234 U. S.

Argument for the United States.

394; United States v. Reading Co., 226 U. S. 324; United States v. Un. Pac. R. R. Co., 226 U. S. 61, 84; Wabash R. R. Co. v. Hannahan, 121 Fed. Rep. 563, 569; Walker v. Cronin, 107 Massachusetts, 555, 564.

Mr. Assistant to the Attorney General Todd for the United States:

The evidence establishes an agreement or combination between the defendant retailers to prevent wholesalers from selling directly to consumers by refusing to buy from (boycotting) them if they do. This is shown by the declared purpose of the defendant associations as disclosed by their constitutions and by-laws; the compilation and circulation of the so-called "official reports" or blacklists; the actual course of conduct of defendants in concertedly withdrawing their patronage from listed wholesalers; admissions of members of defendant associations, and other testimony showing general recognition of and obedience to a tacit or moral obligation upon members so to withdraw their patronage. The inference of an agreement to boycott is confirmed by the decisions of other courts in conspiracy cases. Commonwealth v. McLean, 2 Pars. (Pa.) 367; 3 Greenleaf on Ev., § 93; Patnode v. Westenhaver, 114 Wisconsin, 460; Regina v. Murphy, 8 C. & P. 397; Reilley v. United States, 106 Fed. Rep. 896; State v. Adams Lumber Co., 81 Nebraska, 392; United States v. Sacia, 2 Fed. Rep. 754; Webb v. Drake, 26 So. Rep. (La.) 791; 2 Wharton, Criminal Law, § 1398.

An agreement or combination by retailers to refuse to buy from (boycott) wholesalers who sell directly to consumers interferes with the free and normal flow of trade and therefore violates the Anti-trust Act. Bailey v. Master Plumbers' Ass'n, 103 Tennessee, 99; Beck v. Railway Teamsters' Union, 42 L. R. A. 407; Bohn Mfg. Co. v. Hollis, 54 Minnesota, 223; Boutwell v. Marr, 71 Vermont, 1; Brown v. Jacobs Phar. Co., 115 Georgia, 429; Casey v.

Cincinnati Typographical Union, 45 Fed. Rep. 135; Doremus v. Hennesy, 176 Illinois, 608; Ellis v. Inman, 131 Fed. Rep. 183; Gompers v. Bucks Stove Co., 221 U. S. 418; Same v. Same, 33 App. D. C. 83; Grenada Lumber Co. v. Mississippi, 217 U. S. 433; Hawarden v. Youghiogheny Coal Co., 111 Wisconsin, 545; Hopkins v. Oxley Stave Co., 83 Fed. Rep. 912; Jackson v. Stanfield, 137 Indiana, 592; Klingel's Pharmacy v. Sharp, 104 Maryland, 218; Loewe v. Lawlor, 208 U. S. 274; Lucke v. Clothing Cutters Ass'n, 77 Maryland, 396; Macauley Bros. v. Tierney, 19 R. I. 255; Montgomery Ward & Co. v. So. Dak. Merchants' Ass'n, 150 Fed. Rep. 413; Montague v. Lowry, 193 U. S. 38; Olive v. Van Patten, 7 Tex. Civ. App. 630; Purington v. Hinchliff, 219 Illinois, 159; Retail Dealers' Ass'n v. State, 48 So. Rep. (Miss.) 1021; State v. Adams Lumber Co., 81 Nebraska, 393; Steers v. United States, 192 Fed. Rep. 1; Thomas v. C., N. O. & T. P. R. Co., 62 Fed. Rep. 803; Webb v. Drake, 26 So. Rep. (La.) 791.

Viewing the agreement or combination between the defendants merely as one to circulate amongst themselves lists of wholesalers who sell directly to consumers, it unreasonably restricts competition between wholesalers and retailers in selling to consumers and therefore violates the Anti-trust Act. Am. Tobacco Co. v. United States, 221 U.S. 106; Nash v. United States, 229 U. S. 373; Quinn v. Leatham (1901), A. C. 495; Standard Oil Co. Case, 221 U. S. 1.

The plea that this combination was a reasonable and necessary measure to defend the position of retailers in the trade is irrelevant in law and unfounded in fact. Ches. & Ohio Fuel Co. v. United States, 115 Fed. Rep. 610; Grenada Lumber Co. v. Mississippi, 217 U. S. 433; Loewe v. Lawlor, 187 Fed. Rep. 522.

MR. JUSTICE DAY delivered the opinion of the court.

These are appeals from a decree of the District Court of the United States for the Southern District of New York

in an action brought by the United States under the Sherman Anti-Trust Act (July 2, 1890, c. 647, 26 Stat. 209), having for its object an injunction against certain alleged combinations of retail lumber dealers, which, it was averred, had entered into a conspiracy to prevent wholesale dealers from selling directly to consumers of lumber. The defendants are various lumber associations composed largely of retail lumber dealers in New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Rhode Island, Maryland and the District of Columbia, and the officers and directors of the associations. The record is very voluminous, but the facts essential to a consideration of the decree of the District Court are in comparatively narrow compass. While the record also concerns practices which are said to have been abandoned, the decree entered, declaring the defendants named to be in a combination or conspiracy to restrict and restrain competition, depends solely upon the method adopted and being used by the defendants in the distribution of the information contained in a certain document known as the "Official Report," the form of which, set forth in the decree, is as follows:

"OFFICIAL REPORT.

"(Name of the Particular Association Circulating it.) "STATEMENT TO MEMBERS (WITH THE DATE). "You are reminded that it is because you are members of our Association and have an interest in common with your fellow members in the information contained in this statement, that they communicate it to you; and that they communicate it to you in strictest confidence and with the understanding that you are to receive it and treat it in the same way.

"The following are reported as having solicited, quoted or as having sold direct to the consumers:

(Here follows a list of the names and addresses of various wholesale dealers.)

"Members upon learning of any instance of persons soliciting, quoting, or selling direct to consumers, should at once report same, and in so doing should, if possible, supply the following information:

"The number and initials of car.

"The name of consumer to whom the car is consigned. "The initials or name of shipper.

"The date of arrival of car.

"The place of delivery.

"The point of origin";

and the defendants were enjoined from combining, conspiring or agreeing together to distribute and from distributing to members of the associations named or any other person or persons any information showing soliciting, quotations, or sales and shipments of lumber and lumber products from manufacturers and wholesalers to consumers of or dealers in lumber, and from the preparation and distribution of the lists above described as the "Official Report" or the use of a similar device.

The record discloses that the defendant associations are constituted largely of retail lumber dealers, each of whom has the natural desire to control his local trade, which the retailers contend has been unduly interfered with by the wholesalers in selling to consumers within the local territory in such wise as to conflict with what they regard as a strictly local trade, and it appears that the defendant associations have for their object, among other things, the adoption of ways and means to protect such trade and to prevent the wholesale dealers from intruding therein. The particular thing which this case concerns in the retailers' efforts to promote the end in view is the attempt in the manner shown, by the circulation of the reports in question, to keep the wholesalers from selling directly to the local trade. The trade of the wholesalers involved covers a number of states, and there is no question but that the supplying of lumber to the large num

bers of retailers in these associations in different States is interstate trade and that if the practices are illegal within the Sherman Act they may be reached by this proceeding. Swift & Co. v. United States, 196 U. S. 375; Loewe v. Lawlor, 208 U. S. 274, 300.

The record discloses a systematic circulation among the members of the defendant associations of the official report above quoted. The method of operation as stated by the learned counsel for the appellants is thus summarized in his brief:

"The names on this list are obtained and placed thereon as the result of complaints made by individual retailers. When an individual member of a retail association learns of a sale by a wholesaler to one of the customers of the retailer he may complain in writing to the secretary of his association, whose duty it is thereupon to ascertain the facts by correspondence with the wholesaler in question and such other means as may seem proper. Should the report or complaint be without proper foundation or should the secretary become satisfied that the matter is a trifling one or the result of inadvertence, the incident usually terminates at this point; but should the complaint appear to be serious and well founded the case is submitted to the board of directors of the retail association at its next meeting and should the board be satisfied that the wholesaler is generally making a practice of selling to consumers or customers of the retail trade, the secretary is directed to report the name of such wholesaler for the official list. Thereupon the secretary sends the name to Mr. Crary of New York who adds it upon the next report to the names of those already thereupon. Each report contains the names of all wholesalers who have been reported from the very beginning as selling to consumers and whose names have not been removed for cause. The reports or lists after being printed in New York are distributed amongst the secretaries of the defendant associa