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United States V. E. C. Knight Co

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United States v. E. C. Knight Co

2. Facts of the Case

The Appellee-Defendants, E.C. Knight Co., American and other sugar refineries (Defendants), entered into contracts to purchase four refineries in Philadelphia, thereby controlling almost the entire refined sugar manufacture in the United States. The government alleged that by entering into the contracts, the Defendants combined and conspired to restrain the trade and commerce in refined sugar among the several states and with foreign nations, contrary to an act of Congress promulgated on July 2, 1890.

3. Issues

Does the act of Congress overstep the authority given by the Commerce Clause?

4. Decisions (Holdings)

Yes. Appeals court judgment affirmed. The majority draws a distinction between the manufacture of a good and its final disposition. The Supreme Court of the United States (Supreme Court) also says that a good's use in commerce is only incidental to its manufacture, and as such, the act overreached the power of Congress under the Commerce Clause.

5. Reasoning (Rationale)

Fuller: Within this act of Congress on July 2, 1890 it is decreed that is it unlawful to restrain trade of commerce between states and nations, and any person who attempts to monopolize trade or commerce will be prosecuted and punished. This monopolization is defined as "exclusive control, by authority, of one branch of industry without legal right of any other person to interfere therewith by competition" and it also includes having control of the market of a particular kind of merchandise (or a large amount of it) that restrains trade or commerce.

The defendants in this case have gained the power to control the manufacturing of refined sugar, and this is a "monopoly over necessary of life". Commerce does come after the manufacturing of goods, but it is not a part of the manufacturing of refined sugar. The product is being manufactured for export to others states but this does not make the issue interstate commerce. In Kidd v. Pearson it is expressed that "manufacture is transformation, -the fashioning of raw materials into a change of form for use. The functions of commerce are different;.

In controlling the manufacturing of a particular product and indirect result might be the restraint of trade, but it is an indirect result. The defendants acquired companies in Philadelphia to refine sugar and had no direct relation to commerce or trade between states or nations, therefore, they did not engage in unlawful acts as expressed in the July 2, 1890 bill from Congress.

6. Separate Opinions

The argument is that the power to control the manufacture of



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