on the threat that if they did not do so, no wall paper would be sold to them, and that it would be impossible for them to continue in business. Voight & Sons' Company, further charged that in purchasing over $200,000 worth of the plaintiff's paper they had been forced to pay 50 per cent more than they would have had to pay if there had been competition.

The trial court having found in favor of the defendants, the Continental Company carried the controversy to the Supreme Court where the contest was waged with as much bitterness as had marked the legal struggle in the lower courts. The case was decided against the Continental Company by a majority of one. In the Courts opinion Justice Harlan, said:

The Continental Wall Paper Company seeks in legal effect, the aid of the court to enforce a contract for the sale and purchase of goods which it is admitted by the demurrer, was in fact and was intended by the parties to be based upon agreements that were and are essential parts of an illegal scheme. We state the matter in this way, because the plaintiff by its demurrer admits for the purposes of this case the truth of all the facts alleged in the third defence.

If the facts stated in the third defence are sufficient to prevent any recovery whatever by the plaintiff it is not necessary to go further and consider the questions raised by the other defences.

The "third defence" relating solely to the trust feature of the case the defendant's brief discussed at length the main provisions of the Sherman anti-trust law. Especial emphasis was laid on the clauses of the law prohibiting any attempt to restrain trade or control the prices of goods offered for sale in the open market.

After describing the magnitude of the combination and the manner of controlling trade and the regulation of retail prices through an agreement which the trust's customers were forced to sign before receiving goods, Justice Harlan in conclusion said:

Upon the whole case and without further citation of authority, we adjudge upon the admitted facts that the combination represented by the plaintiff in this case, was illegal under the Anti-Trust act of 1890, is to be

taken as one intended, and which would have the effect directly, to restrain and monopolize trade among the several States and with foreign States; and that the plaintiff cannot have a judgment for the amount of the account sued on, because such a judgment would in effect be in aid of the execution of agreements constituting that illegal combination. We consequently hold that the Circuit Court of Appeals properly sustained the third defence in the case, and rightly dismissed the suit.

Justice Holmes filed a dissenting opinion which was concurred in by Justices White, Brewer and Peckham.

In the dissenting opinion it was held, in effect, that “a lawful purchase is not made unlawful merely by being the fulfilment of an unlawful contract."

To correct any misunderstanding there might be as to the scope of the decision, it was supplemented by an authorized explanation to this effect:

The Supreme Court held that where the contract to purchase the goods was a part of the illegal combination in restraint of trade and was itself one of the agreements in restraint of trade, and where the person or company which bought the goods was a party by such purchase to the illegal combination, the court would not give its aid to carry out the forbidden contract. If, therefore, the buyer defended the suit on the ground that the contract of purchase was a part of the agreement in restraint of trade, and the seller admitted the fact, there could be no recovery on the account.

During the progress of the long litigation, Louis Voight & Sons' Company went into the hands of receivers in July, 1908, and at the time of the decision the claim with interest added amounted to $81,000.

PART II

(SECOND SECTION)

ALL ANTI-TRUST SUITS AND INDICTMENTS

PRESIDENT TAFT'S ADMINISTRATION, MARCH 4, 1909

(George W. Wickersham, Attorney-General)

1.-United States v. American Sugar Refining Company et al. Indictment under Sherman Law, July 1, 1909. A plea of the statute of limitations was interposed by the defendant Kissel, which was taken to the Supreme Court, where it was decided in favor of the Government. (See U. S. v. Kissel, 218 U. S. 601.)

The individual defendants named in the indictment were Washington B. Thomas, president of the American Sugar Refining Company; John E. Parsons, counsel for the company and a member of its Executive Committee; Arthur Donner, treasurer of the company and a director; John Mayer, George H. Frazier, Charles H. Senff, directors; Gustav E. Kissel, and Thomas B. Harned.

The indictment in its fourteen counts charged all the defendants alike with conspiracy to restrain interstate trade and foreign commerce in the manufacture and sale of raw and refined sugar. The principal "overt act" set forth in the indictment described the way in which the defendants secured control through a loan of $1,250,000 of the Philadelphia refinery of the Pennsylvania Sugar Refining Company. Concerning this "deal" which for years tied up the business of a rival, the indictment had this to say:

Adolph Segal at Philadelphia on December 30, 1903, owned the majority of the stock of the Champion Construction Company, which in turn held 26,000 out of 50,000 shares of the capital stock of the Pennsylvania Sugar Refining Company, and in consequence of this stockholding Segal possessed a controlling interest in the Pennsylvania Company. The defendants,

knowing these facts, arranged to get possession and control of the majority shares of the Pennsylvania Company by inducing Segal to borrow for one year, from January 4, 1904, through Gustav E. Kissel, acting as agent for an "unknown lender," $1,250,000 for use in his various enterprises. The "lender" was the American Sugar Refining Company.

The indictment then explained how the 26,000 shares of the stock obtained as part of the collateral for the loan were voted by Kissel for the election of directors, without Segal being aware of the fact that the American Sugar Refining Company was the real lender and was moved to make the loan so as to prevent the Pennsylvania Sugar Refining Company from carrying on its business.

The indictment continued:

Said corporation and individual defendants well knew that Adolph Segal would be dependent upon the dividends and profits from said Pennsylvania Sugar Refining Company for moneys with which to pay such interest and repay such borrowed sums, and in the event of said Pennsylvania Sugar Refining Company's failure to carry on its said business, trade, and commerce, and to pay such dividends, his financial affairs would be put in a ruinous condition and the hold of said corporation defendant upon him would be greatly strengthened.

Setting forth the continuing character of the motive behind the conspiracy, the indictment charged that it was understood when control had been acquired that the defendant corporation and individual defendants were to use every means in their power to extend the power of control, by keeping said Adolph Segal involved in debt and his affairs in such a condition as to prevent his relieving himself from his obligations, and by wrongfully and arbitrarily refusing to accept payment of such obligations from him, either before or at their maturity, or to surrender to him such power of control over and management of said Pennsylvania Sugar Refining Company.

The defendants, the indictment charged, made use of their power of control to prevent the Pennsylvania Company from engaging in business,

thereby to bring about the ruin of said Pennsylvania Sugar Refining Company, through inaction and the destruction of its property and facilities through decay, and eliminate and entirely prevent the competition

with said corporation defendant which, but for the acts of said corporation and individual defendants in the premises, would come into existence through the operation of said Pennsylvania Sugar Refining Company.

Telling of the "overt acts" committed in pursuance of the conspiracy, the indictment gave as the first of them the text of the loan agreement of Dec. 30, 1903, between Segal and Gustav E. Kissel, as "agent." The agreement set forth that twelve months after date the borrower promised to pay to Kissel or his assigns $1,250,000, with interest at 6 per cent payable quarterly. It specified as collateral 1,000 first mortgage bonds of the Majestic Apartment House Company, the particular real estate venture in which Segal was then concerned; 500 first mortgage bonds of the Pennsylvania Sugar Refining Company, and the receipt of Frank K. Hipple, President of the Real Estate Trust Company of Philadelphia, for 25,000 shares of the capital stock of the Pennsylvania Sugar Refining Company, with all voting and other rights belonging to it.

The agreement further provided that in case of the nonpayment of the loan at maturity or in case of default at any interest period, the lender could sell at his own option, without notice to Segal, all of the collateral securing the loan without liability for any equity in the collateral in excess of the face of the loan and unpaid interest. This arranged matters so that Segal had no chance to get his stock back in case of a default. To make the hold on him doubly secure, the agreement provides that if at such time the proceeds of the sale of collateral shall be insufficient to pay off the loan and accrued interest, Segal would still remain liable for the unpaid balance.

After stipulating certain minor details in regard to the loan, the agreement provided for the transfer of the voting power of the Pennsylvania Company's stock and the election of a majority of directors at the instance of Kissel. By way of emphasizing the intent of the transaction the agreement provided that "the control hereby given is a material part of the consideration for the said note."

Following the making of the loan, the American Sugar