Harold Hitz Burton

“ These facts demonstrate also the vigor and nature of the intent of the petitioners to exclude competitors in order to maintain that monopoly if need or occasion shall offer itself to attempt such an exclusion. To support the verdicts it was not necessary to show power and intent to exclude all competitors, or to show a conspiracy to exclude all competitors. ”

“ In the present cases, the court below has found that there was more than sufficient evidence to establish a conspiracy in restraint of trade by price fixing and other means, and also a conspiracy to monopolize trade with the power and intent to exclude actual and potential competitors from at least a part of the tobacco industry. ”

“ A correct interpretation of the statute and of the authorities makes it the crime of monopolizing, under § 2 of the Sherman Act, for parties, as in these cases, to combine or conspire to acquire or maintain the power to exclude competitors from any part of the trade or commerce among the several states or with foreign nations, provided they also have such a power that they are able, as a group, to exclude actual or potential competition from the field and provided that they have the intent and purpose to exercise that power. ”

“ The authorities support the view that the material consideration in determining whether a monopoly exists is not that prices are raised and that competition actually is excluded but that power exists to raise prices or to exclude competition when it is desired to do so. ”

“ In each of the years 1937, 1938 and 1939, American, Liggett and Reynolds expended a total of over $40,000,000 a year for advertising. Such advertising is not here criticized as a business expense. Such advertising may benefit indirectly the entire industry, including the competitors of the advertisers. Such tremendous advertising, however, is also a widely published warning that these companies possess and know how to use a powerful offensive and defensive weapon against new competition. ”

“ The tobacco takes its name of flue-cured from the 'curing' process to which it is subjected and which consists of hanging the tobacco leaves in barns heated by a system of flues. Between 50% and 60% of the total fluecured product is for export to England. The petitioners purchased a combined total of between 50% and 80% of the domestic flue-cured tobacco. The burley tobacco is produced largely in the burley belt in Kentucky and Tennessee. It is cured without heating, by exposing the leaves to the air in barns in which they are hung. ”

“ The petitioners argue that § 2 of the Sherman Act should be interpreted to require proof of actual exclusion of competitors in order to show 'monopolization,' and they claim that only thus can a 'conspiracy to monopolize' trade be sufficiently differentiated from a 'conspiracy in restraint of' trade as to avoid subjecting the parties accused under those counts to double jeopardy. ”

“ The present cases are not comparable to cases where the parties, for example, merely have made a new discovery or an original entry into a new field and unexpectedly or unavoidably have found themselves enjoying a monopoly coupled with power and intent to maintain it. ”

“ We find the following statements from the opinion of the court in that case to be especially appropriate here and we welcome this opportunity to endorse them:
'Many people believe that possession of unchallenged economic power deadens initiative, discourages thrift and depresses energy; that immunity from competition is a narcotic, and rivalry is a stimulant, to industrial progress; that the spur of constant stress is necessary to counteract an inevitable disposition to let well enough alone. ”

“ In this way the new tobacco markets and their locations were determined by the unanimous consent of the petitioners and, in arriving at their determination, the petitioners consulted with each other as to whether or not a community deserved a market. ”

“ The greater part of the Maryland tobacco was purchased by petitioners. The crops in the more southerly belts mature first and the burley crops are not ready for market until late fall. When the tobacco is ready for market the farmers strip, sort and grade the leaves according to their judgment as to quality, tie them into bundles called 'hands' (except in Georgia where the tobacco remains loose) , and truck them to tobacco auction markets. ”

“ The fact, however, that the purchases of leaf tobacco and the sales of so many products of the tobacco industry have remained largely within the same general group of business orgn izations for over a generation, inevitably has contributed to the ease with which control over competition within the industry and the mobilization of power to resist new competition can be exercised. A friendly relationship within such a long established industry is, in itself, not only natural but commendable and beneficial, as long as it does not breed illegal activities. ”

“ At a time when the manufacturers of lower priced cigarettes were beginning to manufacture them in quantity, the petitioners commenced to make large purchases of the cheaper tobacco leaves used for the manufacture of such lower priced cigarettes. ”

“ It appeared that petitioners refused to purchase tobacco on these markets unless the other petitioners were also represented thereon. There were attempts made by others to open new tobacco markets but none of the petitioners would participate in them unless the other petitioners were present. Consequently, such markets were failures due to the absence of buyers. It appeared that the tobacco farmers did not want to sell their tobacco on a market in which the only purchasers were speculators or dealers. ”

“ Reynolds referred to a differential of more than 3 cents as 'discriminatory' on the ground that the dealer then would make a higher gross profit on the higher priced cigarettes than on the 10 cent brands. After the list price reductions were made ad at the height of the price war the petitioners commenced the distribution of posters, advertising their brands at 10 cents a package and made attempts to have dealers meet these prices. ”

“ The three years at issue in the charges made, were those immediately preceding the filing of the informations on July 24, 1940, [6] but for conveniencet he statistics relied upon generally have been those for the calendar years 1937, 1938 and 1939. ”

“ In doing so, however, I express no judgment concerning other questions determined on the appeal to the Circuit Court of Appeals, 6 Cir., 147 F.2d 93, and presented in the application for certiorari or the later petition for rehearing and enlargement of the scope of review here, including the question whether upon the particular a cts the law has been applied in such a manner as to bring about, in substantial effect, multiple punishment for the same offense. ”