other states, and the members of the stock exchange are employed to sell by letter from the owners of the stock in other states, and send agents to other states to solicit business, and advance money to the cattle owners, and pay their drafts, and aid them in making the cattle fit for market. 2. A by-law of the Kansas City Live-Stock Exchange, which regulates the commissions to be charged by members of that association for selling live stock is not in restraint of interstate commerce, or a violation of the act of July 2, 1890, to protect commerce from un lawful restraints. 8. A commission agent who sells cattle at their place of destination, which are sent from another state to be sold, is not engaged in interstate commerce; nor is his agreement with others in the same business, as to the commissions to be charged for such sales, vold as a contract in restraint of that com merce. 4. In order to come within the provisions of the statute, the direct effect of an agreement of combination must be in restraint of trade or commerce among the several states or with foreign nations. 5. Restrictions on sending prepaid telegrams or telephone messages, made by a by-law of a live-stock exchange, when these restrictions are merely for the regulation of the business of the members, and do not affect the business of the telegraph company, are not void as regulations of interstate commerce. 6. The business of agents in soliciting consignments of cattle to commission merchants In another state for sale, is not interstate commerce; and a by-law of a stock exchange restricting the number of solicitors to three does not restrain that commerce, or violate the act of Congress. 7. The fact that a state line runs through stock yards, and that sales may be made of a lot of stock in the yards which may be partly in one state and partly in another, has no effect to make the business of selling stock interstate commerce. 8. A combination of commission merchants at stock yards, by which they refuse to do business with those who are not members of their association, even if it is illegal, is not subject to the act of Congress of July 2, 1890, to pro tect trade and commerce, since their business is not interstate commerce. [No. 210.] for decision. Reversed, and case remitted to See same case below, 82 Fed. Rep. 529. Statement by Mr. Justice Peckham: *This suit was commenced by the United [579] States attorney for the district of Kansas, acting under the direction and by the authority of the Attorney General of the United States, against Henry Hopkins and the other defendants, residents of the state of Kansas and members of a voluntary unincorporated association known and designated as the Kansas City Live Stock Exchange. The purpose of the action is to obtain the dissolution of the exchange and to perpetually enjoin the members from entering into or from continuing in any combination of a like character. As a foundation for the relief sought it was alleged in the bill that the members of this association, known as the Kansas City Live Stock Exchange, have adopted articles of association, rules, and by-laws which they have agreed to be bound by; that the business of the exchange is carried on and conducted by a board of directors at the Kansas City stock yards, which are situated partly in Kansas City in the state of Missouri and partly in Kansas City in the state of Kansas, the building owned by the stock-yards company being located one half of it in the state of Missouri and the other half in the state of Kansas, and half of the defendants have offices and transact business in these stock yards and in that part of the building which is within the state of Kansas and the other half in that part of the building which is in Argued February 28, March 1, 1898. De- from the states of Nebraska, Colorado, Texas, ON A WRIT OF CERTIORARI to the United States Circuit Court of Appeals for the Eighth Circuit to bring up the whole case in which that court had certified certain questions. The suit was brought by the United States against Henry Hopkins et al., members of the Kansas City Live Stock Exchange, to obtain the dissolution of the exchange and perpetually enjoin the members from entering into or from continuing in any combination of a like character. The Circuit Court of the United States for the District of Kansas, First Division, granted the injunction, and from the order granting it an appeal was taken by the defendants to said Circuit Court of Appeals, and upon a writ of certiorari the whole case was brought here Missouri, Iowa, and Kansas and the terri- ico; that when this stock is received at the stock yards it is sold by the defendants, mem- The bill also alleges that large numbers of curity for money advanced by them to the different owners to enable them to feed and prepare the cattle for market, and that when the live stock so mortgaged are ready for shipment, they are sent to the defendants who have advanced the money and received the mortgages, and on the sale of the stock the amount of these advances and interest is deducted from the proceeds of the sale of the eattle by the commission merchants owning the mortgages; that ninety per cent of the members of the exchange make such advances, and that the market is largely sustained by means of the money thus advanced to the cattle raisers by the defendants, and that Kansas City is the only place for many miles about which constitutes an available market for the purchase and sale of live stock from the large territory located in the states and territories already named; that it is the custom of the owners of the cattle, many of them living in different states, and who consign their stock to the Kansas City stock yards for sale, to draw drafts on the commission merchants to whom the live stock is consigned, which the consignors attach to the bill of lading issued by the carrier, and the money on these drafts is advanced by the local banks throughout the western states [681]*and territories. These drafts are paid by the co consignees and the proceeds remitted to the various owners through the banks. The business thus conducted is alleged to be interstate commerce, and it is further alleged that if the person to whom the live stock is consigned at Kansas City is not a member of the exchange, he is not permitted to and cannot sell or dispose of the stock at the Kansas City market, for the reason that the defendants, and all the other commission merchants, members of the exchange, refuse to buy live stock or in any manner negotiate or deal with or buy from a person or commission merchant who is not a member of the exchange, and thus the owner of live stock shipped to the Kansas City market is compelled to reship the same to other markets, and by reason of the unlawful combination existing among the defendants and the other members of the exchange the owner is prevented from delivering this stock at the Kansas City stock yards, and the sale of stock is thereby hindered and delayed, entailing extra expense and loss to the shipper, and placing an obstruction and embargo on the marketing of all live stock shipped from the states and territories to the Kansas City market which is not consigned to the stock-yards company or to the defendants, or some of them, members of the stock exchange. It is alleged that the defendants, as members of the exchange, have adopted certain rules, among them being rules 9 and 16, which are particularly alleged to be in restraint of trade and commerce between the states, and intended to create a monopoly, in contravention of the laws of the United States in that Lehalf. Rule 9 provides as follows: "Section 1. Commissions charged by members of this association for selling live stock shall not be less than the following named rates." Sections 2, 3, 4, 5, 6, and 7 relate to the amounts of such commissions, and it is alleged that in some instances the commissions are greater than had theretofore been paid. Section 8 permits the members to handle the business of *nonresident commission firms [582] when the stock is consigned directly to or from such firm, at half the rates fixed by the rule, provided the nonresident commission firms are established at the markets named in the section. Section 10 prohibits the employment of any agent, solicitor, or employee except upon a stipulated salary not contingent upon the commissions earned, and it provides that not more than three solicitors shall be employed at one time by a commission firm or corporation, resident or nonresident of Kansas City. Section 11 forbids any member of the exchange from sending or causing to be sent a prepaid telegram or telephone message quoting the markets or giving information as to the condition of the same, under the penalty of a fine as therein stated. The rule, however, permits prepaid messages to be sent to shippers quoting actual sales of their stock on the date made; also to parties desiring to make purchases on the market. Rule 16 provides, in section 1, "that no member of the exchange shall transact business with any persons violating any of the rules or regulations of the exchange, or with an expelled or suspended member after notice of such violation, suspension, or expulsion shall have been issued by the secretary or board of directors of the exchange." It is alleged that the defendants in adopting these rules and in forming the exchange and carrying out the same have violated and are violating the statute of the United States, approved July 2, 1890, entitled "An Act to Protect Trade and Commerce against Unlawful Restraints and Monopolies," and it is charged that it was the purpose of the defendants, in organizing the exchange and in adopting the rules mentioned, to prevent the shipment or consignment of any live stock to the Kansas City market unless it was shipped or consigned to the Kansas City stock yards and to some one or other of the defendants, members of the exchange, and to compel the shippers of live stock from other states and from the territories to pay to the defendants the commissions and charges provided for in rule 9, and to prevent such shippers *from placing their property on sale [583] at the Kansas City market unless these commissions were paid. The answer of the defendants admitted their forming the exchange and becoming members thereof, and adopting, among others, the rules specially mentioned in complainant's bill. They denied that the exchange itself engaged in any business whatever, and alleged that it existed simply in order to prescribe rules and provide facilities for the transaction of business by the members thereof, and to govern them by such rules and regulations as have been evolved and sanctioned by the developments of commerce, and which are universally recognized to be just and fair to all concerned. It was further set up in the answer that each member of the organization was in fact left free to compete in every manner and by all means recognized to be fair and just for his share of the business which comes to the point at which the members of the organization do business: that in adopting their rules they followed in all substantial respects the provisions which had been made upon the same subject respectively by the exchanges theretofore established at Chicago and East St. Louis, Illinois, and which have been since established at St. Louis, Omaha, Indianapolis, Buffalo, Sioux City, and Fort Worth. That the exchange at no time refused to admit as a member any reputable person who was willing to comply with the conditions of membership and to abide by the rules of the organization. Various allegations in the bill as to the effect of the organization in precluding any sales or purchases of cattle other than by its members are denied. such rules and regulations are in all respects The complainants, in addition to their bill, The defendants read counter-affidavits for the purpose of sustaining their answer, which were replied to by the complainants filing affidavits in rebuttal, and upon these affidavits and the pleadings above described an application for an injunction was made to the circuit court of the United States for the district of Kansas, first division. That court, after argument, granted an injunction restraining the defendants from combining by contract, express or implied, so as by their acts, conduct, or words to interfere with, hinder, or impede others in shipping, trading, selling, or buying live stock that is received from the states and territories at the stock yards in Kansas City, Missouri, and Kansas City, Kansas; also enjoining them from acting under the rules of the exchange known as rules 9 and 16, and from attempting to impose any fines or penalties upon members for trading or offering to trade with any person respecting the purchase and sale to a person who is not a member thereof, who ing in favor of any member of the exchange has violated its rules and been suspended because of such membership, and especially from membership, and who has voluntarily from discriminating against any person tradwithdrawn therefrom and announced his pur-ing at the stock yards, and from refusing, by The defendants also deny that the exercise of their occupation as commission merchants, doing business as members of the exchange, constitutes or amounts to interstate commerce within the meaning of the Constitution or laws of the United States. They allege that they have no part in or control over the disposition of the live stock sold by them to others, nor of live stock purchased by them as commission merchants acting for others. They allege that the stock-yards company permits any person whatsoever to [584] transact business at its yards who will pay the established charges of that company for its services, and that in point of fact a very large part of the business done at said yards is transacted by persons who are not members of the exchange and without the interposition of such members. It is also alleged in their answer that they are under no obligations to extend the privileges of the exchange of any live stock; and also from discriminat pose to carry on his business as a competitor of the members of such exchange to the destruction of said organization and its rules and to the injury of his competitors. It is also set up that defendants cannot be compelled to deal with a nonmember of their organization, or a person violating its rules, or with one who has been suspended for such suspended violation, or who has withdrawn therefrom, or who has announced his intention to destroy said organization and to compete with the members thereof, and the defendants al united or concerted action, or by word, per- lege that they cannot be compelled to deal in business at the Kansas City stock yards with any person whatsoever, and that they to employ labor or assistance in soliciting had a right to establish said exchange, and shipments of live stock from other states or now have the right to maintain the same, territories, and from enforcing any agree and to require the observance of its rules and regulations on the part of their associates so long as they desire to retain the privileges of membership in the body. They allege that their rules are in harmony with the rules and regulations of commercial exchanges which have existed for more than a hundred years, and which are now to be found in every state almost in the United States and throughout the world, and that ment not to send prepaid telegrams from The district judge delivered an opinion ! Π Π under the provisions of section 6 of the act of March 3, 1891, and thereupon a writ of certiorari was issued from this court, and the whole case brought here for decision. Messrs. L. C. Krauthoff, Gustavus A. Koerner, and John S. Miller, for appellants. Messrs. Samuel W. Moore, Special Assistant to the Attorney General, and John K. Richards, Solicitor General, for appellees. (586) *Mr. Justice Peckham, after stating the facts, delivered the opinion of the court: The relief sought in this case is based exclusively on the act of Congress approved July 2, 1890, chap. 647, entitled "An Act to Protect Trade and Commerce against Unlawful Restraints and Monopolies," commonly spoken of as the anti-trust act. 26 Stat. at L. 209. The act has reference only to that trade or commerce which exists, or may exist, among the several states or with foreign nations, and has no application whatever to any other trade or commerce. The question meeting us at the threshold, therefore, in this case is, What is the nature of the business of the defendants, and are the by-laws, or any subdivision of them above referred to, in their direct effect in restraint of trade or commerce among the several states or with foreign nations; or does the case made by the bill and answer show that any one of the above defendants has monopolized, or attempte to monopolize, or combined or conspired with other persons to monopolize, any part of the trade or commerce among the several states or with foreign nations? [587] *That part of the bill which alleges that no and if it be not interstate commerce, the va- We come, therefore, to the inquiry as to which, if it affect interstate commerce at As set forth in the record, the main facts If an owner of cattle in Nebraska accompanied them to Kansas City and there personally employed one of these defendants to sell the catue at the stock yards for him on commission, could it be properly said that such defendant in conducting the sale for his principal was engaged in interstate commerce? Or that an agreement between himself and others not to render such services for less than a certain sum was a contract in restraint of interstate trade or commerce? We think not. On the contrary, we regard the services as collateral to such commerce and in the nature of a local aid or facility provided for the cattle owner towards the accomplishment of his purpose to sell them; and an agreement among those who render the services relating to the terms upon which they will render them is not a contract in restraint of interstate trade or commerce. Is the true character of the transaction altered when the owner, instead of coming from Nebraska with his cattle, sends them 171 U. S. state. This difference in the manner of mak- ❘ of the various things done by defendants for The by-laws of the exchange relate to the business of its members who are commission merchants at Kansas City, and some of these by-laws, it is claimed by the government, are in violation of the act of Congress because they are in restraint of that business which is in truth interstate commerce. That one of the by-laws which relates to the commissions to be charged for selling the various kinds of stock, is particularly cited as a violation of the act. In connection with that by-law it will be well to examine with some detail the nature of defendants' busi ness. It is urged that they are active promoters of the business of selling cattle upon consignment from their owners in other states, and that in order to secure the business the defendants send their agents into other states to the owners of the cattle to solicit the business from them; that the defendants also lend money to the cattle owners and take back mortgages upon the cattle as security for the loan; that they make advances of a portion of the purchase price of the cat tle to be sold, by means of the payment of drafts drawn upon them by the shippers of the cattle in another state at the time of the shipment. All these things, it is said, constitute intercourse and traffic between the citizens of different states, and hence the bylaw in question operates upon and affects commerce between the states. The facts stated do not, in our judgment, in any degree alter the nature of the services performed by the defendants, nor do they render that particular by-law void as in re[590]straint "of interstate trade or commerce because it provides for a minimum amount of commissions for the sale of the cattle. Objections are taken to other parts of the by-laws which we will notice hereafter. Notwithstanding these various matters undertaken by defendants, we must keep our attention upon the real business transacted by them, and in regard to which the section of the by-law complained of is made. The section amounts to an agreement, and it relates to charges made for services performed in selling cattle upon commission at Kansas City. The charges relate to that business alone. In order to obtain it the defendants advance money to the cattle owner; they pay his drafts, and they aid him to keep his cattle and make them fit for the market. All this is done as a means towards an end; as an inducement to the cattle owner to give one of the defendants the business of ness, results in their sending outside the city, to cattle owners, to urge them by distinct and various inducements to send their cattle to one of the defendants to sell for them. In this view it is immaterial over how many states the defendants may themselves or by their agents travel in order to thereby secure the business. They do not purchase the cattle themselves; they do not transport them. They receive them at Kansas City, and the complaint made is in regard to the agreements for charges for the services at that point in selling the cattle for the owner. Thus everything at last centers at the market at Kansas City, and the charges are for services there, and there only, performed. The selling of an article at its destination, which has been sent from another state, while it may be regarded as an interstate sale and one which the importer was entitled to make, yet the services of the individual employed at the place where the article is sold are not so connected with the subject sold as to make them a portion of interstate commerce, and a combination in regard to [591] the amount to be charged for such service is not, therefore, a combination in restraint of that trade or commerce. Granting that the cattle themselves, because coming from another state, are articles of interstate commerce, yet it does not therefore follow that before their sale all persons performing services in any way connected with them are themselves engaged in that commerce, or that their agreements among each other relative to the compensation to be charged for their services are void as agreements made in restraint of interstate trade. The commission agent in selling the cattle for their owner simply aids him in finding market; but the facilities thus afforded the owner by the agent are not of such a nature as to thereby make that. agent an individual engaged in interstate commerce, nor is his agreement with others engaged in the same business, as to the terms upon which they would provide these facilities, rendered void as a contract in restraint of that commerce. Even all agreements a among buyers buyers of cattle from other states are not necessarily a violation of the act, although such agreements may undoubtedly affect that commerce. The charges of the agent on account of his services are nothing more than charges for aids or facilities furnished the owner whereby his object may be the more easily and readily accomplished. Charges for the transportation of cattle between different states are charges for doing something which is one of the forms of and which it. self constitutes interstate trade or commerce, while charges or commissions based upon services performed for the owner in effecting the sale of the cattle are not direct selling the cattle for him when the owner ly connected with, as forming part of, intershall finally determine to sell them. That state commerce, although the cattle may business is not altered in character because have come from another state. Charges for |