United States v. Swift & Co.

Mr. Justice Butler,

dissenting.

The facts on which the District Supreme Court allowed modification of parts of the 1920 consent injunction are set forth in its findings prepared in accordance with Equity Rule No. 70%. They are discussed and amplified in a painstaking opinion contained in the record. I think they are sustained by the evidence and are sufficient to support the decree. .

Conditions affecting competition in the lines of business carried on by defendants have changed since 1920. Indeed, the Government, after the introduction of evidence by appellees, formally stipulated that they “are in active competition with each other etc.1 The facts nega*121tive any suggestion that danger of monopolistic control now exists. Each of the principal packers has suffered discouraging operating losses. One of them, retiring from business, sold its plants to another. The purchaser, in order to avoid failure, was compelled to refinance and has not earned reasonable profits in any year. Another, being embarrassed, passed into the hands of a receiver, was subsequently adjudged bankrupt and later reorganized. Only two have continued able to sustain themselves. It is shown without dispute that defendants’ earnings, whether considered in relation to sales or to the worth of property invested, are low and substantially less than those of others carrying on the same lines of business.2

Since 1920 the manufacture and distribution of food have grown greatly and to a large extent have come to *122be carried on by integrated concerns in strong hands, which have taken over and are handling many products from the sources of production to consumers. More and more, meat — formerly distributed through shops selling little if anything else — is sold in stores carrying groceries and other articles of food. The diversification of the business of defendants permitted by the modification of the injunction is in harmony with present legitimate tendencies in the business of producing and selling meat, groceries and other articles of food. In all branches of such activities there is strong and active competition. The use by defendants of their employees and facilities for the sale and distribution of groceries as well as meat would not give them any undue advantage over their competitors. Under present conditions the relief granted below would not enable them to inflict the evils of monopoly upon any part of the food industry. The denial of that relief makes against competition intended to be preserved by the Sherman Act. Defendants should be permitted more efficiently to use their help and equipment to lessen their operating expenses. That makes for lower prices and so is in the public interest.

The wholesale grocers, represented here by objecting interveners, are not entitled to the court’s protection against the competition of non-members or of defendants carrying on separately and competing actively. They may not avoid the burden of sustaining themselves in a free and open market by protestation of fear that, if allowed to engage in the grocery business at all, defendants will unfairly compete in violation of the federal antitrust laws. If and whenever shown necessary for the protection of the commerce safeguarded by the original decree, the Government may have the modified provisions restored or new ones added.

There is nothing in the original complaint that makes for reversal here. The Government’s allegations were denied by answer. The decree was entered without evi*123dence or findings pursuant to a written stipulation between the Government and the defendants expressly providing that “ this stipulation shall not constitute or be considered as an admission, and the rendition or entry of the decree, or the decree itself, shall not constitute or be considered as an adjudication that the defendants, or any of them, have in fact violated any law of the United States.” And that provision was in exact words incorporated in and made a part of the decree. Thus the Government consented to, and the court adopted, this provision quite as much as the defendants consented to the other parts of the decree.

The fact that defendants thereafter applied to have the decree vacated upon grounds directed only to the power of the court to enter it ought not to be regarded as militating against them or their good faith — particularly when it is recalled that this court, when reviewing that proceeding, deemed the questions presented of sufficient importance to call for their argument a second time. 276 U. S. 311.

I am of opinion, that the facts found, taken with those conceded or established by uncontradicted evidence, justly entitle appellees to the measure of relief given below, and that the modifying decree should be affirmed.

I am authorized to say that Mr. Justice Van Devanter concurs in this opinion.

Census figures in respect of slaughtering and meat packing establishments in 1921 and 1927 are as follows:

Value of production per year: 1921 1927

$5,000 to $20,000............. 142 64

$20,000 to $100,000............ 304 267

$100,000 to $500,000........... 360 429

$500,000 to $1,000,000......... 112 163

$1,000,000 and over........... 266 327

Total....................... 1,184 1,250

The relations between each of the defendant packers’ production of meat and lard and total production of these articles in the United States during the years 1920 and 1929 are as follows:

*1211920 1929

Swift........................... 13.2% 15.2%

Armour (including Morris)15.8% 14.1%

Wilson......................... 5.2% 4.3%

Cudahy........................ 4.0% 4.7%

The following table groups the defendants’ earnings and compares them with the combined earnings of 15 competitors from 1920 to 1929:

Year Percentage of defend-earnings on sales Percentage of competitors’ earnings on sales Percentage of defendants’ earnings on net worth Percentage of competitors’ earnings on net worth

1920. 0.18 0.76 0.88 2.48

1921. a 3.05 a .17 a 10.27 a 5.80

1922. .10 2.72 .35 10.87

1923. 1.58 3.40 5.65 12.00

1924. 1.77 3.39 6.46 13.28

1925. 1.44 2.03 5.82 9.11

1926. 1.35 2.65 5.03 12.24

1927. .63 2.07 2.49 9.83

1928. 1.24 3.17 5.13 14.10

1929. 1.06 2.68 4.55 14.02

Loss.