The petition in this case was filed April 30, 1912, under section 4 of “An act to protect trade and commerce against unlawful restraints and monopolies,” generally known as the “Sherman Law.” Act July 2, 1890, c. 647, 26 Stat. 209 (U. S. Comp. St. 1901, p. 3200). _
_ Under that section the Circuit Court was vested with jurisdiction of such suits, but the Circuit Court was abolished by Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1167 [U. S. Comp. St. Supp. 1911, p. 243]) § 289, and by section 291 the jurisdiction under section 4 of the Sherman Law passed to the District Court. The Attorney General having, under Act Feb. 11, 1903, c. 544, 32 Stat. 823 (U. S. Comp. St. Supp. 1911, p. 1383), filed with the clerk of the District Court a certificate that this case is of general public importance the same came on for hearing before the Circuit Judges named, notwithstanding the abolishment of the Circuit Court. Ex parte United States, 226 U. S. 420, 33 Sup. Ct. 170, 57 L. Ed. 281.
The petition makes defendants the International Harvester Company, the International Harvester Company of America, the International Flax Twine Company, the Wisconsin Steel Company, the Wisconsin Lumber Company, the Illinois Northern Railway Company, the Chicago, West Pullman & Southern Railroad Company, Cyrus H. McCormick, Charles Deering, James Deering, John J. Glessner, William H. Jones, Harold F. McCormick, Richard F. Howe, Edgar A. Bancroft, George F. Baker, William J.' Louderback, Norman B. Ream, Charles Steele, John A. Chapman, Elbert H. Gary, Thomas D. Jones, John P. Wilson, William L. Saunders, and George W. Perkins.
All of these defendants made answer. The case was tried and has been submitted to the court for a decree. As the pleadings are elaborate, covering more than 130 pages of printed matter, and as no questions have been raised as to the sufficiency of any of them, we will state the facts as shown, contenting ourselves with saying that all of the facts found by the court are either expressly covered by the allegations of the pleadings or are within the necessary implications thereof. In their argument defendants’ counsel say:
“TMs case is one of fact, not of controverted questions of law.”
It will be necessary, therefore, to review the facts fairly, fully, but not elaborately, as there are 18 volumes and nearly 10,500 printed pages in the record.
Agricultural implements may be divided into five classes:
(1) Tillage implements, such as plows, harrows, and other instruments used in keeping the soil in good condition.
*991(2) Seeding implements, such as corn planters, drills, and seeders.
(3) Harvesting implements, such as harvesters, mowers, reapers, rakes, and the like.
(4) Threshing machines.
(5) Implements for general agricultural use, such as wagons, manure spreaders, gas engines, cream separators, tractors, and' certain similar tools and instrumentalities.
The defendant the International Harvester Company, hereafter called the International Company, was organized on August 12, 1902, under the laws of New Jersey. The objects for which it was organized, as stated in the articles of incorporation, were:
“To manufacture, sell, and deal in harvesting machines, tools, and implements of all lands, including harvesters, binders, reapers, mowers, rakes, headers, shedders, machinery, engines, wagons, motor vehicles, and vehicles of all kinds; agricultural machinery, tools, and implements of all kinds, binder twine, and all devices, materials, and articles used or intended for use in connection therewith, and all repair parts and other devices, materials, and articles used, or intended for use, in connection with any kind of harvesting or agricultural machines, tools, or implements, or any gasoline, electric, or other vehicles.
“To engage in the manufacture or production of, and to deal in, any materials or products which may be used in, or in connection with, the manufacture of harvesting or agricultural machines, tools, and implements.”'
Prior to that time the principal manufacturers of harvesting implements in the United States had been:
First. The McCormick Harvesting Machine Company, a corporation, of Chicago, Ill.,'founded about 1849;
Second. D. M. Osborne & Co., a New York corporation, with a plant or plants at Auburn, N. Y., founded about 1860;
Third. The Warder, Bushnell & Glessner Company, an Ohio corporation, with its manufacturing plant at Springfield, Ohio, and its offices at Chicago, Ill., which manufactured under the name of the Champion, founded about 1869;
Fourth. The Deering Harvester Company, a copartnership, of Chicago, Ill., founded about 1875 ;
Fifth. The Milwaukee Harvester Company, of Milwaukee, Wis.; and
Sixth. The Plano Manufacturing, Company, of West Pullman, Ill.
While these were the leading manufacturers of harvesting machines, they had other, but not general, lines of manufacture of agricultural implements.
On June 24, 1902, P. D. Middlekauff secured, in his own name, an option on the stock and plant of the Milwaukee Harvester Company, for $3,123,691.90. He did this in fact as agent, though it does not clearly and certainly appear who his principal was, whether J. P. Morgan & Co., George W. Perkins, or the McCormick Harvesting Machine Company. He did it, however, at the direct instance of the McCormick Harvesting Machine Company, but whether it was acting as principal or agent is left in some slight doubt.
On June 25, 1902, Mr. Middlekauff went to New York with a letter from an officer of the McCormick Company, authorizing him to assign this option to J. P. Morgan & Co., of which George W. Perkins was a *992member, or to any one they might designate, and reciting that the option had been obtained “for us.” Mr. Middlekauff remained in New York until July 30, 1902, aside from being absent a small portion of the time in Philadelphia and Washington on business for Mr. Perkins.
On August 11, 1902, a new contract was made for the purchase of the Milwaukee Harvester plant by Mr. Middlekauff, and on the same day he assigned his contract to Mr. William C. Lane, a New York banker and then president of the Standard Trust Company.
In July, 1902, the representatives of the McCormick, the Deering, the Warder, Bushnell & Glessner, and the Plano were all in New York, but stopping at different hotels and not seeing one another. They were-all seeing, however, Mr. George W. Perkins. On July 28, 1902, they met and gave separate contracts to William C. Lane, heretofore referred to, and his assigns, to sell all their tangible property and specified portions of their' bills receivable. These agreements all contained a recital that the purchaser, upon his acquisition of the property, intended to transfer the same to a corporation to be organized under the laws of Illinois, or some other state, called the “purchasing company.” It was in each case, except that of the Warder, Bushnell & Glessner Company, stipulated that the. entire purchase price should be paid in fully paid nonassessable stock of the purchasing company.
On August 11, 1902, the companies all signed an agreement for the immediate delivery of their plants and property, without waiting for any appraisement theretofore stipulated for in each instance.
On August 12, 1902, the very day of the organization of the International Harvester Company with a total capital of $120,000,000, Mr. Lane appeared before the board of directors and offered to sell the Milwaukee Harvester Company plant as a going qoncern, including its bills receivable and the plants of the McCormick Harvesting Machine Company, the Deering Harvester Company, the Plano Manufacturing Company, and the Warder, Bushnell & Glessner Company, and to furnish $60,000,000 of working capital, to be represented by accounts and bills receivable of the McCormick Harvesting Machine Company, the Deering Harvester Company, and the Plano Manufacturing Company, or in cash, for the $120,000,000 of the capital stock of the company, and on August 13, 1902, this proposition was accepted. The property turned in was of greater value than the stock issued for it. This case, therefore, involves no question of overcapitalization.
In pursuance of this agreement there was turned over to the company $40,000,000 of the bills receivable of the McCormick Harvesting Machine Company, the Deering Harvester Company, and the Plano Manufacturing Company, guaranteed by them, respectively. In all Mr. Lane did in this matter he was acting upon the suggestion of his counsel, Messrs. Guthrie, Cravath & Henderson. He was compensated, but there never was any idea upon his part that he owned any of the properties. He was a mere conduit or instrumentality in the transaction.
The International Company shortly acquired all the stock of the ' Milwaukee Harvester Company, as it had already acquired the plant. It reduced the capital of the Milwaukee Harvester Company to $1,-*993000,000, and changed the name to the International Harvester Com-gany of America, hereafter called the America Company. It was for a considerable time officered by the same men who held the offices in the International Company. A contract was entered into between the International Company and the America Company by which the-.former contracted to sell to the latter its entire output and the latter undertook the responsibilities of reselling the same. The America Company, in addition to buying the manufactured products of the International, bought from outside parties some threshers, wagons, plows, etc., and resold them; but the dealing in all property not the product of the International Company only amounts to about 2% per cent, of its business. All the stock of the America Company is still the property of the International Company.
The two defendant railroads are switching roads to the factories of the International Company; one acquired in the consolidation mentioned, and one constructed by the new company. The International Flax Twine Company, the Wisconsin Steel Company, and the Wisconsin Lumber Company are auxiliary companies of the International Company, and the personal defendants are officers and directors of the last-named company.
It is alleged in the petition that these five companies produced over 85 per cent, of all harvesting machinery sold in the United States, and it is admitted in the answer that said companies produced approximately 80 to 85 per cent, of the binders, mowers, reapers, and ralees.
In January following the consolidation of the five companies, the International Company acquired the D. M. Osborne & Co. stock, and the companies thus combined manufactured a still greater percentage of the harvesting machinery used in the United States and nearly the whole of that exported from the United States. The five companies except the Milwaukee Company all took stock in the new company, and with the exception of the Warder, Bushnell & Glessner Company took stock for the entire amount of property turned over by them, and this amounted to $93,400,000 of the $120,000,000 capital of the new company. $6,600,000 of the capital of. the new company was paid to J. P. Morgdn & Co., of which $3,148,196.66 was for the Milwaukee Harvester Company’s property and business, and $3,451,803.34 was for services and expenses in connection with the organization of the International Company. Thus $100,000,000 of the capital of the new company was clearly covered, without any new or additional working capital. By agreement among all the parties who were to receive shares of stock in the International, all the stock except enough to qualify directors was vested in voting trustees, namely, George W. Perkins, Cyrus H. McCormick, president of the McCormick Harvesting Machine Company, and Charles Deering, of the Deering Harvester Company. These voting trustees were maintained for ten years.
The day of the transfer to the International Harvester Company of the five plants, Cyrus H. McCormick, Harold F. McCormick, Stanley McCormick, all of the McCormick Harvesting Machine Company, and Cyrus Bentley, the Chicago attorney of the company, Charles *994Deering, William Deering, James Deering, and Richard F. Howe, all ■of the Deering Harvester Company, John J. Glessner, of the Warder, Bus'hnell & Glessner Company, and William H. Jones, of the Plano Manufacturing Company, were all chosen directors of the International Harvester Company and constituted the majority of the board.
When the D. M. Osborne & Co. purchase was made, while the In-, ternational bought all the stock, it permitted the Osborne Company to continue to appear to be independent. It is claimed that this was done to enable the Osborne to collect its bills receivable, which were not acquired by the International. There was commercial advantage in claiming not to be associated with the International. Many persons were opposed to buying from it, and for two years the .Osborne Company persistently advertised that it was independent.
While under the old-time law of warranty it might be justifiable for the Osborne Company to conceal its relations with the International, there can be no excuse for the affirmation upon its part that it was independent after it had been acquired by the International.
“Tiie seller may let the buyer cheat himself ad libitum, but must not actively assist him in cheating himself.” 1 Parsons on Contracts (9th Ed.) page 615.
The International had bought all the stock of the Osborne Company, and it had been transferred to a trustee for it, and there was, in the fact that the Osborne Company might.better collect its bills receivable, no basis to justify the International in making a contract under which the Osborne Company could continue to advertise falsely that it was an independent concern, when it had in fact been merged with the International. It is safe to say that from January, 1903, the competition of the Osborne Company was in name only and did not exist in fact.
What has been said of the Osborne purchase is true in principle of purchases made by the International of the Keystone Company, the Minnie Harvester Company, and the Aultman-Miller plant.
Prior to the consolidation the first five companies were in fierce competition for trade, and especially was this true of the McCormick and the Deering Companies, and this competition extended, not only to price, but to the granting of expert assistance and numerous free items with machines. The result of the combination was that all this competition at, once wholly ceased, except within the limitation of agents’ commissions.
The defendants claim that the objects of the organization were:
First, to build up the foreign trade;
Second, by the combination to secure more capital to enable them to continue the battle in the foreign market;
Third, by enlarging the scope of the business so as to include other lines of agricultural implements to make an all the year around business ;
—and that it was not the intention to oppress the domestic market, and that they have not done so.
It does appear that since the combination the foreign trade has been greatly increased. This trade of all the combining companies was *995$10,400,000 in 1902, and has grown under the defendants’ management to $50,000,000 in 1912. This vast growth is to the credit of the energy and enterprise of the defendants. But the growth of the trade of the companies who formed the combination was at the time of the consolidation very recent, and the trade was rapidly increasing just prior to the combination. With the knowledge that the foreign trade was making such a remarkable growth at the time of the consolidation, whether the separate companies would have increased their business as much as the defendants have done is a mere matter of speculation, on which we can venture no opinion.
It is claimed that the consolidation brought $60,000,000 of available cash to the new company with which to expand the foreign trade. This is not true. The government claims that not more than $10,000,-000 of new cash was furnished, but in no event did it exceed $20,000,-000. Forty million dollars of this so-called working capital was furnished in bills receivable of the old companies, just as available to the old companies as to the new; and $60,000,000 was issued for the tangible property of the old companies and the expenses of J. P. Morgan & Co. in connection with the organization of the new company, and for the Milwaukee Company.
Soon the International began buying and constructing plants to extend its business from the prior one of the manufacture of harvesting machinery to the manufacture of all of the five classes of agricultural implements heretofore referred to. Consequently a distinction is drawn in argument between what are called the old lines and the new.
It is contended by the government that the International used its prior monopoly of the old lines to impose its new lines upon dealers and it includes this among numerous charges of oppression upon purchasers.
While the evidence shows some instances of attempted oppression of the American trade by the International and the America Companies, such cases are sporadic, and in general their treatment of their smaller competitors has been fair and just, and if the International and America Companies were not in themselves unlawful there is nothing in the history of the expanding of the lines of manufacture, so as to make an all the year around business, that could be condemned.
[ 1 ] The real question is whether the combination of the companies was illegal in the beginning, or became so with the additions subsequently made.
This. court is clearly of the opinion that the process by which it was made to appear that the properties were sold to Fane was merely colorable.
Parts of sections 1 and 2 of the Sherman Law are as follows:
■ “Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal.
“Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons,, to monopolize any part *996of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a misdemeanor.”
The question is whether the combination was illegal under this statute.
This statute must be construed in the light of reason. Standard Oil Co. v. United States, 221 U. S. 1, 31 Sup. Ct. 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734; United States v. American Tobacco Co., 221 U. S. 106, at page 180, 31 Sup. Ct. 632, 648 (55 L. Ed. 663).
_ In the latter case the Supreme Court said:
“doming 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 were 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 first and second sections of the law, when taken together, embraced every conceivable act which could possibly come within the spirit or purpose of the prohibitions of the law, without regard to the garb in which such acts were 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.”
[2] No weight is attached therefore to the means by which the combination was formed if a combination within the purview of the statute was created. That it was a combination of five companies is clear. The fact that this combination took the form of a new corporation is immaterial. United States v. American Tobacco Co., 221 U. S. 106, 31 Sup. Ct. 632, 55 L. Ed. 663; United States v. E. I. Du Pont De Nemours & Co. (C. C.) 188 Fed. 127.
Was this combination in restraint of trade? It substantially suppressed all competition between the five companies, and the restraint of competition between combining companies is as illegal as destruction of competition between them without combining.
In United States v. E. I. Du Pont De Nemours & Co., 188 Fed. 127, in an able opinion by Lanning, Circuit Judge, in behalf of Circuit Judges Gray, Buffington, and himself, it is said:
“A number of bills were introduced in the Fiftieth Congress (in August and September, 1888), designed to make unlawful every combination ‘to prevent competition’ and ‘to prevent full and free competition’ in the sales of articles transported from one state to another. None of them was enacted into law. On December 4, 1889, Mr. Sherman introduced into the Senate of the Fifty-First Congress a bill which declared unlawful every combination ‘to prevent full and free competition’ in such sales. After much debate the bill was, on March 27, 1890, referred to the committee on judiciary, and on April 2, 1890, that committee reported it back to the Senate with an amendment, drawn by the late Senator Hoar, striking out all after its enacting clause and substituting therefor the act as we now have it. As enacted, it does not condemn every combination ‘to prevent competition.’ What it condemns is every combination in restraint of trade or commerce among the several states, etc. *997Wlien the bill went from the Senate to the House, the latter body amended it by inserting a provision extending the scope of the act to all agreements entered into for the purpose of ‘preventing competition’ either in the purchase or sale of commodities; but the amendment was disagreed to. 'While there is a ‘general acquiescence in the doctrine that debates in Congress are not appropriate sources of information from which to discover the meaning of the language of a statute passed by that body’ (United States v. Freight Association, 166 U. S. 318, 17 Sup. Ct. 540, 41 L. Ed. 1007), that rule ‘in the nature of things is not violated by resorting to debates as a means of ascertaining the environment at the time of the enactment of a particular law; that is, the history of the period when it was adopted’ (Standard Oil Co. v. United States, 221 U. S. 50, 31 Sup. Ct. 512, 55 L. Ed. 619 [34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734], decided May 15, 1911).
“There is a distinction between restraint of competition and restraint of trade. The latter expression had, when the Anti-Trust Act was passed^ a definite legal signification. Not every combination in restraint of competition was, in a legal sense, in restraint of trade. Two men in the same town engaged in the same business as competitors may unite in a copartnership, and thereafter, as between themselves, substitute co-operation for competition. Their combination restrains competition, and if their town is located near the line between two states, and each has been trading in both states, their combination restrains competition in interstate trade. But it does not necessarily follow that such restraint of competition is a restraint of interstate trade and commerce. The determination of whether it be so must depend upon the facts and circumstances of each individual cáse. It is undoubtedly the policy of the statute that competitive conditions in interstate trade should be maintained wherever their abolition would tend to suppress or diminish such trade. But this being true does not read into the statute a denunciation of all agreements that may restrain competition without regard to their purpose or direct effect to restrain ‘trade or commerce among the several states.’ To what extent the Anti-Trust Act condemns combinations that restrain full and free competition in interstate trade is a question that has .been much debated. For a dozen years, at least, it has been settled that it does not condemn combinations which only indirectly, remotely, or incidentally restrain interstate trade.
“The recent decisions of the Supreme Court in Standard Oil Co. v. United States, and American Tobacco Co. v. United States, 221 U. S. 106, 31 Sup. Ct. 632, 55 L. Ed. 663, make it quite clear that the language of the Anti-Trust Act is not to receive that literal construction which will impair rather than enhance freedom of interstate commerce. As we read those decisions, restraint of interstate trade and restraint of competition in interstate trade are not interchangeable expressions. There may be, under the Anti-Trust Act, restraint of competition that does not amount to restraint of interstate trade, just as before the passage of the act there might have been restraint of competition that did not amount to a common-law restraint of trade. This fact was plainly recognized in United States v. Joint Traffic Association, 171 U. S. 505, 567, 19 Sup. Ct. 25, 31, 43 L. Ed. 259, where Mr. Justice Peckham said:
“ ‘We might say that the formation of corporations for business or manufacturing purposes has never, to our knowledge, been regarded in the nature of a contract in restraint of trade or commerce. The same may be said of the contract of partnership. It might also be difficult to show that the appointment by two or more producers of the same person to sell their goods on commission was a matter in any degree in restraint of trade. We are not aware that it has ever been claimed that a lease or purchase by a farmer, a manufacturer, or merchant of an additional farm, manufactory, or shop, or tbe withdrawal from business of any farmer, merchant, or manufacturer, restrained commerce or trade within the legal definition of that term.’
' “While all this is true, the recent decisions of the Supreme Court make it equally clear that a combination cannot escape the condemnation of the AntiTrust Act merely by the form it assumes or by the dress it wears. It matters not whether the combination be ‘in the form of a trust or otherwise,’ whether it be in the form of a trade association or a corporation, if it arbitrarily uses *998its power to force weaker competitors out of business, or to coerce them into a sale to -or union with the combination, it puts a restraint upon interstate commerce, and monopolizes or attempts to monopolize a part of that commerce, in a sense that violates the Anti-Trust Act.”
In United States v. E. C. Knight Co., 156 U. S. 1, 16, 15 Sup. Ct. 249, 255 (39 L. Ed. 325), Chief Justice Fuller said:
“Again, all the authorities agree that in order to vitiate a contract or combination it is not essential that its result should be a complete monopoly; it is sufficient if it really tends to that end and to deprive the public of the advantages which flow from free competition.”
And this was reiterated in Addyston Pipe Co. v. United States, 175 U. S. 211, 237, 20 Sup. Ct. 96, 44 L. Ed. 136.
In Northern Securities Co. v. United States, 193 U. S. 197, 331, 24 Sup. Ct. 436, 454 (48 L. Ed. 679), it is said:
“We will not incumber this opinion by extended extracts from the former opinions of this court. It is sufficient to say that from the decisions in the above cases certain propositions are plainly deducible and embrace the present case. Those propositions are: * * * That railroad carriers engaged in interstate or international trade or commerce are embraced by the act; that combinations, even among private manufacturers or dealers, whereby interstate or international commerce is' restrained, are equally embraced by the act; that Congress has the power to establish rules by which interstate and international commerce shall be governed, and, by the Anti-Trust Act, has prescribed the rule of free competition among those engaged in such commerce.;’
In United States v. Reading Co., 226 U. S. 324, 370, 33 Sup. Ct. 90, 103 (57 L. Ed. 243), it is said:
“Whether a particular act, contract, or agreement was a reasonable and normal method in furtherance of trade and commerce may, in doubtful cases, turn upon the intent to be inferred from the extent of the control thereby secured over the commerce affected, as well as by the method which was used. Of course, if the necessary result is materially to restrain trade between the states, the intent with which the thing was done is of no consequence. But when there is only a probability, the intent to produce the con sequences may become important. United States v. St. Louis Terminal Association, 224 U. S. 383, 394 [32 Sup. Ct. 607. 66 L. Ed. 8101; Swift & Co. v. United States, 196 U. S. 375 [25 Sup. Ct. 276, 49 L. Ed. 518].
“In the instant case the extent of the control over the limited supply of anthracite coal by means of the great proportion theretofore owned or controlled by the defendant companies, and the extent of the control acquired over the independent output which constituted the only competing supply, affords evidence of an intent to suppress that competition, and of a purpose to unduly restrain the freedom of production, transportation, and sale of the article at, tide-water markets.
“The case falls well within, not only the Standard Oil and Tobacco Cases. [221 U. S. 1, 31 Sup. Ct. 502, 55 L. Ed. 619, 34 L. R. A. (N. S.) 834, Ann. Cas. 1912D, 734; 221 U. S. 106, 31 Sup. Ct. 632, 55 L. Ed. 663], but is of such an unreasonable character as to be within the authority of a long line of eases decided by this court. Among them we may cite: Northern Securities Co. v. United States, 193 U. S. 197 [24 Sup. Ct. 436, 48 L. Ed. 679]; Swift & Co. v. United States, 196 U. S. 375 [25 Sup. Ct. 276, 49 L. Ed. 518]; National Cotton Oil Co. v. Texas, 197 U. S. 115 [25 Sup. Ct. 379, 49 L. Ed. 689]; United States v. St Louis Terminal Association, 224 U. S. 383 [32 Sup. Ct. 507, 56 L. Ed. 810]; and the recent case of United States v. Union Pacific Railway, 226 U. S. 61 [33 Sup. Ct. 53, 57 L. Ed. 124].”
*999In United States v. American Tobacco Co., 221 U. S. 106, 179, 31 Sup. Ct. 632, 648 (55 L. Ed. 663), it is said:
“Applying the rule of reason to the construction of .the statute, it was held, in the Standard Oil Case that as the words ‘restraint of trade’ at common law and in the law of this country at the time of the adoption of the AntiTrust Act only embraced acts or contracts or agreements or combinations which operated to the prejudice of the public interests by unduly restricting competition or unduly obstructing the due course of trade, or which, either- because of their inherent nature or effect, or because of the evident purpose of the acts, etc., injuriously restrained trade, that the words as used in the statute were designed to have and did have but a like significance. It was therefore pointed out that the statute did not forbid or restrain the power to make normal and usual contracts to further trade by resorting to all normal methods, whether by agreement or otherwise, to accomplish such purpose. In other words, it was held, not that acts which the statute prohibited could be removed from the control of its prohibitions by a finding that they were reasonable, but that the duty to interpret, which inevitably arose from the general character of the term ‘restraint of trade’ required that the words ‘restraint of trade’ should be given a meaning which would not destroy the individual right to contract and render difficult, if not impossible, any movement of trade in the channels of interstate commerce — the free movement of which it was the purpose of the statute to protect. 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 t? 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 reaffirm.”
In Nash v. United States, 229 U. S. 373, 376, 33 Sup. Ct. 780, 781 (57 L. Ed. 1232), referring to the Standard Oil and American Tobacco Co. Cases, it is said:
“Those cases may be taken to have established that only such contracts and combinations are within the act as, by reason of intent or the inherent nature of the contemplated acts, prejudice the public interests by unduly restricting competition or unduly obstructing the course of trade.”
In United States v. Freight Association, 166 U. S. 290, 339, 17 Sup. Ct. 540, 558 (41 L. Ed. 1007), the court said:
“The claim that the company has the right to charge reasonaole rates, and that, therefore, it has the right to enter into a combination with competing roads to maintain such rates, cannot be admitted. The conclusion does not follow from an admission of the premise. What one company may do in the way of charging reasonable rates is radically different from entering into an agreement with other and competing roads to keep up the rates to that point. If there be any competition, the extent of the charge for the service will be seriously affected by that fact. Competition will itself bring charges down to what may be reasonable, while in the case of an agreement *1000to keep prices up, competition is allowed no play; it is shut out, and the rate is practically fixed by the companies themselves by virtue of the agreement, so long as they abide by it.”
In Shawnee Compress Co. v. Anderson, 209 U. S. 423, 28 Sup. Ct. 572, 52 L. Ed. 865, the Supreme Court held a certain lease valid so far as the mere power to execute it was concerned, but that it became invalid when it tended directly and in a substantial manner to suppress competition under the common law, the Sherman Anti-Trust Law and the laws of Oklahoma. The decision was upon the sole ground of the undue suppression of competition.
[3] Suppression of competition, where the parties to a combination control a large portion of the interstate or foreign commerce in the article, and where there is no obligation to form the combination arising out of the fact that the parties to the same are losing money, or the like, has been held an undue restraint of trade. See Continental Wall Paper Co. v. Voight & Sons Co., 212 U. S. 227, 29 Sup. Ct. 280, 53 L. Ed. 486; Id., 148 Fed. 939, 78 C. C. A. 567, 19 L. R. A. (N. S.) 143; Swift & Co. v. United States, 196 U. S. 375, 25 Sup. Ct. 276, 49 L. Ed. 518; Addyston Pipe Co. v. United States, 175 U. S. 211, 20 Sup. Ct. 96, 44 L. Ed. 136; United States v. Addyston Pipe Co., 85 Fed. 271, 29 C. C. A. 141, 46 L. R. A. 122; Chattanooga Foundry v. Atlanta, 203 U. S. 390, 27 Sup. Ct. 65, 51 L. Ed. 241; City of Atlanta v. Chattanooga Foundry, 127 Fed. 23, 61 C. C. A. 387, 64 L. R. A. 721; Montague v. Lowrey, 193 U. S. 38, 24 Sup. Ct. 307, 48 L. Ed. 608.
In the United States v. Standard Oil Co. (C. C.) 173 Fed. 177, 184, Sanborn, Circuit Judge, in behalf of himself, Van Devanter, then Circuit Judge, now a Justice of the Supreme Court, and Adams, Circuit Judge, said:
“The purpose of tbis statute was to keep the rates of transportation and the prices of articles in interstate and international commerce open to free competition. Any contract or combination of two or more parties, whereby the control of such rates or prices is taken from separate competitors in that trade and vested in a person or an association of persons, necessarily restricts competition and restrains that commerce. * * * Agreements of competitive manufacturers and traders not to compete in the purchase or sale of articles in interstate commerce, or to buy or to sell them at prices fixed by a mutual agent or association, * * * are alike declared to be illegal by this law. In the construction and enforcement of this statute, corporations are persons, they are legal entities distinct from their stockholders, and the combination of two or more of them in restraint of trade is as unlawful as the combination of individuals.”
In United States v. Addyston Pipe Co., 85 Fed. 271, 282, 29 C. C. A. 141, 151 (46 L. R. A. 122), Taft, Circuit Judge, speaking for Circuit Justice Harlan, the writer of the opinion, and Lurton, Circuit Judge, late a Justice of the Supreme Court, in an opinion exhaustive in its review of foreign and state decisions, quotes with approval from the opinion of Chief Justice Tindal in Horner v. Graves, 7 Bing. 735, the following:
“We do not see how a better test can be applied to the question whether this is or not a reasonable restraint of trade than by considering whether the restraint is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interfere with the *1001Interests of the public. Whatever restraint is larger than the necessary protection of the party requires can be of no benefit to either.- It can. only be oppressive. It is, in the eye of the law, unreasonable. Whatever is injurious to the interests of the public is void on the ground of public policy.”
In the United States v. American Tobacco Co. (C. C.) 164 Fed. 700, 702, 703, in an opinion by Uacombe,. Circuit Judge, on behalf of himself and Coxe and Noyes, Circuit Judges, it is said:
• “What benefits may have come from this combination, or from the others complained of, it is. not material to inquire, nor need subsequent business methods be considered, nor the effects on production or prices. The record in this case does not indicate that there has been any increase in the price of tobacco products to the consumer. There is an absence of persuasive evidence that by unfair competition or improper practices independent dealers have been dragooned into giving up their individual enterprises and- selling out to the principal defendant. * * *
“During the existence of the American Tobacco Company new enterprises have been started, some with small capital, in competition with it, and have thriven. The price of leaf tobacco — the raw material — except for one brief period of abnormal conditions, has steadily increased, until it has nearly doubled, while at the same time 150,000 additional acres have been devoted to tobacco crops and the consumption of the leaf has greatly increased. Through the enterprise of defendant and at large expense new markets for American tobacco have been opened or developed in India, China, and elsewhere. But all this is immaterial. Each one of these purchases of existing concerns, complained of in the petition, was a contract and combination in restraint of a competition existing when it was entered into, and that is sufficient to bring it within the ban of this drastic statute.”
In State v. International Harvester Co., 237 Mo. 369, 394, 141 S. W. 672, 677, the court said:
“In the case at bar we are to take the acts of the parties and judge their purpose by the consequence that would naturally result. When men deliberately and intelligently go to work and acquire power that will enable them to control the market, if they choose to exercise it, there is no use for them to say that they did not intend to control the trade or limit competition, nor when the legality of their act of acquisition is in question is it any use ior them to say, ‘We have not used the power to oppress any one.’ ”
[4] We think it may be laid down as a general rule that if companies could not make a legal contract as to prices or as to collateral services they could not legally unite, and as the companies named did in effect unite the sole question is as to whether they would have agreed on prices and what collateral services they could render, when their companies were all prosperous and they jointly controlled 80 to 85 per cent, of the business in that line in the United States. We think they could not have made such an agreement. Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U. S. 227, 29 Sup. Ct. 280, 53 L. Ed. 486; Id., 148 Fed. 939, 78 C. C. A. 567, 19 L. R. A. (N. S.) 143; Addyston Pipe Co. v. United States, 175 U. S. 211, 20 Sup. Ct. 96, 44 L. Ed. 136; Swift & Co. v. United States, 196 U. S. 375, 25 Sup. Ct. 276, 49 L. Ed. 518.
If the five companies which formed the International had been small, and their combination had been essential to enable them to compete with large corporations in the same line, then their uniting would, in the light of reason, not have been in restraint of trade, but in the furtherance of it; but when they constituted the largest manufacturers of *1002their articles in America, if not in the world, and held Jointly about 80 to 85 per cent, of the trade, and two at least of the companies forming the combination were prosperous, their combining was, when similarly viewed, an unreasonable restraint of trade. If the business of the separate companies combining was unsuccessful, it could be claimed that their combination was reasonable, in view of the rule of reason as proclaimed by the Supreme Court; but it is conceded that the McC.or-mick and the Deering Companies “had established reasonably successful and prosperous businesses,” so that question is eliminated.
There is no limit under the American law to which a business may not independently grow, and even a combination of two or more businesses, if it does not unreasonably restrain trade, is not illegal; but it is the combination which unreasonably restrains trade that is illegal, and if the parties in controversy have 80 or 85 per cent, of the American business, and by the combination of the companies all competition is eliminated between the constituent parts of the combination, then it is in restraint of trade within the meaning of the statute, under all of the decisions.
The International is not only a great manufacturing company, but by the America Company is a great dealer in agricultural implements in interstate and foreign commerce, and so the case comes more nearly within the ruling in Addyston Pipe Co. v. United States, 175 U. S. 211, 20 Sup. Ct. 96, 44 L. Ed. 136, than United States v. Knight, 156 U. S. 1, 15 Sup. Ct. 249, 39 L. Ed. 325.
It seems proper to call attention to the fact that all commerce is classified as intrastate, interstate, or foreign; both the first and second sections of the Sherman Eaw treat interstate and foreign commerce as separate and distinct entities. Foreign commerce is as distinct from interstate commerce as interstate commerce is distinct from intrastate commerce. Each is a unit. While intrastate commerce is within the control of the states, interstate and foreign commerce are both within the control of the United States, but as separate entities or units. The Congress-has condemned any combination in restraint of either the foreign or the interstate trade, and if the International Harvester Company was in restraint of either the interstate or foreign. trade it was unlawful. It would not be lawful to restrain the interstate trade in order to build up the foreign trade. The International, by suppressing all competition between the five original companies, was in restraint of trade as prohibited in the first section of the Sherman Law, and it tended to monopolize within the meaning of the second section of the same law, and this restraint and this monopoly were the direct and immediate effect of the consolidation, and were not incidental and uncertain in their effect.
In Standard Sanitary Manufacturing Co. v. United States of America, 226 U. S. 20, 49, 33 Sup. Ct. 9, 15 (57 L. Ed. 107), the court said:
“The Sherman Law is a limitation of rights, rights which may be pushed to evil consequences and therefore restrained.
“This court has had occasion in a number of cases to declare its principle. Two of those cases we have cited. The others it is not necessary to review or to quote from except to say that in the very latest of them the comprehensive and thorough character of the law is demonstrated and its sufficiency to pre*1003vent evasions of its policy ‘by resort to any disguise or subterfuge of form.’ or the escape of its prohibitions ‘by any indirection.’ United States v. American Tobacco Co., 221 U. S. 106, 181 [31 Sup. Ct. 632, 649 (55 L. Ed. 663)]. Nor can they be evaded by good motives. The law is its- own measure of right and wrong, of what it permits, or forbids, and the judgment of the courts cannot be set up against it in a supposed accommodation of its policy with the good intention of parties, and it may be of some good results. United States v Trans-Missouri Ereight Ass’n, 166 U. S. 290 [17 Sup. Ct. 540, 41 L. Ed. 1007]; Armour Packing Co. v. United States, 209 U. S. 56, 62 [28 Sup. Ct. 428, 52 L. Ed. 681].”
We conclude that the International Harvester Company was from the beginning in violation of the first and second sections of the Sherman Law, and that this condition was accentuated by the reorganization of the America Company and by the subsequent acquisitions of competing plants, and that all the defendant subsidiary companies became from time to time parties to the illegal combination, and the defendant companies are combined to moiíopolize a part of the interstate and foreign trade. It will therefore be ordered that the entire combination and monopoly be dissolved, that the defendants have 90 days in which to report to the court a plan for the dissolution of the entire unlawful business into at least three substantially equal, separate, distinct, and independent corporations, with wholly separate owners and stockholders, or in the event this case is appealed, and this decree superseded, then within 90 days from the filing of the procedendo or mandate from the Supreme Court the defendants shall file such plan, and in case the defendants fail to file such plan within the time limit the court will entertain an application for the appointment of a receiver for all the properties of the corporate defendants, and jurisdiction is retained to make such additional decrees as may become necessary to secure the final winding up and dissolution of the combination and monopoly complained of, and as to costs.