Congress over interstate and international commerce is as full and complete as is the power of any state over its domestic commerce! If a state may strike down combinations that restrain its domestic commerce by destroying free competition among those engaged in such commerce, what power, except that of Congress, is competent to protect the freedom of interstate and international commerce when assailed by a combination that restrains such commerce by stifling competition among those engaged in it?

fendants necessarily leads to such results, and places Congress, although invested by the people of the United States with full authority to regulate interstate and international commerce, in a condition of utter helplessness, so far as the protection of the public against such combinations is concerned.

Will it be said that Congress can meet such emergencies by prescribing the rates by which interstate carriers shall be gov erned in the transportation of freight and passengers? If Congress has the power to fix such rates-and upon that question we Now, the court is asked to adjudge that, express no opinion-it does not choose to if held to embrace the case before us, the exercise its power in that way or to that anti-trust act is repugnant to the Consti- extent. It has, all will agree, a large discretution of the United States. In this view tion as to the means to be employed in the we are unable to concur. The contention of exercise of any power granted to it. For the defendants could not be sustained with- the present, it has determined to go no farout, in effect, overruling the prior decisions ther than to protect the freedom of comof this court as to the scope and validity merce among the states and with foreign of the anti-trust act. If, as the court has states by declaring illegal all contracts, held, Congress can strike down a combina- combinations, conspiracies, or monopolies in tion between private persons or private cor- restraint of such commerce, and make it a porations that restrains trade among the public offense to violate the rule thus prestates in iron pipe (as in Addyston Pipe scribed. How much further it may go, we & Steel Co. v. United States) or in tiles, do not now say. We need only at this time grates, and mantels (as in W. W. Montague consider whether it has exceeded its pow& Co. v. Lowry), surely it ought not to beers in enacting the statute here in question. doubted that Congress has power to declare Assuming, without further discussion, illegal a combination that restrains commerce among the states, and with foreign nations, as carried on over the lines of competing railroad companies exercising public franchises, and engaged in such commerce. We cannot agree that Congress may strike down combinations among manufacturers if the anti-trust act be constitutional, and and dealers in iron pipe, tiles, grates, and if the combination in question be in violamantels that restrain commerce among the tion of its provisions, the courts may enstates in such articles, but may not strike force the provisions of the statute by such down combinations among stockholders of orders and decrees as are necessary or apcompeting railroad carriers, which restrain propriate to that end and as may be consistcommerce as involved in the transportation ent with the fundamental rules of legal of passengers and property among the sev- procedure. And all, we take it, will agree, eral states. If private parties may not, as established firmly by the decisions of this by combination among themselves, restrain court, that the power of Congress over cominterstate and international commerce in vi- merce extends to all the instrumentalities olation of an act of Congress, much less can of such commerce, and to every device that such restraint be tolerated when imposed or many be employed to interfere with the freeattempted to be imposed, upon commerce as dom of commerce among the states and with carried on over public highways. Indeed, foreign nations. Equally, we assume, all if the contentions of the defendants are will agree that the Constitution and the lesound, why may not all the railway com- gal enactments of Congress are, by express panies in the United States, that are en- words of the Constitution, the supreme law gaged, under state charters, in interstate of the land, anything in the constitution

that the case before us is within the terms of the act, and that the act is not in excess of the powers of Congress, we recur to the question, How far may the courts go in. reaching and suppressing the combination) "described in the bill? All will agree that

and laws of any state to the contrary notwithstanding. Nevertheless, the defendants, strangely enough, invoke in their behalf the 10th Amendment of the Constitution, which declares that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively or to the people;" and we are confronted with the suggestion that any order or decree of the Federal court which will prevent the Northern Securities Company from exercising the power it acquired in becoming the holder of the stocks of the Great Northern and Northern Pacific Railway Companies will be an invasion of the rights of the state under which the Securities Company was chartered, as well as of the rights of the states creating the other companies. In other words, if the state of New Jersey gives a charter to a corporation, and even if the obtaining of such charter is in fact pursuant to a combination under which it becomes the holder of the stocks of shareholders in two competing, parallel railroad companies engaged in interstate commerce in other states, where by competition between the respective roads of those companies is to be destroyed and the enormous commerce carried on over them restrained by suppressing competition, Congress must stay its hands and allow such restraint to continue, to the detriment of the public, because, forsooth, the corporations concerned or some of them are state corporations. We cannot conceive how it is possible for anyone to seriously contend for such a proposition. It means nothing less than that Congress, in regulating interstate commerce, must act in subordination to the will of the states when exerting their power to create corporations. No such view can be entertained for a moment.

We reject any such view of the relations of the national government and the states composing the Union as that for which the defendants contend. Such a view cannot be maintained without destroying the just authority of the United States. It is inconsistent with all the decisions of this court as to the powers of the national government over matters committed to it. No state can, by merely creating a corporation, or in any other mode, project its authority into other states, and across the continent, so as to prevent Congress from exerting the power it possesses under the Constitution over interstate and international commerce, or so as to exempt its corporation engaged in interstate commerce from obedience to any rule lawfully established by Congress for such commerce. It cannot be said that any state may give a corporation, created under its laws, authority to restrain interstate or international commerce against the will of the nation as lawfully expressed by Congress. Every corporation created by a state is necessarily subject to the supreme law of the land. And yet the suggestion is made that to restrain a state corporation from interfering with the free course of trade and commerce among the states, in violation of an act of Congress, is hostile to the reserved rights of the states. The Federal court may not have power to forfeit the charter of the Securities Company; it may not declare how its shares of stock may be transferred on its books, nor prohibit it from acquiring real estate, nor diminish or increase, its capital stock. All these and like matters are to be regulated by the state which created the company. But to the end that effect be given to the national will, lawfully expressed, Congress may prevent that company, in its capacity as a holding It is proper to say in passing that noth-corporation and trustee, from carrying out ing in the record tends to show that the the purposes of a combination formed in state of New Jersey had any reason to sus-restraint of interstate commerce. The Sepect that those who took advantage of its curities Company is itself a part of the presliberal incorporation laws had in view, when ent combination; its head and front; its organizing the Securities Company, to de- trustee. It would be extraordinary if the stroy competition between two great rail-court, in executing the act of Congress, could way carriers engaged in interstate commerce not lay hands upon that company and prein distant states of the Union. The purpose vent it from doing that which, if done, will of the combination was concealed under very defeat the act of Congress. Upon like general words that gave no clue whatever to grounds the court can, by appropriate orthe real purposes of those who brought ders, prevent the two competing railroad about the organization of the Securities companies here involved from co-operating Company. If the certificate of incorpora- with the Securities Company in restraining tion of that company had expressly stated commerce among the states. In short, the that the object of the company was to de-court may make any order necessary to stroy competition between competing, paral- bring about the dissolution or suppression of lel lines of interstate carriers, all would an illegal combination that restrains interhave seen, at the outset, that the scheme state commerce. All this can be done with was in hostility to the national authority, out infringing in any degree upon the just and that there was a purpose to violate or authority of the states. The affirmance of avade the act of Congress. the judgment below will only mean that no

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combination, however powerful, is stronger | Ct. Rep. 488. In Texas v. White, 7 Wall than the law, or will be permitted to avail 700, 725, 19 L. ed. 227, 237, the court reitself of the pretext that to prevent it do- marked "that "the people of each state coming that which, if done, would defeat a legal | enactment of Congress, is to attack the reserved rights of the states. It would mean that the government which represents all, can, when acting within the limits of its powers, compel obedience to its authority. It would mean that no device in evasion of its provisions, however skilfully such device may have been contrived, and no combination, by whomsoever formed, is beyond the reach of the supreme law of the land, if such device or combination, by its operation, directly restrains commerce among the states or with foreign nations in violation of the act of Congress.

The defendants rely, with some confidence, upon the case of the Baltimore & O. R. Co. v. Maryland, 21 Wall. 456, 473, 22 L. ed. 678, 684. But nothing we have said is inconsistent with any principle announced in that case.

pose a state, having its own government, and endowed with all the functions essential to separate and independent existence,' and that 'without the states in union, there could be no such political body as the United States.' Lane County v. Oregon, 7 Wall 76, 19 L. ed. 104. Not only, therefore, can there be no loss of separate and independent autonomy to the states, through their union under the Constitution, but it may be not unreasonably said that the preservation of the states, and the maintenance of their governments, are as much within the design and care of the Constitution as the preservation of the Union and the maintenance of the national government." These doctrines are at the basis of our constitu tional government, and cannot be disregarded with safety.

In that case it was contended by the railroad company that the assumption of the state to forbid the consolidation of parallel and competing lines was an interference with the power of Congress over interstate commerce. The court observed that but little need be said in answer to such a proposition, for "it has never been supposed that the dominant power of Congress over interstate commerce took from the states the power of legislation with respect to the in

The defendants also rely on Louisville & The court there recognized N. R. Co. v. Kentucky, 161 U. S. 677, 702, the principle that a state has plenary pow-40 L. ed. 949, 859, 16 Sup. Ct. Rep. 714, 724, ers "over its own territory, its highways, its franchises, and its corporations," and observed that "we are bound to sustain the constitutional powers and prerogatives of the states, as well as those of the United States, whenever they are brought before us for adjudication, no matter what may be the consequences." Of course, every state has, in a general sense, plenary power over its corporations. But is it conceivable that a state, when exerting power over a corporation of its creation, may prevent or embar-struments of such commerce, so far as the rass the exercise by Congress of any power with which it is invested by the Constitution? In the case just referred to the court does not say, and it is not to be supposed that it will ever say, that any power exists in a state to prevent the enforcement of a lawful enactment of Congress, or to invest any of its corporations, in what ever business engaged, with authority to disregard such enactment or defeat its le gitimate operation. On the contrary, the court has steadily held to the doctrine, vital to the United States as well as to the states, that a state enactment, even if passed in the exercise of its acknowledged powers, must yield, in case of conflict, to the supremacy of the Constitution of the United States and the acts of Congress enacted in pursuance of The question of the relations of the genits provisions. This results, the court has eral government with the states is again said, as well from the nature of the govern- presented by the specific contention of each ment as from the words of the Constitution. defendant that Congress did not intend "to Gibbons v. Ogden, 9 Wheat. 1, 210, 6 L. ed. limit the power of the several states to cre23, 73; Sinnot v. Davenport, 22 How. 227, ate corporations, define their purposes, fix 243, 16 L. ed. 243, 247; Re Debs, 158 U. S. the amount of their capital, and determine 664, 39 L ed. 1092, 15 Sup. Ct. Rep. 900; who may buy, own, and sell their stock.” Missouri, K. & T. R. Co. v. Haber, 169 U. S. All that is true, generally speaking, but the 613, 626, 627, 42 L. ed. 878, 883, 18 Sup. contention falls far short of meeting the

legislation was within its ordinary police powers." But that case distinctly recog nized that there was a division of power between Congress and the states in respect to interstate railways, and that Congress had the superior right to control that commerce and forbid interference therewith, while to the states remained the power to create and to regulate the instruments of such commerce, so far as necessary to the conservation of the public interests. If there is anything in that case which even intimates that a state or a state corporation may in any way directly restrain interstate commerce, over which Congress has, by the Constitution, complete control, we have been unable to find it.

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