delivered the opinion of the court.
This suit was commenced on July 19, 1907, by the United States, to prevent the continuance of alleged violations of the first and second sections of the Anti-trust Act of July 2, 1890. The defendants were twenty-nine individuals, named in the margin,1 sixty-five American *143corporations, naost of them created in the State of New Jersey, and two English corporations. For convenience of. statement we classify , the corporate defendants, ex-elusive of the two foreign ones, which we shall hereafter, separately refer to, as follows: The American Tobacco Company, a New Jersey corporation, because of its dominant relation to the subject-matter of the controversy as the primary defendant; five other New Jersey corporations (viz., American Snuff Company, American Cigar Company, American Stogie Company, MacAndrews & Forbes Company, and-Conley Foil Company), because of their relation to the controversy as the accessory, and the fifty-nine, other American corporations as the subsidiary defendants.
The ground of complaint against the American Tobacco Company rested not alone upon the nature and character of that corporation and the power which it exerted directly over the five accessory corporations and some of the subsidiary corporations by stock ownership in such corporations, but also upon the control which it exercised over the subsidiary companies by virtue of stock held in said companies by the accessory companies by stock ownership in which the; American Tobacco Company exerted its power of control. The accessory companies were impleaded either because of their nature and character or because of the power exertéd over them through stock, ownership by the American Tobacco Company and also because of the power which they in turn exerted by stock ownership over the subsidiary corporations, and finally the subsidiary corporations were impleaded either because of their nature or because of the control to which they viere subjected in and by virtue of the stock ownership above' stated. . We append in the margin a statement showing *144the stock control exercised by the principal defendant, the American Tobacco Company, over the five accessory cor-, porations and also the authority which it directly exercised over certain of the subsidiary corporations, and a list showing the control exercised over the subsidiary corporations as á result of the stock ownership in the accessory cor-" porations, they being in turn Controlled as wé have said by Ihe principal defendant,.the American Tobacco Company^__1
*145The. two foreign corporations were impleaded éither because of their nature and character and the operation and effect of contracts or-agreements with the American To*146bacco Company, or the power which it exerted over their affairs by stock ownership.
As we shall have occasion hereafter in referring to mat*147ters beyond disputé to set forth the main facts relied upon by the United States as giving rise to the cause of action alleged. against all of the defendants it suffices at this *148moment to say that the bill averred the origin and nature ■ of the American Tobacco Company and the origin and nature of all the other defendant corporations, whether accessory or subsidiary, and the connection of the individual defendants with such corporations. In effect the bill charged that the individual defendants and the defendant corporations were engaged in a conspiracy in restraint of interstate and foreign trade in tobacco and the products of tobacco and constituted a combination in restraint of such trade in violation of the first section of the act, and also were attempting to monopolize and were actually a monopolization of such trade in violation of the second section. In support of these charges general averments were made in the bill as to the wrongful purpose and intent with which acts were committed which it was alleged brought about the alleged wrongfül result.
The prayer of the bill was as follows:
“Wherefore petitioner prays:
*149“1. That the contracts, combinations, and conspiracies in restraint of trade and commerce among the States and with foreign nations, together with the attempts to monopolize and the monopolies of the same hereinbefore described be declared illegal and in violation of the act of Congress passed July 2, 1890, and subsequent acts, and that , they be prevented and restrained by proper orders of the court.
“2. That the agreements, contracts, combinations, and conspiracies entered into by the defendants on or about September 27,1902, and thereafter, and-evidenced among other things by the two written agreements of that date, Exhibits 1 and 2 hereto, be declared illegal, and that injunctions issue restraining and prohibiting defendants from doing anything in pursuance of of in furtherance of the same within the jurisdiction of the United States.
“3. That the Imperial Tobacco Company, its officers,agents, and servants be enjoined .from engaging in interstate or foreign trade and commerce within the jurisdiction of-the United States until it shall cease to observe or act' in pursuance of said agreements, contracts, combinations,, and conspiracies ehtered into by it and other defendants on or about September 27, 1902, and thereafter, and evidenced among other things by the contracts of that date, Exhibits 1 and 2 hereto.
"4. That the British-American Tobacco Company be adjudged an unlawful instrumentality created solely for carrying into effect the objects and purposes of said, contract, combination, and conspiracy entered into on or about September 27, 1902, and thereafter, and that it be enjoined from engaging in interstate or foreign trade and commerce within the jurisdiction of the United States.
“5. That the court adjudge the American Tobacco Company, -the American Snuff Company, the American Cigar Company, the American Stogie Company, the Mac-Andrews & Forbes Company, and the Conley Foil Company is each a combination in restraint of interstate and *150foreign trade and commerce; and that each has attempted and is attempting to monopolize, is- in combination and conspiracy, with other persons and corporations to monopolize, and has monopolized part of the trade and commerce among the several States and with foreign nations; and order and decree that éach one of them be restrained from engaging in interstate or foreign commerce, or, if the court should be of opinion that the public interests will be better subserved thereby, that receivers be!) appointed to.take possession of all the property, assets, busiriéss, and affairs of said defendants and wind up the same, and otherwise take such course in regard thereto as will bring about conditions in trade and commerce among the States and with foreign nations in harmony with law.
. “6. That the holding of stock by one of the defendant corporations in another under the circumstances shown be declared illegal, and that each of them be enjoined from continuing to hold or own such shares in another and from exercising any right in; connection therewith.'
. “7. That defendants, each and all, be enjoinedfrom continuing to carry out the purposes of thé above-described contracts, combinations, conspiracies, and attempts to monopolize by the means herein described, or by any other, and be.required to desist and withdraw from all connection with the same.
‘‘8. That each of the defendant's be enjoined from purchasing leaf tobacco or from .selling and distributing its manufactured output as a part of interstate and foreign trade and commerce in conjunction.or combination with any othér defendant, and from taking part-or being interested. in any agreement of combination intended tó destroy competition among them in reference to such purchases or sales.
■ “9. .That petitioner have such other, further ^nd general relief,as may be proper/’
As to the answers, it ¡Suffices to say that all the individual ' *151and corporate defendants other than the foreign corporations denied the charges of wrongdoing and illegal combination and the corporate defendants in particular in addition averred their right under state charters by virtue of which they existed to own and possess the property which they held and further averred that they were engaged in manufacturing and that any combination amongst them related only to that subject, and therefore was not within the Anti-trust Act. The two foreign corporations asserted the validity of their corporate organization and of the assailed agreements, and denied any participation in the alleged wrongful combination.
After the taking of much téstimony before a special examiner, the -case was heard before a court consisting of four judges, constituted under the expediting act of February 11,1903. In deciding the case in favor of the Government each of the four judges delivered an opinion (164 Fed. Rep. 700). A final decree was entered on December 15, 1908;. The petition was dismissed as to the English corporations, three of the subsidiary corporations, the United Cigar Stores Company and all the individual, defendants. It was decreed that the defendants other thaif those against whom'the petition was dismissed, had theretofore entered into and were parties to combinations in restraint of trade, etc., in violation of the Anti-trust Act and said defendants and each of them, their officers, agents, etc., were restrained and enjoined “from directly or indirectly doing any act or thing whatsoever in furtherance of the objects and purposes of said combinations and from continuing as partiés thereto.” It specifically found that each of the defendants, “The American Tobacco Company, American Snuff Company, American Cigar Company, American Stogie Company, and Mac Andrews & Forbes Company constitutes and is itself a combination in violation of the said Act of Congress.” The corporations thus named, their officers, etc., were next restrained *152and enjoined “from further directly or indirectly engaging in interstate dr foreign trade and commerce in leaf tobacco or the products manufactured therefrom or articles necessary or useful in connection therewith. But if any óf said last-named defendants can hereafter affirmatively show the restoration of reasonably competitive conditions, such defendant may apply to this court for a modification, suspension or dissolution of the injunction herein granted against it.” The decree, then enumerated the various corporations which it was found held or claimed to own some or all of the capital stock of other corporations and particularly specified such other corporations, and then made the following restraining provisions:
“Wherefore each and all of defendants, The-American Tobacco Company, the American Snuff Company, the American Cigar Company, P. Lorillard Company, R. J. Reynolds Tobacco Company, Blackwell’s Durham Tobacco Company and Conley Foil Company, their officers, directors, agents, servants and employés are hereby restrained and enjoined from acquiring by conveyance or otherwise, the plant or business of any such corporation wherein any one of them now holds or owns stock; and each and all of said defendant corporations so holding stock in other corporations as above specified, their officers, directors, agents, servants and employés, are further enjoined from voting or attempting to vote said stock at any meeting of the stockholders of the corporation issuing the same and from exercising or attempting to exercise any control, direction, supervision or influence whatsoever over the acts and doings of such corporation. And it is further ordered and decreed that each and every of the defendant corporations the stock of which is held by any other defendant corporation as hereinbefore shown, their officers, directors, servants and agents, be and they are hereby respectively and collectively restrained and enjoined from permitting the stock so held to be voted by any other de*153fendant holding or claiming to own the same or by its attorneys or agents at any corporate election for directors or officers and from permitting or suffering any other defendant corporation claiming to own or hold stock therein, or its officers or agents, to exercise any control whatsoever over its corporate acts.”
Judgment for costs was given in favor of thé petitioner and against the defendants as to whom the petition had not been dismissed, except the R. P. Richardson, Jr., & Company, a corporation which had consented to the decree. The decree also contained a provision that the defendants or any of them should not be prevented “from the institution, prosecution or defense of any suit, action or proceeding to prevent or restrain the infringement of a trade-mark used in interstate commerce or otherwise assert or defend a claim.to any property or rights.” In the évent of a taking of an appeal to this court, the decree provided that the injunction which it directed “shall be suspended during the pendency of such appeal.”
The United States appealed, as did also the «various defendants against whom the decree was entered. For the Government it is contendéd: 1. That the petition should not have been dismissed as to the individual defendants. 2. That it should not have been dismissed as to the two foreign corporations — the Imperial Tobacco Company and the British-American Tobacco Company and the domestic corporations controlled by the latter, and that, on the contrary, the decree should have commanded the observance of the Anti-trust Act by the foreign corporations so far as their dealings in the United States were concerned, and should have restrained those companies from doing any act in the United States in violation of the Antitrust Act, whether or not the right to do said acts was asserted to have arisen pursuant to the contracts made outside of or within the United States. 3. The petition should not have been dismissed as to "the United Cigar • Stores *154Company. 4. The final decree should have adjudged defendants parties to unlawful contracts and conspiracies. 5. The final decree should have adjudged that defendants were attempting to monopolize and had monopolized parts of commerce, More particularly, it is urged, it should have adjudged that the American Tobacco Company, American Snuff Company, American Cigar Company, American Stogie Company, MacAndrews & Forbes Company, the Conley Foil Company and the British-American Tobacco Company were severally attempting to monopolize and had monopolized parts of commerce, and that appropriate remedies should have been applied. 6. The decree was not sufficiently specific, since it should have described with more particularity the. methods which the defendants had followed in forming and carrying out their unlawful purpose, and should have prohibited the resort to similar methods. 7. The decree should have specified the shares in corporations disclosed by the evidence to be owned by the parties to the conspiracy, and should have enjoinéd those parties from exercising any control over the corporations in which such stock was held, and the latter, if made defendant, from permitting such control, and should have also enjoined the collecting of any dividends upon the stock. 8. The decree improperly provided that nothing therein should prevent defendants from prosecuting or defending suits; also improperly suspended the injunction pending appeal.
The defendants, by their assignments of error, complain because the petition was not dismissed as to all, and more specifically, (a) because they were adjudged parties to a combination in restraint of interstate and foreign commerce, and enjoined accordingly; (b) because certain defendant corporations holding shares in others were enjoined from voting them or exercising control over the issuing company, and the latter from permitting this; and (c) because the American Tobacco Company, American *155Snuff Company, American Cigar Company, American Stogie Company and the Mac Andrews & Forbes Company were adjudged unlawful combinations and restrained from engaging in interstate and.foreign commerce.
' The elaborate arguments made by both sides at bar present in many forms of statement the conflicting contentions resulting from the nature and character of the suit and the defense thereto, the decree of the lower court and the propositions assigned as error to which we have just referred. In so far as all or any'of these contentions, as many of them in fact do, involve a conflict as to the application and effect of §§ 1 and 2 of the Anti-trust Act, their consideration has been greatly simplified by the analysis and review of that act and the construction affixed to the sections in question in the case of Standard Oil Company v. United States, quite récently decided, ante, p. 1. In so far as the contentions relate to the disputed propositions, of fact, we think from the view which we take of the case they need not be referred to, since in our opinion the case can be disposed of by considering only those facts which are indisputable and by applying to the inferences, properly deducible from such facts the meaning and effect of the law as expounded in accordance with the previous decisions of this court.
We shall divide our investigation of the case into three subjects: First, the undisputed facts; second, the meaning of the Anti-trust Act and its application as correctly construed to the ultimate conclusions of fact deducible from the proof; third, the remedies to be applied.
First. Undisputed facts.
The matters to be considered under this heading we think can best be made clear by stating the merest outline of the condition of the tobacco industry prior to what is asserted to have been the initial movement in the combination which the suit assails and in the light so afforded to briefly recite the history of the assailed acts and con*156tracts. We shall divide the subject into two periods, (a) the one from the time of the organization of the first or old American Tobacco Company in 1890 to the organization of the Continental Tobacco Company, and (6) from the date of such organization to the filing of the bill in this case.
Summarizing in the broadest way the conditions which obtained prior to 1890, as to the production, manufacture and distribution of tobacco, the following general facts are adequate to portray the situation.'
Tobacco was grown in many sections of the country having diversity of soil and climate and therefore was subject to various vicissitudes resulting from the places of production and consequently varied in quality. The great diversity of use to which tobacco was applied in manufacturing caused it to be that there was a demand for all the various qualities. The demand for all qualities was not local, but widespread, extending as well to domestic as to foreign trade, and, therefore, all the products were marketed under competitive conditions of a peculiarly advantageous nature. The- manufacture of the product in this country in various forms was successfully carried on by many individuals- or Concerns scattered throughout the country, a larger number perhaps of the manufacturers being in the vicinage of production and others being advantageously situated in or near the principal markets of distribution.
Before January, 1890, five distinct concerns — Allen & Ginter, with factory at Richmond, Va.; W. Duke, Sons & Co., with factories at Durham, North Carolina, and New York City; Kinney Tobacco Company, with factory at New York City; W. S. Kimball & Company, with factory at Rochester, New York; Goodwin & Company, with factory at Brooklyn, New York — manufactured, distributed and sold in the United States and abroad 95 per cent of all the domestic cigarette and less than 8 per cent *157of the smoking tobacco produced in the United States. There is no doubt that these factories were competitors in the purchase of the raw product which ^hey manufactured and in the distribution and sale of the manufactured products. Indeed it is shown that prior to 1890 not onlj? had normal and ordinary competition existed between the factories in question, but that the competition had been fierce and abnormal. In January, 1890, having agreed upon a capital stock of $25,000,000, all to be divided amongst them, and who should be directors,othe concerns referred to organized the American Tobacco Company in New Jersey, “for trading and manufacturing,” with broad powers, and conveyed to it the assets and businesses, including good will and right to use the names of the old concerns; and thereafter this corporation carried on the business of all. The $25,000,000 of stock of the Tobacco Company was allotted to the charter members as follows: Allen & Ginter, $3,000,000 preferred, $4,500,000 commop; W. Duke, Sons & Co., $3,000,000 preferred, $4,500,000 common; Kinney Tobacco Company, $2,000,000 preferred, $3,000,000 common; W. S. Kimball & Co., $1,000,000 pre-. ferred, $1,500,000 common; and Goodwin & Co., $1,000,000 preferred, $1,500,000 common.
There is a charge that the valuation at which, the respective properties were capitalized in the new corporation was enormously in excess of their actual value. We, however, put that subject aside, since we propose only to deal with facts which are not in controversy.
.Shortly after the formation of the new corporation -the Goodwin & Co. factory was closed, and the directors ordered “that the manufacture of all tobacco cigarettes be concentrated at Richmond.” The new' corporation in 1890, the first year of its operation, manufactured about two and one half billion cigarettes, that is, about 96 or 97 per cent of the total domestic output, and about five and- one-half million pounds of smoking tobacco out *158of a total domestic product of nearly seventy million pounds.
In a little over a year after the organization of the company it increased its capital stock by ten million dollars. The purpose of this increase is inferable from the considerations which we now state.
There was a firm known as Pfingst, Doerhoefer & Co., consisting of a number of partners, who had been long and successfully carrying on the business of manufacturing plug tobacco in Louisville, Kentucky, and distributing it through the channels of interstate commerce. In January, 1891, this firm was converted into a corporation known as the National Tobacco Works, having a capital stock of $400,000 all of which was issued to the partners. Almost immediately thereafter, in the month of February, the American Tobacco Company became the purchaser of all the capital stock of the new corporation, paying $600,000 cash and $1,200,000 in stock of the American Tobacco Company. The members of the previously existing firm bound themselves by contract with the American Tobacco Company to enter its service and manage the business and property sold, and each tether agreed that for ten years he would not engage in carrying on, directly or indirectly, or permit or suffer the use of his name in connection with the carrying on of the tobacco business in any form.
In April following, the American Ti^bacco Company bought out the business of Philip Whitlock, of Richmond, Virginia, who was engaged in the manufacture of cheroots and cigars, and with the exclusive right to use the name of Whitlock. The consideration for this purchase was $300,000, and Whitlock agreed to become an employé of the American Tobacco Company for a number of years and not to engage for twenty years in the tobacco business.
In the month of April the American Tobacco Company also acquired the business of Marburg Brothers, a well-known firm located at Baltimore, Maryland, and engaged *159in' the manufacture and distribution of tobacco, principally smoking and snuff. The consideration was a cash payment of $164,637.65 and stock to the amount of $3,075,000. The members of the firm also conveyed the right to the use of the firm name and agreed not to engage in the tobacco business for a lengthy period.
Again, in the same month, the American Tobacco Company bought out a tobacco firm of old standing, also located in Baltimore, known as G. W. Gail & Ax, engaged principally, in manufacturing and selling smoking tobacco, buying with the business’ the exclusive right to use the name of the firm or the partners, and the members of the firm agreed not to engage in the tobacco business for a specified period. The consideration for this purchase was $77,582.66 in cash and stock to the amount of $1,760,000. The plant was abandoned soon after; ..
The result of these purchases wa;s manifested at once in the product of the company for the year 1891, as will appear from a note in the margin.1 It will be seen that as to cheroots, smoking tobacco, fine cut tobacco, snuff and plug-tobacco, the company had become a factor in all branches of the tobacco industry.
Referring to the occurrences of the year 1891, as in all *160respects typical of the occurrences which took place in all the other years of the first period, that is during the years 1892, 1893, 1894, 1895, 1896, 1897 and 1898, we content ourselves with saying that it is undisputed that between .February, 1891, and October, 1898, including the purchases which we have specifically referred to, the American Tobacco Company acquired fifteen going tobacco concerns doing business in the States of Kentucky, Louisiana, ‘ Maryland, Michigan, Missouri, New York, North Carolina and Virginia. For ten of the plants an all cash consideration of $6,410,235.26 was paid, while the payments for the remaining five aggregated in cash $1,115,100.95 and in stock $4,123,000. It is worth noting that the last purchase, in October, 1898, was of the Drummond Tobacco Company, a Missouri corporation dealing principally in plug, for which a cash consideration was paid of $3,457,500.
The corporations which were combined for the purpose of forming the ■ American Tobacco Company produced a very small portion of plug tobacco. That an increase in this direction was contemplated is manifested by the almost immediate increase of the stock and its use for the purpose of acquiring, as we have indicated, in 1891 and 1892, the ownership and control of concerns manufacturing plug tobacco and the consequent increase in that branch of production. There is no dispute that as early as 1893 the president of the American Tobacco Company, by authority of the corporation, approached leading manufacturers of plug tobacco and sought to bring about a combination of the plug tobacco interests, and upon the faihire to accomplish this, ruinous competition, by lowering the price of plug below its cost, ensued. As a result of this warfare, which continued until 1898, the American Tobacco Company sustained severe losses aggregating more than four millions of dollars. The warfare produced its natural result, not only because the company acquired *161during the last two years of the campaign, as we have stated, control of important plug tobacco concerns, but others engaged in that industry came to terms. We say this because in 1898,, in connection with several leading plug manufacturers, the American Tobacco Company organized a New Jersey corporation styled the Continental Tobacco Company, for "trading and manufacturing,” with a capital of $75,000,000, afterwards increased to $100,000,000. Thé new company issued its stoók and took transfers to the plants, assets and businesses of five large and successful competing plug manufacturers.1
The American Tobacco Company also conveyed to this corporation, at large valuations, the assets, brands, real estate and good will pertaining to its plug tobacco business, including the National Tobacco' Works, the James G. Butler Tobacco Co., Drummond Tobacco Company, and Brown Tobacco Co., receiving as consideration $30,274,200 of stock (one-half common and one-half preferred), $300,000 cash, and an additional sum for losses sustained in the plug business during 1898, $840,035. Mr. Duke, the president of the American Tobacco Company, also became president of “the. Continental Company.
Under the preliminary agreement which was. made looking to the formation of the Continental Tobacco *162Company, that company acquired from the holders all the $3,000,000 of the common stock of the P. Lorillard Company in exchange for $6,000,000 of its stock, and $1,581,300 of the $2,000,0'00 preferred in exchange for notes aggregating a sum considerably larger. The Lorillard Company, however, although it thus passed practically under, the control of the American Tobacco Company by virtue of its ownership of stock in the Continental Company, was not liquidated, but its business continued to be conducted as a distinct corporation, its goods being marked and put upon the market just as if they were the manufacture of an independent concern. •
Following the organization of the Continental Tobacco Company the American Tobacco Company increased its •capital stock from thirty-five millions of dollars to seventy millions of dollars, and declared a stock dividend of one hundred per cent on its common stock, that is, a stock dividend of $21,060,000.
As the facts just stated bring us to the end of the first period which at the outset we stated it was our purpose to review, it is" wgU briefly , to point out the increase in the power and control .of the American Tobacco Com-: pany and the extension of its activities to all forms of tobacco products which had been accomplished just prior to the organization of the Continental Tobacco Company. Nothing could show it more clearly than the following: At the end of the time the company was manufacturing eighty-six per cent or' thereabouts of all the cigarettes produced in the United States, above twenty-six per cent of all the smoking tobacco, more than twenty-two per cent of all plug tobacco, fifty-one per cent of all little cigars, six per cent each of all snuff and fine cut tobacco, and over two per cent of all cigars and cheroots.
A brief reference to the occurrences of the second period, that is, from and. after the organization of the Continental Tpbacco Company up to the time of the bringing of this *163suit, will serve to make evident that the transactions in their essence had all the characteristics of the occurrences of the ‘first period.
In the year 1899 and thereafter either the American or the Continental company, for cash or stock, at an aggregate cost of fifty millions of dollars ($50,000,000), bought and closed up some thirty competing corporations and partnerships theretofore engaged in interstate and foreign commerce as manufacturers, sellers, and distributors of tobacco and related commodities, the interested parties covenanting not to engage in the business. Likewise the1 two corporations acquired for. cash, by issuing stock, and otherwise, control'of many competing corporations, now going concerns, with plants in various States, Cuba and Porto Rico, which manufactured, bought, sold and distributed tobacco products'or related articles throughout the United States and foreign countries', and took from the. parties in interest covenants not to engage in the tobacco business.
The plants thus acquired were operated until the merger in 1904, to which we shall hereafter refer, as a part of the general system of the American and Continental companies. The power resulting from and the purpose contemplated in making these acquisitions by the companies just referred to, however, may not be measured by considering alone the business of- the company directly acquired, since some of those companies were made the vehicles as representing the American or Continental company for acquiring and holding the stock of other and competing companies, thus amplifying the power resulting from the acquisitions directly made by the American or Continental company, without' ostensibly doing so. It is besides undisputed that in many instances the ac-' quired corporations-with the subsidiary companies over which they had coátrol through stock ownership were carried on ostensibly as independent concerns disconnected *164from either the American or the Continental company, although they were controlled and owned by one or the other of these companies. Without going into details on these subjects, for the sake of brevity, we append in the margin a statement of the corporations thus acquired, with the mention of the competing concerns which such corporations acquired.1
*165It is of the utmost importance to observe that the acquisitions made by the subsidiary corporations in some cases likewise show the remarkable fact stated above, that is, the disbursement of enormous amounts of money to *166acquire plants, which on being purchased were not utilized but were immediately closed. It is also to be remarked, that the facts stated in the memorandum in the margin show on their face a singular identity between the conceptions which governed the transactions of this latter period with those which evidently existed at the very birth of the original organization of the American Tobacco Company, as exemplified by the transactions in the first period. A statement of particulár transactions outside of those previously referred to as having occurred during the period in question will serve additionally to make thé situation clear. And to accomplish this purpose we shall, as briefly as may be consistent with clarity, separately .refer to the facts concerning the organization during the *167second period of the five corporations which were named as defendants in the bill, as heretofore stated and which for the purpose of designation we have hitherto classified as accessory defendants, such corporations being the American Snuff Company, American Cigar Company, American Stogie Company, MacAndrews & Fórbes Company (licorice), and Conley Foil Company.
(1). The American Snuff Company.
As we have seen, the American Tobacco Company at the commencement of the first period produced a very small quantity of snuff. Its capacity, however, in that regard was augmented owing particularly to the formation of the Continental Tobacco Company and the acquisition of the Lorillard Company, by which it came to be a serious factor as a snuff producer. There shortly ensued an aggressive competition in the snuff business between the American Tobacco Company, with the force acquired from the vantage ground resulting from the dominancy of its expanded organization, and others in the trade operating independently of that organization. The result was identical with that which had previously arisen from like conditions in the past.
In March, 1900, there was organized in New Jersey a corporation known as The Ameriéan Snuff Company, with a capital of $25,000,000, one-half preferred and one-half cpmmon, which took over the snuff business of the P. Lorillard Company, Continental Tobacco Company and The American Tobacco Company, with that of a large competitor, viz: The Atlantic Snuff Co. The stock of the new company was thus apportioned: Atlantic Snuff Company, preferred, $7,500,000, common, $25,000,000-; P. Lorillard Company, preferred, $1,124,700, common, $3,459,400; The American Tobacco Compány, preferred, $1,177,800, common, $3,227,500; Continental Tobacco Company, preferred, $197,500, common, $813,100. The stock issued to Continental Tobacco Company and the *168defendants, P. Lorillard Company and the American Tobacco Company, is still held by the latter, and they have at all times had a controlling interest in the Snuff Company. All the companies, together with their officers and directors, covenanted that they would not thereafter engage as competitors in the tobacco business Or the manufacture, sale, or distribution of snuff.
Among the assets transferred by the Atlantic Snuff Company to American Snuff Company were all the shares ($600,000) of W. E. Garrett & Sons, Inc., then and now one of the oldest and very largest producers of snuff, for a long time and still engaged at Yorkland, Del., in interstate and foreign commerce in tobacco and its products, and which controlled through stock ownership the Southern Snuff Company, Memphis, Tenn.; Dental Snuff Company, Lynchburg, Va., and Stewart-Ralph Snuff Company, Clarksville, Tenn. The separate existence of W. E. Garrett & Sons, Inc., has been preserved and its business conducted under the corporate name. In March, 1900, the American Snuff Company acquired all the shares of George W. Helme Company, one of the oldest and largest producers of snuff and actively engaged at Helmetta, N. J., in interstate and foreign commerce in competition with defendants, by issuing in exchange therefor $2,000,000 preferred stock and $1,000,000 common; and it thereafter took a conveyance of all assets of the acquired company and now operates the plant under its own name.
As a result of the transactions just stated it came to pass that the American Tobacco Company, which had at the end of the first period only a very small percentage of the snuff manufacturing business, came virtually to have the dominant control as a manufacturer of that product.
2. Conley Foil Company — manufacturers of tinfoil, an essential for packing tobacco products.
In December, 1899, the American Tobacco Company secured control of the business of John Conley & Sons, a *169partnership of New York City. By agreement the Conley Foil Company was incorporated in New York "for trading and manufacturing,” etc., with $250,000 capital, ultimately increased to $825,000. The corporation took over the business and assets of the firm, and the American Tobacco Company became owner of a majority of the shares of stock. The Conley Foil Company has acquired all the shares, of stock of the Johnson Tinfoil & Metal Company, of St. Louis, a leading competitor, and they supply under fixed contracts at remunerative prices the tinfoil used by the defendants, which constitutes the major part of the total production in the United States.
3. American Cigar Company.
Prior to 1901 the American and Continental tobacco companies' manufactured, sold, and distributed cigars, stogies, and cheroots. In the year stated the companies determined to engage in the business upon a larger scale. Under agreement with Powell, Smith & Company, large manufacturers and dealers in cigars, they caused the incorporation in New Jersey of the American Cigar Company "for trading and manufactúring,” etc., to which all three conveyed their said business, and it has since carried on the same. The American and Continental companies each acquired 46*4 per cent of the shares, and Powell, Smith & Company 7 per cent; the original capitalization was $10,000,000 (afterwards $20,000,000), and more than three-fourths is owned by the former. The Cigar Company acquired many competitors (partnerships and corporations) engaged in interstate and foreign commerce, taking from the parties covenants against engaging in the tobacco business; and it has also procured the organization of controlled corporations which have acquired competing manufacturers, jobbers and. distributors in the United States) Cuba and Porto Rico. It manufactures, sells and distributes a considerable per centage of domestic cigars; is the dominating factor in the tobacco business, *170foreign and domestic, in Cuba and Porto Bico, and is there engaged in tobacco planting. It also controls corporate jobbers in California, Alabama, Virginia, Pennsylvania, Georgia, Louisiana, New Jersey and Tennessee.
4. The MacAndrews & Forbes Company — manufacturers' of licorice.
There is no question that licorice paste is an essential ingredient- in the manufacture of plug tobacco, and that one who is debarred from obtaining such paste would therefore be unable to engage in or carry on the manufacture of such product. The control over this article was thus secured: In May, 1902, the Continental-Company secured control.of MacAndrews & Forbes Co. of Newark,' New Jersey, and organized “for trading and manufactur-r ing” a corporation known as the MacAndrews & Forbes Co., with a capital of $7,000,000, $4,000,000 preferred' and $3,000,000 common, which took ■ over - the business of MacAndrews & Forbes and another large competitor. The Continental Company acquired two-thirds of the common stock by agreeing to' purchase its supply of pasté from the new company. The American Tobacco'Company, at the time of the filing the bill, was the owner of $2,112,900 of the common stock and .$750,000 preferred. By various .purchases and agreements the MacAndrews & Forbes Company acquired, substantially, the business of. all competitors. Thus, in June, 1902, it purchased the business of the Stamford Mfgl Co., of Stamford, Connecticut, and incorporated the National Licorice Company, which acquired.the business of Young & -Smylie and F. B. & V. P. Scudder, and the National Company agreed with MacAndrews & Forbes not to produce licorice, for tobacco manufacturers. In 1906 all the stock in the J. S. Young Company ($1,800,000), which had been.organized to take over the business of the J. S. Young Co. of Baltimore, Md., was acquired by the MacAndrews & Forbes Co. The MacAndrews & Forbes Co. use in excess *171of ninety-five per cent of the licorice root consumed in the United States.
5. American Stogie Company.
In May, 1903, the American Cigar Company and the American and Continental Tobacco Companies' caused .the American Stogie Company to be incorporated in New Jersey, with $11,979,000 capital, which immediately took over the stogie and tobie business of the companies named, in exchange for $8,206,275 stock and then in the usual ways acquired the business of others in the manufacture, sale, and distribution of such products, with covenants not to compete. It acqúired in exchange for $3,647,725 stock all shares of United States Cigar Company (which had previously acquired and owned the business of important competitors) and subsequently took the conveyance of the plant and assets. The majority shares always have been' held by defendant, the American Cigar Company.
As we think the legitimate inferences deducible from the undisputed facts which we have thus stated will be sufficient to dispose of the controversy, we do not deem it necessary to expand this statement so as to cause it to embracé. a recital of the undisputed facts concerning the entry of the. American Tobacco Company into the retail tobacco trade through the acquisition of a controlling interest in the stock of what is known as’ the United Cigar Stores Company, as well as to some other subjects .which for the sake of brevity we likewise pass over, , in order to come at once to a statement concerning the foreign companies,
The English Companies.
In September, 1901, the American Tobacco Co. purchased for $5,347,000 a Liverpool (Eng.) corporation, known as Ogden’s Limited, there engaged in manufacturing and distributing tobacco products. A trade conflict, which at once ensued caused many of the English manufacturers to combine into an incorporation known as the *172Imperial Tobacco Company of Great Britain and Ireland, capital 15,000,000, afterwards increased to 18,000,000, pounds sterling. The trade war was continued between this corporation arid the American Tobacco Company, with a result substantially identical with that which had hitherto, as we have seen, arisen from such a situation.
In September, 1902, the Imperial and the American companies entered into contracts (executed in England) stipulating that the former should limit its business to the United Kingdom, except purchasing leaf in the United States (it buys 54,000,000 pounds annually); that the American companies should limit their business to the United States, its dependencies and Cuba; and that the British-American Tobacco Company, with capital of 6,000,000 pounds sterling, apportioned between them, should be organized, take over the export business of both, and operate in other countries, etc. This arrangement, was immediately put into effect, and has been observed.
The Imperial Company holds one-third and the American Company two-thirds of the capital stock of the British-American Tobacco Company, Limited. The latter company maintains a branch office in New York City and,the vice-president of the American Tobacco Company is a principal officer. This company uses large quantities of domestic leaf, partly exported to various plants abroad and about half manufactured here and then exported. By agreement, all this is purchased through the American Tobacco Company. In addition to many plants abroad it has warehouses in various States and plants at Peters-burg, Va., and Durham, N. C., where tobacco is manufactured and then exported.
The purchase of necessary leaf tobacco in the United States by the Imperial Company is now made through a resident general agent and is exported as a part of foreign commerce.
Not to break the continuity of the narrative of facts we *173have omitted in the proper chronological order to state the facts relative to what was known as the Consolidated Tobacco Company. We now particularly refer to that subject.
The Consolidated Tobacco Co.
In June, 1901, parties largely interested in the American and Continental companies caused the incorporation in New Jersey of the Consolidated Tobacco Company, capital $30,000,000 (afterwards $40,000,000), with broad powers and perpetual' existence; to do business throughout the world, and to guarantee securities of other companies, etc. A majority of shares was taken by a few individuals connected with the old concerns: A. N. Brady, J. B. Duke, .A. H. Payne, Thomas Ryan, W. C. Whitney, and P. A. B. Widener. J. B. Duke, president of both the old companies, became president of the Consolidated. Largely in exchange for bonds the new company acquired substantially all the shares of common stock of the old ones. Its business, of holding and financing, was continued until 1904, when, with. the American and Continental companies, it was merged into the present American Tobacco Company.
By proceedings in New Jersey, October, 1904, the (old) American Tobacco Company, Continental Tobacco Company and Consolidated Tobacco Company were merged into one corporation, under the name of The American Tobacco Company, the principal defendant here. The ■merged company, with perpetual existence, was capitalized at $180,000,000 ($80,000,000 preferred, ordinarily without power to vote).
The powers conferred by the charter are stated in the ■ margin.1
*174Prior, to the merger the Consolidated Tobacco Company, a majority of whose $40,000,000 share capital was held by J. B. Duke, Thomas F. Ryan, William C. Whitney, Anthony N. Brady, Peter A. B. Widener and Oliver H. Payne, had acquired, as already stated, nearly all common shares of both old American and Continental companies, and thereby control. The preferred shares, however, were held by many individuals. Through the method of distribution of the stock of the new company, in exchange for shares in the old American and in the Continental Company, it resulted that the same six men in control of the combination through the Consolidated Tobacco Company continued that control by. ownership of - stock in the merged or new American Tobacco Company. The assets, property, et.c., of the old companies passed to the American Tobacco Company (merged), which has since carried on the business.
The record indisputably discloses that after this merger the same methods which were used from the beginning continued to be employed. Thus, it is beyond dispute: First, that since the organization of the new American Tobacco Company that company has acquired four large tobacco concerns, that restrictive, covenants against engaging in the tobacco business were taken from the sellers, and that the plants were not continued in operation but *175were at once abandoned. Second, that the new company has besides acquired control of eight additional concerns, the business of such concerns being now carried on by four separate corporations, all absolutely controlled by the American Tobacco Company, although the connection as to two of these companies with that corporation was long and persistently denied.
Thus reaching the end of the second period and coming to the time of the bringing of the suit, brevity prevents us from stopping to portray the difference between the condition in 1890 when the (old) American Tobacco Company was organized by the consolidation of five competing cigarette concerns and that which existed at the commencement of the suit. 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 finah inferences properly deducible from the undisputed faej& which we have stated.
The construction and application of the Anti-trust Act.
If the Anti-trust Act 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 *176more 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 Act 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 United States v. Standard Oil Co., 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 first and second sections "of the act. Again, if it were held that the corporations, the existence whereof was due/ to á 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 combinatipns but whose power alone arose from the exercise of the right to acquire and own property 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 *177and 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 necessity of relief as to all these aspects, we think, seemed to the Government so essential, and the difficulty of giving to the act such a comprehensive and coherent construction as woflld be adequate to enable it to meet the entire situation, led tówhat appears to us to be in their essence a resort to methods of construction not compatible one with the other. And the same apparent conflict is presented by the views of the act taken by the defendants when their , contentions are accurately tested. Thus the Government, for the purpose of fixing the illegal character of the original combination which organized the old American Tobacco Company, asserts that the illegal character of the combination is plainly shown because the combination was brought about to stay the progress of a flagrant and ruinous trade war. In other words, the contention is that as the act forbids every contract, and combination, it hence prohibits a reasonable and just agreement made for the purpose of ending a trade, war. But as thus construing the act by the rule of the letter which kills, would necessarily operate to take out of the reach of the act some one of the accessory and many subsidiary corporations, the existence of which depend not at all upon combination or agreement or contract, but upon mere purchases of property, it is insisted in many forms of argument that the rule of construction to be applied must be the spirit and intent of the act and therefore its prohibitions must be held to extend to acts even if not within the literal terms of the statute if they arc within its spirit because done with an intent to bring about the harmful results which it was the purpose of the statute to prohibit. So as to the defendants. While itis argued on the one hand that the forms by which various properties *178were acquired in view of the letter of the act exclude manjf of the assailed transactions from condemnation, it is yet urged that giving to the act the broad construction which it should rightfully receive,, whatever may be the, form, no condemnation should follow, because, looking at the. casé as a whole, every act assailed is shown to haye been but a legitimate and lawful result of the exertion of honest business methods brought into: play for the purpose of advancing trade instead of with the object of obstructing and restraining the same. But the difficulties which arise, from thé complexity of the particular dealings which are here involved and the situation which they produce, we think grows out of a plain misconception of both the. letter and spirit of the Anti-trust Act. We say of the letter, because while seeking by a narrow rule of the letter to include things which it is deemed would otherwise be excluded, the contention really destroys the great purpose of the act, since it renders it impossible to •apply the law to a multitude of wrongful acts, which would come within the scope of its remedial purposes by resort to a reasonable construction, although they would not be within its reach by a'too narrow and unreasonable adherence to the strict letter. . This must be the case unless it be possible in reason to say that for the purpose, of including one class of acts which would not otherwise be embraced a literal construction' although in conflict with reason must be applied and for the purpose of including other acts which would not otherwise be embraced a reasonable construction must be resorted to. That is to say two conflicting rules of construction must at one and the same time be applied and adhered to.
The obscurity and resulting uncertainty however, is now but an abstraction because it has been removed by the consideration which we have given quite recently to. the construction of the Anti-trust Act in the Standard Oil Case. In that case it was held, without departing from *179any previous decision of the court" that as the statute had, not defined the words restraint of trade, it became necessary to 'construe those words, a duty which could, only be discharged by a resort to reason. We say thé doctrine thus . stated was. in accord with all the previous decisions of this court, despite the fact that the contrary view was sometimes erroneously attributed to sople of the expressions used in two prior decisions (the Trans-Missouri Freight Association and Joint Traffic cases, 166 U. S. 290, and 171 U. S. 505). That such view was a mistaken one was fully pointed out in the Standard Oil Case and is additionally shown by a passage in the opinion in the Joint Traffic Case as follows (171 U. S. 568): “The act of Congress must have a reasonable construction, or else there would scarcely be an agreement or • contract among business.men that could not be said to have, indirectly or remotely, some bearing on interstate commerce, and possibly to restrain it.” 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 Anti-trust 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 á 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 *180that 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 uñiversal 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 tha,t 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 giviifg 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, reéxpress 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 óf no moment. This follows because although it was held in the Standard *181Oil 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 arid 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.
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 were 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 *182the 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 thé tobacco trade which actually exists, but because we think the conclusion of wrongful purpose and illegal combination is overwhelmingly established by the following considerations: a. By the fact that the very- first' organization or combination was impelled by a previously existing fierce trade war, evidently inspired by one or more of the minds which brought about and became parties to ’ that combination, b. Because, immediately after that combination and the increase of capital which followed, the acts which ensued justify the inference that the intention existed to use the power of the combination as a vantage ground to further monopolize the trade in tobacco by means of trade conflicts designed to injure others, either by driving competitors out of the business or compelling them to become parties to a combination — a purpose whose execution was Illustrated by the plug war which ensued and its results, by the snuff war .which followed and its results, and by the conflict which immediately followed the entry of the combination fn England and the division of the world’s business by the two foreign contracts which ensued. c. By the ever-present manifestation which is exhibited of a conscious wrongdoing by the form in which the various transactions were embodied from the beginning, ever changing but ever in substance the same. Now the organization of a new company, now the control exerted by the taking of stock in one or another or in several, so as to obscure the result actually attained, nevertheless uniform, in their manifestations of the purpose to restrain others and to monopolize and retain power in thAhands of the *183few who, it would seem, from the beginning contemplated the mastery of the trade which practically followed. d. By the gradual absorption of control over all the elements essential to the . successful manufacture of tobacco products, and placing such control in the hands of seemingly independent corporations serving as perpetual barriers to the entry of others into the tobacco tradé. e. By persistent expenditure of millions upon millions of dollars in buying out plants, not for the purpose of utilizing them, but in order to close them up and render bhem useless for the purposes of trade. /. By the constantly recurring stipulations, whose legality, isolatedly viewed, we are not considering, by which numbers of persons, whether manufacturers, stockholders or employés, were required to bind themselves, generally for long periods, not to compete in the future. Indeed, when the result's of the undisputed proof which we have stated are fully apprehended, and the wrongful acts which they exhibit are considered, there .comes inevitably to the mind the conviction that it was, the danger which it was deemed would arise to individual liberty and the public well-being from acts like those which this record exhibits, which led the legislative mind to conceive and to enact the Anti-trust Act, considerations which also serve to clearly demonstrate that the combination here assailed is within the law as to leave no doubt that it is our plain duty to apply its prohibitions.
In stating summarily, as we have done, the conclusions which,' in our opinion, are plainly deducible from the undisputed facts, we have not paused to givé the reasons why we consider, after great consideration, that the elaborate arguments advanced to affix a different complexion to the case are wholly devoid of merit. /We do not, for the sake of brevity, moreover, stop to examine and discuss the various propositions urged in the argument at bar for the purpose of demonstrating that the subject-matter of the combination, which we find to exist and the *184combination itself are not within the scope of the Antitrust Act because when rightly considered they are merely matters of intrastate commerce and therefore subject alone to state control. We have done this because the want of merit in all the arguments advanced on such subjects is so completely established by the prior decisions of this court, as pointed out in the Standard Oil Case, as not to require restatement.
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 became cooperators in the combination — conies within the prohibitions of the first and second 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.
Our conclusion being that the combination as a whole, involving all its cooperating or associated parts, in whatever form clothed, constitutes a restraint of tr,ade within the first section, and an attempt to monopolize or a monopolization within the second section of the Antitrust Act, it follows that the relief which we are to afford 'must be wider than that awarded by the lower court, since that court merely decided that certain of the corporate defendants constituted combinations in violation of the first section of the act, because of the fact that they were formed by the union of previously competing concerns and that the other defendants not dismissed from the action were parties to such combinations or promoted their purposes. We hence, in determining the relief proper to be given, may not model our action upon that granted by the court below, but in order to enable us to *185award relief coterminous with the ultimate redress of the wrongs which we find to exist, we must approach the subject of relief, from an original point of view.. Such subject necessarily takes a two-fold aspect — the character of the permanent relief required and the nature of the temporary relief essential to be applied pending the working out of permanent relief in the event that it be found that it is impossible under the situation as it now exists to at once rectify such existing wrongful condition. In considering the subject from both of these aspects three dominant influences must guide our action: .1. The duty of giving complete • and efficacious effect to the prohibitions of the statute; 2, the accomplishing of this result with aslittle injury as possible to the interest of the general public; and, 3, a proper regard for the vast interests of private property which may have become vested in many persons as a result of the acquisition either by way of stock ownership, or otherwise of interests in the stock or securities. of the combination without any guilty knowledge or intent in any way to become actors or participants in the wrongs which we find to have inspired and dominated. the combination from the beginning. Mindful of these considerations and to clear the way for their application we say at the outset without stopping to amplify the rea-sons which lead us to that conclusion, we think that the court below clearly erred in dismissing the individual defendants, the United Cigar Stores Company, and the foreign corporations and their subsidiary corporations.
Looking at the situation as we have hitherto pointed • it out, it involves difficulties in the application of remedies greater than have been presented by any case involving the Anti-trust Act which has been hitherto considered by this court: First. Because in this case it is obvious that a mere decree forbidding stock ownership by one part of the combination in another part or entity thereof, would afford no adequate measure of relief, since different *186ingredients of the combinafion would remain unaffected, and by the very nature and character of their organization would be able to continue the wrongful situation, which it is our duty to destroy. Second. Because the methods of apparent ownership by which the wrongful intent was, in part, carried out and the subtle devices which, as we have seen, were resorted to for the purpose of accomplishing the wrong contemplated, by way of ownership or otherwise, are of , such a character that it is difficult if not impossible to formulate, a remedy which could restore in their entirety the prior lawful conditions. . Third. Because the methods devised by which the various essential elements to the successful operation of the tobacco business from any particular aspect have been so separated, under various subordinate combinations, yet so unified by way of the control worked out by the scheme here condemned, are so involved that any specific form of relief which we might now order in substance and effect might operate really to injure the public and, it may be, to perpetuate the wrong. Doubtless it was the presence of these difficulties which caused the United States, in its prayer for relief to tentatively suggest rather than to specifically demand definite and precise remedies. We might at once resort to one or the other of two general remedies — a, the allowance of a permanent injunction restraining the combination as a universality and aH the individuals and corporations which' form á part of or cooperate in it in any manner or form from continuing to engage in interstate commerce until the illegal situation be cured, a measure of relief which would accord in substantial effect with that awarded below to the extent that the court found illegal combinations to exist; or, b, to direct thé appointment of a receiver to take charge of the assets and' property in this country of the combination in all its ramifications for the purpose of preventing a continued violation of the law, and thus working out by a sale of the
*187property of the combination or otherwise, a condition of things which would not be repugnant to the. prohibitions of the act. But, having regard to the principles which we have said must control our action, we do not think we can now direct the immediate application of either of. these remedies. We so consider as to the first because in view of the extent of the combination, the vast field which it covers, the all-embracing character of its activities concerning tobacco and its products, to at once stay the movement in interstate commerce of the products which the combination or its cooperating forces produce or control' might inflict infinite injury upon the public by leading to a stoppage of supply and a great enhancement of prices., The second because the extensive power which would result from at once resorting to a receivership might not only do grievous injury to the public^ but also cause widespread and perhaps irreparable loss to many innocent people. Under these circumstances, taking into mind the complexity of the situation in all of its aspects and giving weight to the many-sided considerations which müst 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 decreed to be in restraint of trade and an attempt to monopolize and a monopolization within the first and second sections of the 'Anti-trust Act. 2d. That the court below, in order to give 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 metbiod 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. 3d. That for the accomplish*188ment of these purposes, táking 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 consequence 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.
Pending the bringing about of the result just stated, each and all of the defendants, individuals as well as corporations, should be restrained from doing any act which might further extend or enlarge the power of the combination, by any means or device whatsoever. In view of the considerations we have stated we leave the matter to the court below to work out a compliance with the law without unnecessary injury to the public or the rights of private property.
While in many substantial respects our conclusion is in accord with that reached by the court 4below, and while also the relief which we think should be awarded in some respects is coincident with that which the court granted, in order to prevent any complication and to clearly define the situation we think instead of affirming and modifying, our decree, in view of the broad nature of our conclusions, should be one of reversal and remanding with directions to the^ court below to enter a decree in conformity with this opinion and to take such further steps as maybe necessary to fully carry out the directions which we have given.
And it is so ordered.
James B. Duke, Caleb C.'Dula, Pereival S.,HilI, George Arents, Paul Brown, Robert B, Dula, George A..Helme, Robert D. Lewis, Thomas J. Maloney, Oliver H. Payne, Thomas F. Ryan, Robert K. Smith, George W; Watts, George G. Allen, John B. Cobb, William R. Harris, William H. McAlister, Anthony N. Brady, Benjamin N. Duke, *143H. M. Hanna, Herbert D. Kingsbury, Pierre Lorillard, Rufus L. Patterson, Frank H. Ray, Grant B. Schley, Charles N. Strotz, Peter A. B. Widener, Welford C. Reed (now deceased), and Williamson W. Fuller.
Extent of control of American Tobacco Company over the accessory corporations:-
cAmerican Snuff Company — of 120,000 shares of preferred stock owns 12,517 shares directly and 11,274 shares by reason of stock control of P. Lorillard Go., in all 23,764 shares; of 110,017 shares of common stock owns 41,214 directly and 34,594 by reason of stock control o'f P. Lorillard Co., in all 75,808 shares.
American Cig.ar Company — of 100,000 shares of preferred stock owns 89,700 shares directly and 5,000 shares through control of American Snuff Co., in a}} 94,700 shares; of 100,000 shares of feommon stock owns directly 77,451 shares.
America^, Stogie Company — of 108,790 shares of common stock controls 73,072% shares through stockdnterest in American Snuff Company. The American Stogie Company owns all of the stock— 12,500 — of the Union American Cigar Company — cigars and stogies.
MacAndrews & Forbes Company — of 37,585-shares of preferred stock (ño voting p$wer) owns 7,500 shares; of 30,000 shares of common stock owns 2i,129 shares directly and 983 shares through stock control of the R. J. Reynolds Co., in all 22,112 shares.
The Conley Foil Compariy• — of 8,250 shares of stock, directly owns 4,950 shares.
The American Tobacco Company — by stock ownership is the owner outright of the following defendant companies: S. Anargyros [The S. Anargyros Company owns all the capital stock (10 shares) of the London Cigarette Co.]; F. F. Adams Tobacco Co.; Blackwell’s Durham Tobacco Co.; Crescent Cigar and Tobacco Co.; Day and Night Tobacco Co.; Luhrman & Wilbern Tobacco Co.; Nall & Williams Tobacoc■ Co.; Nashville Tobacco Works; R. A. Patterson Tobacco Co.; Monopol Tobacco Works; Spalding & Merrick.
*145The American Tobacco Co. also has the stock interest indicated in the following defendant corporations:
British-American Tobacco Co. — owns 1,200,000 shares of 1,500,000 shares of preferred-stock and 2,280,012 shares of 3,720,021.shares of common stock.
The Imperial Tobacco Co., &c. — owns 721,457 pounds sterling of 18,000,000 pounds sterling of stock.
The John Bollman Co. — of 2,000 shares of stock owns 1,020 shares.
F. R. Penn Tobacco Co. — Of 1,503 shares of stock owns 1,002 shares (through Blackwell’s Durham Tobacco Co.).
R. P. Richardson, Jr., & Co., Inc. — owns 600- out of 1,000 shares of stock and $120,000 of $200,000 issue- of bonds.
R. J. Reynolds Tobacco Co. — owns 50,000 out of 75,250 shares of stock.
Pinkerton Tobacco Co. — owns 775 out of 1,000 shares of stock.
Reynolds Tobacco Co. (of Bristol, Tenn.) — owns 1,449 shares out of 2,500 shares.
J. W. Carroll Tobacco Co. — owns 2,000 out of 3,000 shares. P. Lorillard Co. — owns 15,813 out of 20,000 shares of preferred and all the common stock (30,000 shares).
Kentucky Tobacco Product Co. — owns 14 of 1,900 shares preferred and owns directly 5,264, and, through the American Cigar Co., 355 out of 8,100 shares of common stock. [The Kentucky To-' bacco Product Co. owns all the capital stock (100 shares) of the Kentucky Tobacco Extract Co.]
Porto Rican-Ameriean Tobacco Co. — owns directly 6,578, and, through the American Cigar Co., 6,576 of 19,984 shares of stock. [The Porto Rican-American Tobacco Co. owns 190 of the 380 shares of preferred and 300 of the 450 shares of common stock of Ind. Co. of Porto Rico; also owns 2,150 of the 5,000 shares of capital stock of the Porto Rico Leaf Tobacco Co.]
The American Tobacco Company is also interested, as indicated, in the following defendants, supply or machinery companies: .
Golden Belt Manufacturing Co. (cotton bags) — owns 6,521 of 7,000 shares.
Mengel Box Co. (wood.en boxes) — British-American Tobacco Co.- owns . 3,637 of 5,000 shares of stock.
[The Mengel Company owns all of the capital stock of the Columbia *146Box Company and of the Tyler Box Company, respectively 1,500 • and 250 shares.]
Amsterdam Supply Co. — (agency to purchase supplies) — owns majority of stock and controls large part of remainder through subsidiary companies.
Thomas Cusack Co. — (bill posting) — owns 1,000 out of 1,500 shares.
Manhattan Briar Pipe Co. — owns all of stock, 3,500 shares.
International Cigar Machinery Co. — of 100,000 shares owns 33,637 shares directly and 29,902 shares through Am. Cigar Co. — in all 63,539 shares.
The American Tobacco Company is also interested in the following companies, not named as defendants:
American Machine & Foundry Co. — owns 510 shares directly and remainder (490) through Am. Cigar Co.
New Jersey Machine Co. — owns 510 shares directly and remainder (490) through Am. Cigar Co. .
Standard Tobacco Stemmer Co. — of 17,300 shares owns 16,895 shares.
Garson Vending Machine Co. — of 500 shares owns 250 shares.
The American Snuff Company in addition to stock, etc., interests in the American Tobacco Co., American Cigar Company, and the Amr sterdam Supply Company, has stock interests in the following defendants:
H. Bolander — owns all of stock, 1,350 shares;
De Voe Snuff Co. — owns all of stock, 500 shares. [The De Voe Snuff Co. owns all the capital stock, 400 shares of Skinner.& Co., snuff.]
Standard Snuff Co. — owns all of stock, 2,816 shares.
The American Cigar Co. in addition to stock interests in the Amsterdam Supply Co., American Stogie Co., Porto Rican-Ameriean Tobacco Co., Kentucky Tobacco Product Co. and International Cigar Machinery Co., has the stock interest indicated in the following defendants: R. D. Burnett Cigar Co. — owns 77 out of Í50 shares;
M. Blaskower Co. — owns 1,875 out of 2,500 shares pref. and 1,875 • out of 2,500 shares of common. •
*147Cuban Land & Leaf Tobacco Co. — owns all of stock, 1,000 shares. [The Cuban Land, &c., Co. owns 1,320 of the 1,890 shares of stock of the Vuelta Abajo S. S. Co.]
Cliff Weil Cigar Co. — owns 255 out of-500 shares.-
Dusel, Goodloe & Co. — owns 510 out of 750 shares.
Federal Cigar Real Estate Co. — owns all stock; 6,000 shares.,
J. J. Goodrum Tobacco Co. — owns 477 out of 600 shares.
Havana-Ameriean Co. — owns all stock, 2,500 shares.
Havana Tobacco Co. — owns 700 shares out of 47,038 preferred, 166,800 out of 297,912 common stock, and $3,500,000 of $7,500,000 bonds.
Jordan Gibson & Baum Co., Inc. — owns all preferred and common stock, 250' shares each.
Louisiana Tobacco Co., Limited — owns 375 out of 500 shares.
The J. B. Moos Company — owns all of stock, 2,000 shares.
J. & B. Moos — owns all of common stock, 1,000 shares.
Porto Rican Leaf Tobacco Co. — owns 2,500 out óf"5-,6QQ shares.
The Smokers’ Paradise Corporation — owns all of common stock (250 shares) and 349 of 500 shares preferred.
Havana Tobacco Co. has a stock interest in the following corporations:
H. de Cabanis y Carbajal — all'of stock, 15,000 shares.
Hy. Clay and Bock & Co., Lim. — owns 9,749 out of 16,950 shares preferred and 14,687 out of 15,990 shares common.
[The Hy. Clay, &c., Co. is owner of 16,667 shares of the ordinary capital stock of the Havana Cigar & Tobacco Factories, Limited; and also-owns 64 shares of -t.he 1.890 shares of the capital stock of the
Vuelta Abajo S. S. Co.]
Cuban Tobacco Co. — owns all of stock, 50 shares.
Havana Commercial Co. — owns 55,562 out of 60,000 shares preferred and' 124,71S out of 125,000 shares common.
[The Havana Commercial Co. owns all of the capital stock — 100 shares —of the M„Válle y Co. — cigars.] . v
Havana Cigar & Tobacco Factories, Lim. — owns 6,774 out of 25,000 shares ordinary stock.
J. S. Murias y Co. — owns all of stock — 7,500 shares.
Blackwell’s Durham Tobacco Co. — in addition to a stock interest in the
*148Amsterdam Supply Co., has the stock interest, indicated, in the following defendant corporations:
F. P. Penn Tobacco Co: — owns 1,002 out of 1,503 shares.
Scottcn-Dillon Co. — owns $10,000 out of $500,000 of stock.
Wells-Whitehead Tobacco Co. — owns all of stock, 1,500 shares.
Conley Foil Company — owns all of the capital stock (3,000 shares) of the Johnson Tin Foil and Metal Co. .
P. Lorillard Company — has a stock interest in the American Snuff Company and the Amsterdam Supply Co.
R. J. Reynolds Tobacco Co.: — in addition to a stock interest in the Amsterdam Supply Company and the MacAndrews & Forbes Company, owns two-thirds of the 5,000 shares of stock of the Liipfert Scales Co.
The British-American Tobacco Co. — in addition to a small interest in the Amsterdam Supply Company, has the following stock interest in certain defendants:
David Dunlop — plug—owns 3,000 of 4,500 shares.
W. S. Mathews & Sons — smoking—owns 3,637 out of 5,000 shares of stock.
T. C. Williams Company — plug—owns all of stock, 4,000 shares.
The output of the American Tobacco Company for 1891 was—
Number.' Pounds.
Cigarettes.........................2,788,778,000 ......
Cheroots and little cigars.....:...... 40,009,000 ......
Smoking................................ 13,813,355
Fine cut............ 560,633
Snuff.............................. ' ...... 383,162
Plug................ - ...... , 4,442,774
Total output for the United States, 1891—
Cigarettes.................•........3,137,318,596 ......
Smoking.............. 76,708,300
Fine cut........................... ’ ...... 16,968,870
Plug and twist..................... ...... . 166,177,915
Snuff..........,.................. ...... . 10,674,241
P. J. Sorg Co.', having factory at Middletown, Oh(o, who received preferred stock $4,350,000, '■ common stock $4,525,000, and cash $224,375. ’
John-Finzer and Brothers, having factory at Louisville, Kentucky, who received preferred stock $2,250,000, common stock $3,050,000, and cash $550,000.
Daniel Scotten & Có., having factory at Detroit, Michigan, who received preferred stock $1,911,100, and common stock $3,01-2,500.
P. H. Mayo & Bros., having factory at Richmond, .Va., who received preferred stock $1,250,000, common stock $1,925,000, and cash $66,125. ■ -
John Wright Co., having factory at Richmond, Va., who received preferred stock $495,000, common stock $495,000, and cash $4,116.67.
Monopol Tobacco Works (New York, N. Y.) — Capital $40,000— cigarettes and smoking tobacco. In 1899 the American Tobacco Co. acquired all the shares for $250,000, and it is now a selling agency.
Luhrman & Wilbern Tobacco Company (Middletown, Ohio)— Capital $900;000 — scrap tobacco. This business was formerly carried on by a partnership.
Mengel Box Company (Louisville, Ky.) — Capital $2,000,000— boxes for packing tobacco. This company has acquired the stock ($150,000) of Columbia Bdx Company and of Tyler Box Company ($25,000), both at St. Louis.
The Porto Rican-American. Tobacco Company (Porto Rico) — Capital- $1,799,600. In 1899 the America^ Company caused the organization of the Porto Rican-American Tobacco Company, which took over the partnership business of Rucabado y Pórtela — manufacturer of cigars and cigarettes — with covenants not to compete. The American Tobacco Company and American Cigar Company each hold $585,300 of the stock; the balance is in the hands of individuals.
Kentucky Tobacco Product Company (Louisville, Ky.)- — Capital $1,000,000. In 1899 the Continental Company acquired control of the Louisville Spirit-Cured Tobacco Co.,’engaged in .curing'and treating tobacco and utilizing the .stems for fertilizers. By agreement, the Kentucky Tobacco Product Company was organized in New Jersey, with $1,000,000 capital, $450,000 issued to the old stockholders, and $550,000 to Continental Company as consideration for' agreement to supply stems.
Golden Belt Manufacturing Company (North Carolina) — Capital, $700,000 — cotton bags and containers. In 1899 the American Tobacco Company acquired the business' of this corporation, which was formed to take over a going business.
The Conley Foil Company (New York) — Tinfoil Combination— Capital, $825,000. In December, 1899, The American Tobacco Company secured control of the business of John Conley & Son (Partnership),New York, N. Y., manufacturers of tinfoil, an essential for pack*165ing tobacco products. By agreement the Conley Foil Company was incorporated in New Jersey “for’ trading .and manufacturing,” etc., with $250,000 capital (afterwards $375,000 and $825,000) — which took over the firm’s business and assets, etc., and The American Tobacco Company became owner of the majority shares. The Conley Foil Company has acquired all the stock of the Johnson Tinfoil & Metal Company — a defendant — of St. Louis, a leading competitor, and they supply under fixed contracts, the tinfoil used by defendants.
R. J. Reynolds Tobacco Company (Winston-Salem, North Carolina). In 1899 the Continental Tobacco Company acquired control of the R. J. Reynolds Tobacco Company, one of the largest manufacturers of plug — output in 1898, 6,000,000 pounds. By agreement, a new corporation (with same name) was organized in New Jersey and capitalized at $5,000,000 (afterwards $7,525,000), which took over the business and assets of the old one. The Continental Company immediately acquired'the majority shares and The American Company now holds $5,000,000 of stock. The separate organization has been preserved.
There was acquired in the name of the new Reynolds Company, with covenants against competition, the following plants:
In 1900, T. L. Vaughn & Company, partnership, of Winston, N. C.; consideration, $90,506; Brown Brothers Company; a North Carolina corporation, Winston, N. C.; consideration, $67,615\; and P. H. Hanes & Company and B. F. Hanes & Company, Winstoii, N. C., partnership; consideration, $67.1,950.
In 1905, Rucker & Witten Tobacco Company, Martinsville, Va.; consideration, $512,898. i
In 1906, D. H. Spencer & Company, Martinsville, Va.; consideration, $314,255.
(All of the foregoing plants were closed as soon as purchased.)
A majority of the $400,000 capital stock in the Liipfert-Scales Company, of Winston, N. C., a corporation largely engaged in the manufacture of plug tobacco and interstate and foreign commerce in leaf tobacco and its products, was acquired by the Reynolds Company. The separate organization of the Liipfert-Scales Company is preserved and the business carried on under its corporate name.
The R. J. Reynolds Tobacco Company also holds $98,300 of stock of *166the'Mac Andrews & Forbes Company and $9,600 of. the Amsterdam Supply Company.
Blackwell’s Durham Tobacco Company (Durham,N. C.) — Capital $1,000,000. In 1899 The American Tobacco Company .procured for $4,000,000 all the stock of Blackwell’s Durham Tobacco Company at Durham, N. C., manufacturer and distributer of tobacco products. Thereupon the Blackwell’s Durham Tobacco Company, of New-Jersey, capital, $1,000,000, all owned by the American, was organized and took over the assets of the old company, then under receivership. Its separate organization has been preserved.
The Durham Company has acquired control of the following competitors — Reynold’s Tobacco Company; F. R. Penn Tobacco Company; and W ells-^Whitehead Tobacco Company.
The following companies came also under the control of the American Tobacco Company through acquired stock ownership.
S. Anargyros — capital $650,000 — Turkish cigarettes. In 1890 The American Tobacco Company procured the organization of corporation of S. Anargyros, which took over that individual's going business and has since controlled it. Through this company the business in Turkish cigarettes is largely conducted.
The John Bollman Company (San Francisco) — Capital $200,000— cigarettes. In 1900 The American Tobacco Company procured organization of The John Bollman Company, which took over the business of the former concern in exchange for stock. Its.separate organization has been preserved.
To buy, manufacture, sell and otherwise deal in tobacco and the products of tobacco in any. and all forms; ... to guarantee dividends on any shares of the capital stock of any corporation in which said merged corporation has an interest as stockholder; . . . *174to carry on any business operations deemed by such merged corporation to be necessary or advisable in connection with any of the objects of its incorporation or in furtherance of any thereof, or tending to increase the value of its property or stock; ... to conduct business in all other States, territories, possessions and dependencies of the United States of America, and in all foreign countries; ... to purchase or otherwise acquire and hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of the shares of the capital stock or of any bonds, securities, or other evidences of indebtedness created by any other corporation or corporations of this or any other State or government, and to issue its own obligations in payment or exchange therefor. . . .