Opinion — United States v. Winslow

UNITED STATES . WINSLOW.

ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR

THE DISTRICT OF MASSACHUSETTS.

No. 620. Argued January 10, 1913.—Decided February 3, 1913.

On appeals ander the Criminal Appeals Act of 1907 this court has no

jurisdiction to review the interpretation of the indictment by the

lower court, United States v. Patten, 226 U. 8. 526, and if that court

has construed the count as alleging a combination of a particular

date to be in violation of the Sherman Law, without regard to subse-

quent acts, this court cannot pass upon the validity of those acta.

A combination for greater efficiency does not necessarily violate the

Sherman Anti-trust Act.

Where each of several groups are carrying on a legal business of making

machines which do not compete with each other, although

the machines of all the groups are used by manufacturers of the

same article, such as shoes, a combination of the several groups does

pot violate the Sherman Anti-trust Act.

Exclusion of competitors from making the patented article is of the very

essence of the right conferred by the patent.

Where the share in interstate commerce does not appear in the record,

and the machines in question are not alleged to be types of all the

machines used in manufacturing the article for which they are made,

the Government cannot claim that a specified proportion of the busi-

ness was put into a single hand.

The disintegration aimed st by the Sherman Anti-trust Act does not

extend to reducing all manufacture to isolated units of the lowest

degree.

The Criminal Appeals Act of March 2, 1907, ¢. 2564, 34 Stat. 1246, iss

special provision and, as it is not mentioned in the repealing section

of the Judicial Code of 1911 and is not superseded by any other

regulation of the matter, it was not repealed by the Judicial Code.

United States, Petitioner, 226 U. g. 420.

The District Court rightly held that the counts under review of the .

dietment against various persons for combining their businesses d

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UNITED STATES o. WINSLOW. 203

27 U.S. Argument for the United States.

manufacturing patented machines for making different parts of shoes,

and not competing with each other, did not constitute an offense un-

der the Sherman Anti-trust Act.

195 Fed. Rep. 578, affirmed.

Tue facts, which involve the construction of the Sher-

man Anti-trust Act, and determining whether the com-

bination charged in an indictment thereunder of various

manufacturers of patented shoe machinery constituted a

violation thereof, are stated in the opinion.

The Solicitor General for the United States:

This case presents the question whether it. is legal to

gather together into one corporation about 80 per cent. of

all the interstate trade in some particular line of activity

when it is done gradually by legitimate methods and

without any unfair competition such as characterized the

Tobacco and Standard Oil cases. If that is legal, the sooner

the business world understands it the better.

The indictment alleged that three separate groups of

individuals (each controlling a different group of machines

essential to the manufacture of shoes), combined together

hereby their separate businesses were combined into onc

under the joint management of these individuals; that each

of the separate groups controls about 70 or 80 per cent of

the interstate trade in the particular kind of machines

manufactured by it; and that by the combination there

were placed into one hand from 70 to 80 per cent of all the

business in those kinds of shoe machinery manufactured

by the defendanta.

The constitutionality and sufficiency of the criminal

provisions of the Sherman Anti-trust Act are settled.

United States v. Kissel, 218 U. S. 601; Northern Securities

Co. v. United States, 193 U. 8. 197, 401; Standard Oil Co.

„ United States, 221 U. S. 1, 69; United States v. Swift,

188 Fed. Rep. 92.

—

204 OCTOBER TERM, 1912.

Argument for the United States. 227 U.S.

Individuals are subject to indictment for acts done

under the guise of a corporation where the individuals

personally so dominate and control the corporation as to

immediately direct its action. United States v. Swift, 188

Fed. Rep. 92, 98; United States v. McAndrews & Forbes

Co., 149 Fed. Rep. 823; Crall v. Commonwealth, 103 Vir-

ginia, 855, 859, 860; People v. Clark, 8 N. V. Crim. Rep. 179,

194, 195, 212; People v. White Lead Works, 82 Michigan,

471, 479; People v. Duke, 44 N. v. Supp. 336, 337-339 ; State

v. Great Works &c. Co., 20 Maine, 41; United States v. Dur-

land, 65 Fed. Rep. 408, 415; S. C., 161 U. S. 306; Ballet v.

United States, 129 Fed. Rep. 689; Fitzsimmons v. United

States, 156 Fed. Rep. 477, 481; Foster v. United States, 178

Fed. Rep. 165, 173, 176-178; La Societe Anonyme &c. v.

Panhard Motor Co. (1901), 2 Ch. 513, 516-517.

Prior to February 7, 1899, competition with reference

to the different kinds of shoe machinery was 80 distributed

between the different groups of defendants and the In-

dependents that a shoe manufacturer had 24 different

choices for obtaining shoe machinery. ‘

By the organization of the United Shoe Machinery

Company and the coalescence into one of the three groups

of businesses formerly carried on separately by the de-

fendants, the variety of choice open to a shoe manufacturer

for obtaining the necessary shoe machinery was reduced

from 24 ways to 16 ways. .

The defendants then adopted what is known as the

“tying” clause lease, which provided that any shoe manu-

facturer using any one class of machines furnished by the

defendants should use for all his other machines only

those furnished by the defendants; and that if he used any

machine made by an Independent, the defendants would

forfeit his lease and remove his machines. This form of

lease immediately reduced from 16 to 2 the different ways

by which a manufacturer could equip his factory, so that

he had to get all his machinery from the defendants or

get it all from the Independents.

UNITED STATES v. WINSLOW. 205

27 U. 8. Argument for the United States.

The effect of the combination was to place from 70 to

lasting, welt-sewing, heeling and metallic fastening ma-

chines) into one hand. This combination into one group

of four non-competitive businesses (which, taken together,

constitute one complete business) curtailed the customer’s

liberty of action by compelling him to deal with one and

the same group as to all four classes of machinery, whereas

formerly he could deal with four separate groups. The

question presented, then, is whether the combination into

one group of 75 per cent. of the whole business of the

country in a particular line is in such restraint of trade as

to violate the Sherman law, it being conceded that the

combination was not attended by any methods of unfair

competition or illegitimate trade practices. Without at-

tempting to determine exactly at what percentage of trade

control a combination passes into the region of illegal

restraint, the Government insists that when a combina-

tion acquires between 70 and 80 per cent. of the total trade

in a particular business, the line between legal and illegal

combinations has been passed; and that this is so even

though the combination is made without resorting to any

wrongful methods to coerce anyone to come into the com-

bination. Swift v. United States, 196 U. S. 375; Standard

Sanitary Mfg. Co. v. United States, 226 U. S. 20; Standard

Oil Co. v. United States, 221 U. S. 1; United States v.

American Tobacco Co., 221 U. 8. 106; United States v.

Union Pacific R. R. Co., 226 U. S. 61; United States v.

The Reading Co., 226 U. S. 324.

The adoption by the United Shoe Machinery Com-

ny of the tying clause lease whereby a customer was

compelled to take all his machines from the defendants or

all from the Independents was 4 direct restraint upon

competition and trade (1) of the defendants by limiting

their trade to those who would agree to use only the de-

FFF

206 OCTOBER TERM, 1912.

Argument for the United States. 227 U. 8.

fendants’ machines; (2) of the customers by depriving

them of the right to use some machines unless they would

also use others, (3) of the Independents by preventing

them from selling their machines to their former customers.

Montague v. Lowry, 193 U. S. 38; United States v. St. Louis

Terminal, 224 U. S. 383; Standard Sanitary Mfg. Co. v.

United States, 226 U. S. 20; United States v. Union Pacific

R. R. Co., 226 U. S. 61; United States v. The Reading Co.,

226 U. 8. 324.

The patent laws do not authorize the tying' clause

leases.

The precise point decided in Henry v. Dick Co., 224

U. S. 1, was that a patentee might impose a restriction

that his machine should be used only in connection with .

certain supplies which in point of fact bore so direct a re-

lation to the invention that it could not be operated with-

out their use in physical connection with the patented

machine.

The doctrine of Henry v. Dick Co. should not be ex-

tended to permit a license restriction beyond the actual

use of supplies in connection with the necessary physical

operation of the patented machine. Standard Sanitary

Mfg. Co. v. United States, 226 U. S. 20.

But even if the doctrine of Henry v. Dick Co. is extended

to the extreme limit of permitting any kind of restriction

upon the use of a patented machine, yet when such re-

strictions are a part of one general scheme of combination

the patent laws no longer authorize such restrictions.

The rights given by the patent laws do not give universal

license against the positive prohibitions of the Sherman

law, which is a limitation on all rights that might otherwise

be pushed to evil consequences. Standard Sanitary Mfg.

Co. v. United States, 226 U. S. 20; United States v. The

Reading Co., 226 U. S. 324.

The Criminal Appeals Act, 34 Stat. 1246, was not re-

pealed by the adoption of the Judicial Code.

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UNITED STATES ». WINSLOW. 207

27 U. 8. Argument for Defendants in Error.

The defendant’s right of appeal to the Supreme

tourt was given in the fifth and sixth sections of the Cir-

wit Court of Appeals Act which, in the proposed revision

if the laws of the United States, was placed in Chapter

Ten on the Supreme Court,” in the title called ‘‘The

judiciary.” The right of the United States to appeal to the

Supreme Court was contained in the Criminal Appeals

Act, which, in the same proposed revision was placed in

Chapter Eighteen on “Procedure on Error and Appeal.”

Congress, in ing the Judicial Code, did not at-

tempt to cover the whole body of the revision submitted

to it, but only adopted the first 14 chapters of the title

“The Judiciary”; so that while it incorporated into the

Judicial Code Chapter Ten ‘on the Supreme Court

giving the defendant a right to appeal, it did not attempt

to cover any of the field embraced in the later chapters

of the revision. Therefore, those subjects, inter alia,

which were dealt with in proposed Chapter 18 were never

even considered by Congress and therefore remained con-

trolled by the former laws governing them—one of which

was the Criminal Appeals Act. (Cf. Committee Report

of 1907 of Commission to Codify and Revise the Laws

of the United States” and the Joint Committee of Con-

gress’ Revision of 1910. See Title XVI, The Judiciary,”

Chapters 10 and 18.)

Mr. Frederick P. Fish and Mr. Charles F. Choate, Jr.,

with whom Mr. Malcolm Donald and Mr. William A.

Sargent were on the brief, for defendants in error:

Only a single question is presented by the case.

The lease question is not before this court, as herein-

after shown.

The fact that the machines manufactured by the United

‘Shoe Machinery Company are protected by letters-patent |

was not considered by the District Court in its construc-

tion of the Sherman Act, and is not open in this court.

208 OCTOBER TERM, 1912.

Argument for Defendants in Error. 227 U. 8.

2

The facts alleged in the first and second counts are not} J

brought out or are erroneously stated by the United States. | 3

e

2

‘The second count is

with the first count, except as to the allegation in re-

gard to interstate commerce, and changing the charge of

combination of defendants’ own trade into one of con-

spiracy to restrain the trade of shoe manufacturers in t

shoe machinery.

On this writ of error, the question is whether the Dis-

trict Court erred in the

in sustaining the demurrers to counts one and two and

so far as that act is construed by the District Court in its

opinion relating to those two counts.

For construction of the Criminal Appeals Act as applied

to the question before this court, see United States v.

Bitty, 208 U. S. 398; United States v. Keitel, 211 U. S. 370;

United States v. Mason, 213 U. S. 115; United States v.

Mescall, 215 U. S. 26; United States v. Stevenson, 215 U. 8.

190; United States v. Kissel, 218 U. S. 601; United States

v. Barber, 219 U. S. 72; United States v. Miller, 223 U. 8.

599.

The District Court decided the two counts now before

this court were bad for duplicity in pleading, that is to

say, on a question of general law not involving the con-

struction of the Sherman Act, and that cannot be reviewed

here. United States v. Keitel, 211 U. S. 370; United States

v. Mason, 213 U. S. 115

26; United States v. Stevenson, 215 U. S. 190.

The District Court also held the two counts bad on a

second ground, namely, that the original organization of

the company was neither a combination in restraint of

trade nor à conspiracy in restraint of trade under the

Sherman Act. By such decision the District Court con-

strued the Sherman Act.

The Criminal Appeals Act of 1907, under which the

present writ of error was brought, was repealed by the

almost identical, word for word, ¥

construction of the Anti-trust Act | ,

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; United States v. Mescall, 215 U. 3.1

Ls

UNITED STATES v. WINSLOW. 5 20

7 U. 8. Argument for Defendants in Error.

idicial Code which became effective January 1, 1912,

nd therefore this court has no jurisdiction as the writ of }

ror was filed after that date. United States v. Stevenson, |

nd is not open in this court.

The District Court was not in error in its construction

f the Sherman Act in relation to counts one and two.

The organization of the company by said defendants

ogether, and the turning over by said groups of defendants

and the taking over by the company of the stocks and

wusiness of the three corporations, was not, and is not,

combination in restraint of defendants’ own trade nor

, conspiracy in restraint of trade of the shoe manufac-

urers in shoe machinery. United States v. American

Tobacco Co., 221 U. S. 106.

By the organization of the United Shoe Machinery

Company there was no restrietion of competition. The

three groups of defendants, prior to the organization of

the company, were not engaged in competition with each

other. Their businesses were absolutely different, and

each business related to a different commodity. Kokomo

Fence Machine Co. v. Kitselman, 189 U. S. 8; Addyston

Pipe Co. v. United States, 175 U. S. 211; Northern Sec. Co.

v. United States, 193 U. S. 197; Montague v. Lowry, 193

U. S. 38; Miles Medical Co. v. Park Co., 220 U. S. 373;

Shawnee Compress Co. v. Anderson, 209 U. S. 423; Con-

tinental Wall Paper Co. v. Voight, 212 U. S. 227; U. S.

Machinery Co. v. La Chapelle, 212 Massachusetts, 467;

Swift & Co. v. United States, 196 U. S. 375; United States v.

John Reardon Co., 191 Fed. Rep. 454; Standard Sanitary Co.

y. United States, 226 U.S. 20; United States v. Un. Pac. R. R.

Co., 226 U. S. 61; United States v. Terminal R. R. Ass’n, 224

U. S. 383; United States v. Reading Co., 226 U. S. 324.

vol. xXx VII 14

210 - OCTOBER TERM, 1912.

Argument for Defendants in Error. 227 U. 8.

By the organization of the company the defendants,

taken individually, or in groups, or together, did not agree

to restrain such trade as they had in different commod-

ities, or in any manner to restrain their own trade.

Addyston Pipe Co. v. United States, 175 U. S. 211; Mon-

tague v. Lowry, 193 U. S. 38; Shawnee Compress Co. v.

Anderson, 209 U. S. 423; Continental Wall Paper Co. v.

Voight, 212 U. S. 227; Ellis v. Inman, 131 Fed. Rep. 182

Standard Oil Co. v. United States, 221 U.S. 1; United States

v. American Tobacco Co., 221 U. S. 106; Blount Mfg. Co. v.

Yale Mfg. Co., 166 Fed. Rep. 555; United States v. Trans-

Missouri Ass’n, 166 U. 8. 290; Swift & Co. v. United

States, 196 U. S. 375; Miles Medical Co. v. Park Co., 220

U. S. 373; United States v. Standard Sanitary Co., 191

Fed. Rep. 172; Bigelow v. Calumet & Hecla Co., 167 Fed.

Rep. 721.

The combination created by the organization of the

United Shoe Machinery Company was purely an economic

arrangement, not in violation of any rule in restraint of

trade at common law, or which has been announced by

the Supreme Court. Joint Traffic Case, 171 U. S. 505.

The combination of businesses, each dealing with a

different commodity, into one corporation, has never been

held a restraint of trade either at common law or under

the Sherman Act. United States v. American Tobacco Co.,

221 U. S. 106; United States v. Reading Co., 226 U. S. 324;

Union Pacific Coal Co. v. United States, 173 Fed. Rep.

737; United States v. Standard Oil Co., 173 Fed. Rep. 177.

That the District Court was right in the only construc-

tion of the Sherman Act now before this court, to wit, in

holding that the organization of the United Shoe Ma-

chinery Company was not within the purview of the

Sherman Act, is further apparent from the fact that such

organization of the United Shoe Machinery Company

had no direct or immediate effect upon interstate com

merce. If it had any effect at all upon interstate com-

D

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UNITED STATES v. WINSLOW. 211

227 U. 8. Argument for Defendants in Error.

merce, such effect was accidental, secondary, remote,

and not even probable. Bigelow v. Calumet & Hecla Co.,

167 Fed. Rep. 721; Anderson v. United States, 171 U. 8.

604; Field v. Barber Asphalt Paving Co., 194 U. S. 618;

Standard Oil Co. v. United States, 221 U.S. 1.

Whether these lease provisions are or are not in restraint

of trade is not before this court for several reasons: these

defendants are not indicted for making these lease provi-

sions; the language of the indictment in regard to these

leases shows it; the act of the defendants in relation to

these lease provisions is only an overt act, and only one of

three or four overt acts named in the same paragraph of

indictment; the combination and conspiracy are each ab-

solutely complete without this overt act; the leases are

not a part of the combination or conspiracy. No original

intent to change leases is shown or any agreement to do 80;

the leases are not part of the original combination or con-

spiracy because between different parties; the question is

one of duplicity on the theory of the United States; the

lease provisions in these two counts were not construed or

passed upon by the District Court; if the lease provisions

had been involved here, the District Court would have

considered the patent law.

The entire argument of the United States in regard to

the business of these defendants and of the corporation is

| based on the erroneous view that the machines of the de-

fendants were all the machines used in shoe making, and

as a corollary to the above, the United States says that

the defendants control between seventy and eighty per

cent. of the entire shoe machinery business in the United

States.

On this record the particular form of the organization of

the company, and the taking over of the capital stocks

and business of the three original corporations is im-

‘| material.

Indictment 113 was dismissed by the District Court for

*

212 OCTOBER TERM, 1912.

Argument for Defendants in Error. 227 U. 8.

duplicity and it should be explained why the second count

of indictment 114 was not brought to this court by the

United States.

The defendants are not indicted for dominating the sup-

ply of shoe machinery. Reading R. R. Case, 226 U. S. 324.

The argument of the United States fails absolutely, be-

cause the defendants are not indicted for dominating the

supply of shoe machinery,; so also as to the alleged com-

petition before the date of the organization of the company

and the alleged competition thereafter.

The argument of the United States, as to the effect of

the organization of the United Shoe Machinery Company,

is absolutely fallacious.

The particular patented machines of these defendants

are not indispensable to the manufacturer of shoes by the

admission of the United States in its brief; in fact the

dissatisfied shoe manufacturer mentioned by the United

States is better off after the organization of this company

than before.

The organization of the company did not compel the

customer to deal with the same group as to the four classes

of machinery. All of the cases cited by the United States

in this section of its brief relate to combinations of com-

petitors dealing in the same commodity.

It is to be remembered that defendants are not indicted

for monopolizing; that defendants’ machines are patented

and they are entitled to one hundred per cent. of the trade

therein.

The merger of the three companies was lawful and

proper.

The leases form no part of the merger and are not per-

tinent to this discussion.

No express agreement to restrain trade is alleged, and,

therefore, the Government is compelled to contend that

the natural, necessary and inevitable effect of the merger

was to restrain trade.

*

UNITED STATES v. WINSLOW. 213

27 U. 8. Argument for Defendants in Error.

In every prior case, except Loewe v. Lawlor, 208 U. 8.

274, the combination complained of has been a combina-

tion of competitors or & combination formed to eliminate

competition.

As to the character of conduct condemned by the Sher-

man Act see Standard Oil Co. v. United States, 221 U. S. 1;

United States v. American Tobacco Co., 221 U. S. 106;

United States v. Joint Traffic Asso., 171 U. S. 505; Ander-

son v. United States, 171 U. 8. 604.

The merger did not produce, was not designed to pro-

duce, and its natural or necessary effect was not to produce

any restraint of trade, for defendants were not personally

restrained; defendants’ business was not restrained; shoe

manufacturers were not restrained; other shoe machinery

manufacturers were not restrained.

The Government’s contention that the shoe manu-

facturer’s liberty of action was restrained because the

number of concerns with which he could. disagree was re-

duced, is unsound.

No greater power to restrain trade resulted from the

merger, and if it could be held that any such power did

result, it would not naturally or inevitably restrain trade.

No such power did result. If it did, the probability that

it would produce a restraint of trade is too remote. Swift

& Co. v. United States, 196 U. S. 375; Commonwealth v.

Peaslee, 177 Massachusetts, 267.

If any restraint of trade could result from the merger

it would be purely incidental to the accomplishment of a

lawful purpose. Bigelow v. Calumet & Hecla Co., 167

Fed. Rep. 721; Anderson v. United States, 171 U. S. 604;

Field v. Barber Asphalt Paving Co., 194 U. S. 618; Stand-

ard Oil Co. v. United States, 221 U. S. 1; United States v.

Joint Traffic Asso., 171 U. S. 505.

The concentration of manufacturing at Beverly pro-

duced no restraint of trade.

The leases made by the defendants were clearly lawful

214 OCTOBER TERM, 1912.

Opinion of the Court. 227 U. 8.

whether considered separately or in connection with the

merger.

The general rule is that all restrictions imposed by

patentees not in their very nature illegal are lawful.

Bement v. National Harrow Co., 186 U. S. 70.

Considerations of public policy not recognized in the

patent law are irrelevant; the right to grant restricted

licenses is given by the patent law. Henry v. Dick Co., 224

U. S. 1.

This right, like other rights under the patent law, should

be construed liberally. Ames v. Howard, 1 Sumner, 482;

Henry v. Dick Co., 224 ie 5

If general considerations of public policy can be consid-

ered as relevant, the right to impose such restrictions

should be favored.

The Sherman Act is not applicable to restrictions which

are reasonable when considered with due regard for the

patentee’s lawful monopoly. Bement v. National Harrow

Co., 186 U. S. 70; Henry v. Dick Co., 224 U. S. 1; Standard

Sanitary Co. v. United States, 226 U. S. 20.

The publie have no right to have an unrestrained trade

in or use of patented articles. United States v. American

Bell Tel. Co., 167 U. S. 224; Park v. Hartmann, 153 Fed.

Rep. 24; Rubber Tire Wheel Co. v. Milwaukee Rubber Works

Co., 154 Fed. Rep. 358; Cilley v. U. S. Machinery Co., 152

Fed. Rep. 726.

If trade is affected by reason of such conditions or re-

strictions imposed by patentees, such effect is incidental

to the exercise of lawful rights, and therefore is itself law-

ful. The patentee’s compensation need not be direct but

may come from the sale or use of some other article.

Button-Fastener Case, 77 Fed. Rep. 288; Henry v. Dick Co.,

224 U. 8. 1.

Mr. Justice Houmes delivered the opinion of the

court.

ä ——————ů —ͤNÄ——

_

UNITED STATES . WINSLOW. 215

227 U. S. Opinion of the Court.

This is a writ of error to determine whether two counts

in an indictment as construed by the District Court

charge offences under the Sherman Act of July 2, 1890,

b. 647. 26 Stat. 209. They were held bad, on demur-

rer, by the District Court. 195 Fed. Rep. 578. The

two counts allege substantially the same facts; the first

laying them as a combination in restraint of the trade

of the defendants thembelves, the second as a conspir-

acy in restraint of the trade of others, shoe manufac-

turers.

The facts alleged are as follows: For the last twenty-five

years practically all the shoes worn in the United States

have been made by the help of machines, grouped as last-

ing machines, welt-sewing machines and outsole-stitching

machines, heeling machines and metallic fastening ma-

chines, there being a large variety of machines in each

group. (These machines of course are not alleged to do

all the work of making finished shoes.) There is a great

number of shoe factories, and because the machines are

expensive and the best of them patented, the manufac- |

turers have had to get them principally from the defend-

ants. Before and up to February 7, 1899, the defendants

Winslow, Hurd and Brown, through the Consolidated

paten

made in the United States; the defendants Barbour and

Howe, through the Goodyear Shoe Machinery Company,

in like manner made eighty per cent. of all the welt-sewing

machines and outsole-stitching machines, and ten per

row, (against whom the indictment has been dismissed),

through the McKay Shoe Manufacturing Company,

made seventy per cent. of all the heeling machines and

eighty per cen’ of all the metallic fastening machines

made in the United States. The defendants all were

carrying on commerce among the States with such of the

—

furnished by the defendants, or if they use any such ma-

chines furnished by other machinery makers, then all

machines let by the defendants shall be taken away.

This condition they constantly have enforced. The de-

fendants are alleged to have done the acts recited with

intent unreasonably to extend their monopolies, rights

and control over commerce among the States; to enhance

the value of the same at the expense of the public, and

to discourage others from inventing and manufacturing

machines for the work done by those of the defendants.

The organization of the new company and the turning

over of the stocks and business to it are alleged to con-

stitute a breach of the Sherman Act.

It is to be observed that the conditions now inserted in

the leases are not alleged to have been contemporaneous

with the combination, or to have been contemplated when

it was made. The District Court construed the indict-

ment as confined to the combination of February 7, that

is, simply to the merger of the companies without regard

to the leases subsequently made, 195 Fed. Rep. 592, 504;

PEER TI 22: 2

UNITED STATES ». WINSLOW. 217

wm U.8. Opinion of the Court.

and we have no jurisdiction to review this interpretation

of the indictment. United States v. Patien, 226 U. S. 525.

Hence the only question before us is whether that com-

bination taken by itself was within the penalties of the

Sherman Act. The validity of the leases or of a combina-

tion contemplating them cannot be passed upon in this

case.

Thus limited the question does not require lengthy dis-

cussion, and a large part of the argument addressed to us

concerned matters not open here. On the face of it the

combination was simply an effort after greater efficiency.

The business of the several groups that combined, as it

existed before the combination, is assumed to have been

legal. The machines are patented, making them is a

monopoly in any ease, the exclusion of competitors from

the use of them is of the very essence of the right conferred

by the patents, Paper Bag Patent Case, 210 U. S. 405, 429,

and it may be assumed that the success of the several

groups was due to their patents having been the best. As,

by the interpretation of the indictment below, 195 Fed.

Rep. 591, and by the admission in argument before us,

they did not compete with one another, it is hard to see

why the collective business should be any worse than its

component parts. It is said that from seventy to eighty

per cent. of all the shoe machinery business was put into a

single hand. This is inaccurate, since the machines in

question are not alleged to be types of all the machines

used in making shoes, and since the defendants’ share in

commerce among the States does not appear. But taking

it as true we can see no greater objection to one cor-

poration manufacturing seventy per cent. of three non-

competing groups of patented machines collectively used for

making a single product than to three corporations making

the same proportion of one group each. The disintegra-

tion aimed at by the statute does not extend to reducing

all manufacture to isolated units of the lowest degree.

218 OCTOBER TERM, 1912.

Syllabus. 227 U. 8.

It is as lawful for one corporation to make every part of a

steam engine and to put the machine together as it would

be for one to make the boilers and another to make the

wheels. Until the one intent is nearer accomplishment

than it is by such a juxtaposition alone, no intent could

raise the conduct to the dignity of an attempt. See Virtue

v. Creamery Package Manufacturing Co., ante, p. 8. Swift

& Co. v. United States, 196 U. S. 375, 396.

It was argued as an afterthought that the act of March 2,

1907, c. 2564, 34 Stat. 1246, under which the United

States took this writ of error, was repealed by the Ju-

dicial Code of March 3, 1911, c. 231. 36 Stat. 1087, | Wh

1168. But it is not mentioned among the statutes ex-

pressly repealed by § 297 of the latter act, it is not super-

seded by any other regulations of the matter, it is a special } ,

provision, and on principles similar to those discussed in

Ex parte United States, Petitioner, 226 U. S. 20, it must

be held not to have been repealed. See further Johnson v.

United States, 225 U. S. 405, 419; Petri v. Creelman Lum-

ber Co., 199 U. S. 487, 497.

Judgment affirmed.

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