38 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 



Tobacco Co.^° and the Standard Oil Co.^^ Some of the practices in 

 question are mentioned in the following quotation from the opinion : 



The corporation, it was said, did not at any time abuse the power or 

 ascendancy it possessed. It resorted to none of the brutalities or tyrannies 

 that tlie cases illustrate of other combinations. It did not secure freight re- 

 bates; it did not increase its profits by reducing the wages of its employees — 

 whatever it did was not at the expense of labor ; it did not increase its profits 

 by lowering the quality of its products, nor create an artificial scarcity of them ; 

 it did not oppress or coerce its competitors — its competition, though vigorous, 

 was fair ; it did not undersell its competitors in some localities by reducing its 

 prices there below those maintained elsewhere, or require its customers to enter 

 into contracts limiting their purchases or restricting them in resale prices; it 

 did not obtain customers by secret rebates or departures from its published 

 prices ; there was no evidence that it attempted to crush its competitors or drive 

 them out of the market, nor did it take customers from its competitors by un- 

 fair means, and in its competition it seemed to make no difference between large 

 and small competitors. 



This decision makes clear that the legality of a large industrial 

 unit depends on its acts and conduct and not on its size. Bigness 

 which has come about through development along normal lines and 

 without unfair practices or wrongful acts does not constitute ille- 

 gality. 



In the American Tobacco Co., in the Standard Oil Co., and in the 

 United States Steel Corporation cases the legality of a large indus- 

 trial unit or combination was involved. In each of these cases the 

 industrial unit or combination as it existed at the time suit was 

 brought was the result of the amalgamation or uniting of a number 

 of smaller organizations. As already indicated in the discussion 

 under this heading, there are ways in which the antitrust laws may 

 be violated other than through the illegal organization and operation 

 of large combinations. In the case ^^ involving the Eastern States Ke- 

 tail Lumber Dealers' Association it appeared that this association 

 was made up of a number of local retail dealers' associations in 

 various States. Blacklists of all wholesale lumber dealers who sold 

 direct to consumers or builders were circulated by the Eastern States 

 among the local associations of lumber dealers, who in turn circu- 

 lated such lists among the retail dealers. The evident purpose was to 

 discourage the retail dealers from dealing with such wholesale deal- 

 ers. The Supreme Court held that such conduct was unlawful as 

 " Unduly suppressing competition," and affirmed the judgment of the 

 lower court enjoining the further circulation of such reports or 

 blacklists. 



A manufacturer or dealer, under the decisions of the Supreme 

 C5ourt, can not enter into agreements with those to whom he sells 



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



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



"Eastern States Retail Lumber Dealers' Assn. v. United States, 234 U. S. 600. 



