the Division of the - - District of .

The United States, by the Attorney General of the United
States, and J. H., the United States Attorney for the
District of - , brings this its petition

against

The Addyston Pipe & Steel Company, a corporation char-
tered by and doing business under the laws of the state of



548 SUITS IN EQUITY.

Ohio, and a resident of said state, with its principal office
in the city of Cincinnati, in said state; Dennis Long &
Co., a corporation (or partnership) chartered by and do-
ing business under the laws of the state of Kentucky, a
resident of said state, with its principal office in the city
of Louisville, Kentucky; Howard-Harrison Iron Com-
pany, a corporation chartered by and doing business un-
der the laws of the state of Alabama, and a resident of
said state, with its principal office at Bessemer, Alabama;
Anniston Pipe & Foundry Company, a corporation char-
tered by and doing business under the laws of the state
of Alabama, and a resident of said state, with its prin-
cipal office at Anniston, Alabama; South Pittsburg Pipe
Works, a corporation chartered by and doing business
under the laws of the state of Tennessee, and a resident
of said state, with its principal office at South Pittsburg,
Tennessee; Chattanooga Foundry & Pipe Works, a cor-
poration chartered by and doing business under the laws
of the state of Tennessee, and a resident of said state,
with its princapl office at Chattanoga, Tennessee.
Petitioner charges:

First. That defendants, and each of them are and have
been for several years engaged in the manufacture of cast
iron pipe, a commodity in general use by the public through-
out the country, and necessary for drainage and sewerage
purposes, and used especially by gas and water companies
and by municipal corporations.

Second. Defendants are all residents of that portion of
the country where pig iron and fuel and all elements enter-
ing into the production of cast iron pipe are cheaper, and
where said cast iron pipe can be made at less cost to the man-
ufacturer than any place else.

Third. Petitioner further charges that defendants are the
only persons engaged in the manufacture of cast iron pipe,
and who have capacity to supply the demand and fulfill the



BILLS IN SPECIAL CASES. 549

contracts, in the following states and territories, to wit:
Alabama, Arizona, California, Colorado, North Dakota,
South Dakota, Florida, Georgia, Idaho, Kansas, Kentucky,
Louisiana, Mississippi, Missouri, Montana, Nebraska, Indian
Territory, North Carolina, South Carolina, New Mexico,
Minnesota, Michigan, Tennessee, Texas, Illinois, Wyoming,
Indiana, Ohio, Utah, Washington, Oregon, Iowa, West Vir-
ginia, Nevada, Oklahoma and Wisconsin, being 36 states and
territories, and embracing that portion of the United States
that is most rapidly developing, and where said cast iron pipe
is most largely used. There are a few other pipe works lo-
cated in the above territory, but for want of capacity they are
unable to compete with defendants, and by reason of the con-
duct on the part of defendants hereinafter mentioned, they
have been practically driven out of the market in said terri-
tory.

Fourth. Petitioner charges, upon information that it be-
lieves to be true, that defendants, in order to monopolize the
trade in cast iron pipe, especially in the above-named states
and territories, and force the price of the same to an unrea-
sonable and exorbitant rate, and destroy all competition in
regard thereto, and force the public to pay exorbitant and
unreasonable prices for said cast iron pipe, did, on or about
the 28th day of December, 1894, in the city of Chattanooga,
Tennessee, by and through their regular appointed and qual-
ified officers, agents and representatives, enter into a contract
or combination, in the form of trust or conspiracy, in re-
straint of trade or commerce among the several states and ter-
ritories above named, in regard to the manufacture and sale
of said cast iron pipe, which said fraudulent and criminal con-
spiracy was entered into in violation of law, and in defiance
of the same, and was intended by defendants to enable them
to defraud the public in the purchase and use of the pipe man-
ufactured by them. The name of this criminal and unlawful
conspiracy is the " Associated Pipe Works," and its members



650 SUITS IN EQUITY.

are the defendants above named. Petitioner charges, upon
information and belief, that defendants are now, and have
been since said 28th day of December, 1894, operating their
shops in obedience to and according to the agreement en-
tered into on said date, and are now engaged in selling and
shipping from their shops said cast iron pipe into other states
and territories than the states and territories in which defend-
ants reside, and under contracts entered into with citizens
of such other states and territories.

Fifth. Petitioner further charges that it was a part of said
fraudulent and criminal combination and conspiracy afore-
said, that there should be no competition among defendants as
to any work done or pipe furnished in any of the states and
territories above named, and in order to make effectual .this
criminal purpose, it was agreed that upon all work done in
the territory named, a "bonus" should be charged on every
ton of pipe sold, the amount of said " bonus " being deter-
mined by how much the combination could force the customer
to pay, and petitioner here charges that defendants have col-
lected a " bonus " ranging from three to nine dollars on every
ton of pipe sold since the date the trust was formed. The
" bonus " represents the amount charged for pipe over and
above a reasonable and fair price for same, and above the
price that defendants would be willing to sell for, if the trust
or combination did not exist, and they have to compete with
each other for the work.

Petitioner charges that the output of the shops belonging
to the six defendants above named, amounts to about 220,000
tons of pipe annually, and this multiplied by the average
" bonus " received, of six dollars per ton, amounts to one
million three hundred and twenty thousand dollars, so your
honors may get some idea of the immense benefits derived by
defendants from their fraudulent, criminal and unlawful com-
bination, and see to what extent the public has been, and is



BILLS IX SPECIAL CASES. 55 J

being, robbed and plundered by reason of the existence of the
trust aforesaid.

Petitioner is informed and believes, and upon such informa-
tion charges, that the amount of pipe sold and shipped by
defendants for this year, 1896, will exceed said amount of
220,000 tons, nearly all of which has been sold and shipped
according to the terms and under the agreement entered into
between defendants on said 28th day of December, 1894;
and defendants are still and now engaged in the sale and ship-
ment of the same to the states and territories other than in
which they reside.

Sixth. The above-named states and territories were design
nated by defendants in their conspiracy as " pay territory "
and all territory not included in the above was called " free
territory.'' In " pay territory," except as to certain cities,
known as " reserved cities " where all the pipe was to be fur-
nished, by some particular shop, a " bonus " of so much per
ton was fixed on all pipe sold and either of defendants were
allowed to solicit work and furnish pipe at any price it saw
proper, but it had to account to the pool or trust, for the
" bonus " agreed upon for that particular state. It made no
difference at what price the work was done, and these " bo-
nuses " were remitted from one to another every two weeks,
each sharing in the profit represented by the " bonus," al-
though they may have had nothing to do with the work. This
arrangement kept one from competing with the other, the in-
centive not to do so being that they would divide the " bonus "
received, and, as petitioner charges, prevented the public from
obtaining the pipe at a fair and reasonable price.

Seventh. To make said fraudulent and unlawful criminal
conspiracy effectual, and in order to deprive the public of
their right to obtain said cast iron pipe at a fair and reason-
able price, petitioner further charges that it was a part of the
agreement that defendant should, at once, notify all parties to
whom they had made quotations, withdrawing the same, and



652 SUITS IN EQUITY.

accept no orders after that date on quotations sent out be-
fore the conspiracy was entered into, and petitioner charges
that said defendants did, at once, withdraw said quotations
where they had sent them out, and at once prepared new
quotations for the territory embraced in their combine, ad-
vancing the price of pipe from three to nine dollars on every
ton, and this too, at a time of untold financial depression, and
when there had been no increase in the wages of labor, or the
cost of any of the materials used in the manufacture of said
pipe, and they have been receiving this price for their pipe
from that date -to the present time.

Eighth. It was furthermore a part of said fraudulent com-
bination, which petitioner avers has been strictly carried out,
that all the pipe for certain cities in the above-named territory
was to be divided between defendants. For instance, An-
niston Pipe Works was to supply Atlanta; Howard-Harrison
Iron Company, Birmingham and St. Louis; Chattanooga
Foundry & Pipe Works, Chattanooga and New Orleans;
South Pittsburg Pipe Works, Omaha; Dennis Long & Co.,
Louisville and certain cities in Indiana ; while Addyston Pipe
& Steel Co. was to supply Cincinnati and certain other cities
in Ohio and Kentucky. Petitioner does not pretend to give
all the cities allotted under said criminal agreement.

Petitioner charges that when an inquiry was received by
defendants for work in any of the " reserved cities " they, of
course, knowing which of defendants was to have the job,
would at once ask the defendant to whom the city was al-
lotted what price to " protect," as it was called, meaning
thereby to ask said shop to notify it what its bid would be, so
that a higher bid might be sent in. On receipt of such an
inquiry the defendant that was to do the work would at once
notify all the other defendants the price it intended to bid, or
at which it wanted " protection," and the other defendants
would each send in a bid at some higher figures, insuring the
job to the defendant agreed upon, and insuring to themselves



BILLS IN SPECIAL CASES. 553

a division of a large " bonus " and making the price to the
consumer unfair and unreasonable, and destroying all competi-
tion in regard thereto.

Ninth. Petitioner further shows and charges that the kinds
of contracts secured by defendants are, in the main, contracts
to furnish pipe to gas and water companies, and to municipal
corporations for sewerage and other purposes, which said
contracts, after advertisements for bids, are let to the lowest
bidders. Petitioner would show to the court that said gas
and water companies and said municipal corporations, together
with the public generally, being entirely ignorant of the
fraudulent and unlawful manner by which defendants make
their bids and secure said contracts, and having been so ig-
norant since said combination was entered into, and having no
knowledge of such combination, have been applying in good
faith to each of defendants to furnish a bid at which it would
do certain work, and since said date of Dec. 28th, 1894, said
defendants have been fraudulently and criminally securing
about the entire work in the territory named, and .at the ex-
orbitant and unreasonable prices above mentioned.

Tenth. Petitioner charges upon information it believes to
be true, that there are no other pipe works in the territory
where the conspiracy exists between defendants, that were able
to handle the large contracts for pipe which defendants have
secured since the combination existed, by reason of the want
of capacity and money to carry on said work on the part of
such shops not in the combination.

Petitioner further shows and charges that defendants have
large sums of money, aggregating many millions of dollars,
invested in the manufacture of pipe, and are able, many of
them alone, to fill contracts of any size, and in fact have fur-
nished pipe where the job amounted to over one hundred
thousand dollars, and by reason of the fraudulent and unlaw-
ful manner in which they secured the contract, have divided
a " bonus " of not less than seven dollars on each ton of pipe



654 SUITS IN EQUITY.

furnished in said large contracts, so petitioner charges that
by reason of the great wealth of defendants, and the inability
of any and all others engaged in manufacturing pipe in the
territory above named, and by reason of the unlawful means
resorted to by defendants, they have created a monopoly in
the sale of cast iron pipe in said territory and have crippled
and destroyed all smaller concerns engaged in the manufacture
of pipe.

Eleventh, Petitioner would further show to the court, and
charge that defendants, on or about the 2/th day of May,
1895, to enable them to realize greater profits to themselves
on the sale of their pipe, and to make the monopoly in their
territory on the use and sale of the same, more complete, and
to more fully effectuate the conspiracy entered into on said
28th day of December, 1894, adopted what they called the
" Auction Pool " plan for bidding on work in. the " pay terri-
tory." To carry this out, each of defendants selected one
man, and the six men selected constituted an executive com-
mittee, w,hich said committee was to be located in
some central city, at present at Chicago, to whom all inquiries
for pipe were to be referred. On receipt of such inquiry, this
committee, in a room with no one present but themselves, se-
cretly and fraudulently bid for the job, the one agreeing to pay
the greatest amount of " bonus " of course to receive it. By
this secret, and fraudulent and criminal manner, petitioner
charges all the work done by defendants since June I, 1895,
has been secured. After this " auction pool " was over, as to
each particular job, each of the defendants was notified whose
representative had bid the most, and the amount of the bid,
and this bid was sent by the defendant securing the job at the
" auction pool " to the party wanting the pipe, the other de-
fendants all sending in a bid for a higher price, carrying out
their criminal agreement to " protect " each other, and secur-
ing the job to the highest bidder at the " auction pool," thus
reversing the order of things, by giving the job to the highest,



BILLS IN SPECIAL CASES. 655

instead of the lowest bidder, the deluded customer of course
being ignorant as to the manner in which he is being swindled.
Twelfth. As an example of the unequaled and unmitigated
criminal conduct on the part of defendants, and the great
amounts of money they have swindled the public out of, by
reason of their trust and criminal conspiracy, petitioner will
give one instance, among the many hundred, which it charges
to be true in every particular : The municipal corporation of
the city of St. Louis, Mo., wanted about 5,000 tons of cast
iron pipe during the early part of the present year of 1896.
Under the " auction pool " system, as petitioner is informed
and believes, and so charges, the "reserved cities," hereinbefore
mentioned were left practically the same as under the fixed
" bonus " system, there being a different arrangement agreed
upon as to the " bonus," in some way, but the pipe for the
particular cities named to be supplied as originally agreed
upon. Under the agreement, the pipe for the city of St.
Louis was still to be furnished by defendants, Hoard-Harrison
Iron Company. Allowing a reasonable and fair profit, the
price of the pipe wanted by St. Louis was at that time, at the
shops at Bessemer, Ala., from $13 to $15 per ton. The
freight to St. Louis from Bessemer was $3 per ton, so that de-
fendant, Howard-Harrison Iron Company, could afford to sell
said 5,000 tons of pipe delivered in St. Louis at from $16 to
$18 per ton. The city of St. Louis made inquiry of defend-
ants for the pipe, and requested them to send in bids for the
work, and when said inquiries were received by defendants
they were at once forwarded to the " auction pool " for the
mysterious action of the executive committee aforesaid, acting
for defendants. The character of the bidding at this " auction
pool," and behind closed doors, is not known to petitioner, and
whether the same was free, fair (?) and open, and very
animated, and whether each defendant, as represented by its
member of said executive committee, was taking care of itself,
or whether all were bent and united on swindling the city of



656 SUITS IN EQUITY.

St. Louis to their common profit, may never be known; but
one thing is certain, and petitioner so charges, defendant,
Howard-Harrison Iron Company was the highest bidder at
the " auction pool " and the job was knocked down to it at
the price of $24 per ton, and thereupon it sent in its bid at
this price. All the other defendants sent in bids of " protec-
tion " at a higher figure. Petitioner further charges that
when the bids were received by the city of St. Louis, they were
opened and compared, in good faith, by a committee that rep-
resented the people of the city of St. Louis, and who were
anxious to procure the pipe for this large contract at as low
price as possible; and petitioner charges that said city of St.
Louis was utterly ignorant as to the conspiracy between de-
fendants and is ignorant of the fraudulent and corrupt means
adopted by them, whereby all competition in bidding for the
job had been destroyed, and ignorant of the complete monop-
oly that defendants had brought about in the territory above
named, which said monopoly petitioner charges was so com-
plete and brought about by the means aforesaid, as to prevent
other persons and corporations from engaging in fair com-
petition with them in the sale of said cast iron pipe, and insured
to defendants almost the exclusive right of dealing in the
same, and appropriating to themselves said exclusive privilege,
and restricting and restraining others in the exercise of the
right that was open to them before this criminal conspiracy
and unlawful and unauthorized trust was entered into be-
tween defendants. So that the contract was awarded to de-
fendant Howard-Harrison Iron Company at the price of $24
per ton delivered in the city of St. Louis. Petitioner charges
that a fair and reasonable price for this pipe was only $16 to
$18 per ton at that time, and in fact defendants were selling the
same at this price in " free territory," where they had com-
petition, and where that conspiracy did not exist, on the iden-
tical date at which the sale was made to the city of St. Louis.
Petitioner shows to the court and charges that the extor-



BILLS IN SPECIAL CASES. 657

tion in this single contract, and the profit realized to defend-
ants in the shape of " bonus," which was divided between
them, amounted to between $30,000 and $40,000, and this is
only one contract among the hundred which petitioner charges
were secured in the same way. Petitioner charges that the
pipe for this contract was shipped from Bessemer in the state
of Alabama to St. Louis in the state of Missouri, and de-
fendants are now severally engaged in shipping pipe to other
states than the states in which they reside under and in pur-
suance of the conspiracy aforesaid.

Thirteenth. Petitioner charges upon information that it be-
lieves to be true, that the defendants, Howard-Harrison Iron
Company, Anniston Pipe & Foundry Company, South Pitts-
burg Pipe Works, and Chattanooga Foundry & Pipe Works,
some time prior to December 28, 1894, had entered into a
contract or combination in the form of a trust or conspiracy in
restraint of trade and commerce between the several states,
which was similar in terms to the conspiracy entered into on
said 28th day of December, 1894, and the four defendants
last named had been operating under the same prior to that
date, but in order to make their monopoly complete the two
other defendants were admitted to the trust on said 28th day
of December, 1894, and the purpose of admitting them was to
destroy all competition between them and insure a complete
monopoly in the sale of pipe, and all of defendants herein are
now operating under said trust.

Fourteenth. Petitioner charges that the contract, combina-
tion, trust or conspiracy aforesaid, under which defendants
are now operating is in restraint of trade and commerce be-
tween and among the several states and has resulted in a
monopoly to them in the manufacture and sale of cast iron
pipe in the territory named ; is an unlawful combination, trust
and conspiracy, and in open violation of the Act of Congress
of July 2, 1890, and petitioner brings this suit to restrain
the violation hereinbefore set forth and prevent defendants



SUITS IN EQUITY.

from continuing the sale and transportation of said cast iron
pipe from the states in which they reside into other states and
for the purposes of having any of said cast iron pipe, belong-
ing to either of said defendants and being in course of trans-
portation by them or either of them from one state to another,
forfeited to petitioner and seized and confiscated as provided
by law.

Fifteenth. Petitioner further charges that inasmuch as the
conspiracy aforesaid was entered into in this division and dis-
trict of your honor's court and defendants are all parties to
the same, that the ends of justice require that they each be
brought before the court in answer to this petition.

Wherefore your petitioner prays:

First. That it be allowed to file this petition, and upon the
filing of the same, that under the fiat of your honor an in-
junction or restraining order be granted enjoining and re-
straining defendants or either of them from selling and trans-
porting cast iron pipe into other than the states in. which
they reside under any contract or agreement, entered into
with citizens of such other states, by virtue of the combination,
trust or conspiracy now existing between the defendants.

Second. That each of the defendants be made parties hereto,
by subpoena directed to the marshal of the district where they
reside, accompanied with a copy of such injunction or re-
straining order as your honor may grant.

Third. That defendants be required to answer this petition
fully but not on oath, as their answers under oath are waived.

Fourth. That all cast iron pipe sold and transported by de-
fendants after this date, under and in pursuance of the com-
bination, trust and conspiracy, charged in this petition, to any
other state than the state in which the defendant so selling and
transporting said cast iron pipe resides, be forfeited to your
petitioner, and seized and confiscated in the manner provided
by law.

Fifth. And upon the hearing let a decree pass dissolving



BILLS IN SPECIAL CASES. 659

the trust, combination and unlawful conspiracy now existing
between defendants and perpetually enjoining them from
operating under the same and from selling and transporting
said cast-iron pipe into other states than in which they reside.
Petitioner prays for general relief, and states that this is
the first application for extraordinary process in this cause.

J. H.,
U. S. Attorney for the District of .

State of ,



County.



J. H. makes oath that the facts stated in the foregoing
petition as of his own knowledge are true, and those stated
on information he believes to be true, and that he brings this
petition under the direction of the Hon. Judson Harmon,
attorney general of the United States. J. H.

Sworn to and subscribed before me this - - day of - ,

A. D. . F. X.,

[Seal.] Notary Public.

(1) Taken from the record in Addyston Pipe & Steel Co. v. U. S.
IT'S, U. S. 211.

Cases decided under the Sherman Anti-Trust Law, or relating thereto
(Act of July 2, 1890, 26 Stat. at L. 209), are collected in four volumes,
covering the period 1890 to 1912, compiled by the United States De-
partment of Justice, under the title, "Federal Anti-Trust Decisions."

The Sherman Anti-Trust Act was thoroughly considered and its pur-
poses restated and the rules of construction clarified and affirmed in
Standard Oil Co. v. U. S., 221 U. S. 1', and U. S. v. American Tobacco
Co., 221 U. S. 106, in which the court took the view that the Act should