Full opinion text
JULIUS J. HOFFMAN, District Judge. The petitioners, defendants in this historic litigation, have sought modification of the antitrust decree entered with their consent forty years ago. The government has vigorously opposed the petitions. Following extensive discovery proceedings and the disposition of preliminary motions, the parties were afforded the plenary hearing required upon such a petition. Hughes v. United States, 1942, 342 U.S. 353, 72 S.Ct. 306, 96 L.Ed. 394. Oral testimony occupied some three and one-half months, producing a transcript in excess of eight thousand pages. Nearly one thousand exhibits have been received, containing an even greater volume of pages. As the record indicates, the court had grave doubt of the admissibility of portions of the petitioners’ evidence, both oral and documentary. Much of it was remote and of tenuous relevancy, or entailed matters of general opinion. It was the position of the court, however, throughout the lengthy hearing, that the equitable nature of the proceeding warranted giving the petitioners every opportunity to support their request. The court has been aided by detailed and exhaustive briefs, running to another thousand pages, and by full oral presentation of the parties’ positions. The court also has before it the complete record of the prior proceedings in the case. The quality of representation on all sides has been exceptional. The Original Decree. The antitrust history of the defendants goes back to the turn of the century. In 1902 the government filed a civil suit against the defendants which eventuated in a general injunction. Swift & Co. v. United States, 1905, 196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518. Subsequent criminal prosecutions failed. In 1917, at the direction of President Wilson, the Federal Trade Commission commenced a broad investigation of the meat packing industry. The report of this investigation, submitted in 1919, led to the commencement of the litigation in which this proceeding constitutes the latest chapter. The Parties. The suit was begun on February 27, 1920, in what was then called the Supreme Court of the District of Columbia. The principal defendants were the so-called Big Five of the meat packing industry: Swift & Company, Armour and Company, The Cudahy Packing Company, Wilson & Co., Inc., and Morris & Company. Eighty other corporations, comprising those subsidiaries of the principal defendants which were engaged in slaughtering, packing, or selling meats, were also joined as defendants. Fifty of the officers, directors, and stockholders of the corporate defendants were named and joined individually as defendants. Of these one hundred and thirty-five original defendants, only six are now before the court as petitioners. One of the five principal defendants, Morris & Company, was absorbed by Armour and Company in 1923. Another, Wilson & Co., Inc., has not petitioned for modification or entered its appearance in this proceeding. The remaining three principal defendants, appearing here as petitioners, will be called Swift, Armour, and Cudahy. All of their subsidiaries which were joined as parties originally have since been dissolved with the exception of two Swift subsidiaries, Swift and Company, Inc., and Derby Foods, Inc., which will be included in the designation Swift. The sole survivor of the officers, directors, and stockholders of these corporate defendants who had been joined individually as parties who has petitioned here is E. A. Cudahy, Jr. The petitioners are, therefore, Swift, including its two subsidiaries, Armour, Cudahy, and E. A. Cudahy, Jr. The Complaint. The equity bill which commenced this suit consists of some thirty pages. The stated object of the action was to put an end to monopolies achieved by the defendants affecting the food supply of the nation, and to prevent the extension of this domination into other fields. The defendants’ principal business, it was alleged, consisted of the purchase and slaughter of livestock, namely, cattle, hogs, sheep, and calves, the dressing of the carcasses, and the distribution and sale of the dressed meats. Domination of the purchase of livestock, it was charged, had been achieved, pursuant to a common purpose, plan, and design, by various means. First, the complaint recited, the defendants had acquired controlling interests in some twenty-two of the nation’s stockyards, the public markets where livestock were bought and sold. Through the fees, charges, and services of the yards, they thereby gained power over the throat of the commerce involved. Through their interests in these yards, the defendants were also able to determine the number and location of packing plants in the desirable locations at and adjacent to the stockyards. Terminal railways, connecting the long-haul roads with the stockyards and the packing plants, had also fallen under the domination of the defendants according to the bill, giving them power to discriminate against other packers and independent buyers. Dominion over the other facilities required by traders and dealers at the yards was also achieved. Included was the allocation of office space, pens, and sites for stockyard banks, cattle loan companies, and rendering plants for the disposal of stock killed by accident or disease in the yards. According to the allegations of the government’s •complaint, the defendants had also gained control of the trade newspapers and market journals which cattle raisers must rely upon for accurate and unbiased reporting of demand. As a consequence, ■the defendants were furnished with a means of increasing or decreasing the flow of livestock to the yards in their own interests. By wielding these powers, it was charged, the defendants had gradually forced out their competitors as dominating factors in the marketing of livestock. To eliminate competition among themselves, the government claimed, the defendants had entered into percentage purchase arrangements, apportioning the livestock offered at the several stockyards to the respective defendants in predetermined shares. 'Concerning the marketing side of the defendants’ businesses, the complaint alleged that the packers had developed a nationwide system for distributing and selling meats. A principal instrumentality in the system was called the branch house, a storage station with facilities for cooling and preserving fresh meats, from which sales were made to butchers, hotels, restaurants and other large consumers. The defendants maintained 1120 of these branch houses in various large towns and cities throughout the United States, according to the bill, while competing interstate slaughterers maintained only 139. To supplement the branch houses, and to serve the smaller communities, the defendants employed refrigerated railroad cars traveling over specified routes and filling orders for smaller quantities. The route cars operated by the defendants, it was alleged, constituted 90% of the total number operated in the packing industry. As an adjunct, the defendants, and particularly Armour, employed motor trucks to serve purchasers not conveniently reached by rail, in a total of 20,836 towns throughout the United States. As a part of their distribution system, it was stated, the defendant packers owned for their private use a number of cold storage warehouses where fresh meat products might be stored, and had acquired control as well of public cold storage warehouses engaged in the general business of leasing space for products requiring refrigeration. Having eliminated competition in meats, the defendants, according to the government, set out to control the substitute foods to which the consuming public might turn from high-priced meats. To accomplish this purpose, the defendants had begun to deal, directly and through subsidiaries, in fish, vegetables, fruits, cereals, milk, poultry, butter, eggs, cheese, and other so-called substitute foods as well as in meats. In addition, they acquired a large number of concerns manufacturing or selling these substitute foods, availing themselves of the financial resources amassed through their dominance in meats. Further control over other foods was achieved, it was alleged, through contracts for the defendants’ purchase of the entire or exclusive output of many companies engaged in the production of these foods. In marketing these non-meat foods, the defendants availed themselves of their distribution systems and facilities designed principally for the handling of meats “with comparatively no increase of overhead.” This advantage enabled the defendants to reach remote spots, it was alleged, and was employed temporarily to fix prices so low as to eliminate competition. As the result of these activities, the complaint averred, the defendants had enjoyed an extraordinary rate of growth and had achieved immense size. In the fifteen years from 1904 to 1919, the combined net worth of Swift, Armour, Cud-ahy and Wilson had increased fivefold to nearly half a billion dollars. The net profits of the five principal defendants for the year 1917 nearly equalled their total net worth in 1904. Their combined sales amounted to three billion two hundred million dollars for 1918. The principal corporate defendants and the individual defendants and their families held controlling interests in 574 corporations and concerns, and lesser or indefinite interests in another 188. In its concluding paragraphs, the government’s bill of complaint prayed generally for an injunction prohibiting the defendants from entering into or earry-ingout any contract or combination in restraint of trade, from monopolizing or attempting to monopolize commerce in livestock or foods, and from engaging in unlawful practices or unfair competition to restrain or monopolize trade or commerce. Specifically, the complaint requested a decree requiring the defendants to divest themselves of the instru-mentalities of monopoly in meats, including retail meat markets, stockyards, terminal railways, market or trade journals, and public cold storage warehouses. In the field of substitute foods, so-called, the government demanded that the defendants divest themselves of all interests in concerns dealing in such foods, and discontinuue direct dealings. To assure this divestiture, the government asked that the decree enjoin the defendants from re-acquiring any interests so divested, from obtaining any new interest in any concern dealing in prohibited substitute foods, and from engaging themselves in any dealings in these foods. To complete the divorcement of meats' from substitute foods, the bill demanded that the defendants be enjoined from permitting their railroad cars, motor-trucks, branch houses, or other distributive facilities to be used by anyone in the handling of prohibited commodities. The Decree. On the same day that the government filed its complaint with the court, a separate answer was filed on behalf of each of the five principal defendants and its corporate subsidiaries and affiliated individual defendants. These answers responded in extensive and minute detail to all the averments of the government’s bill, and denied each material allegation. At the same time, the parties presented to the court a stipulation, agreeing to the entry of an attached decree of injunction. On behalf of the defendants, the stipulation stated that while maintaining the truth of their answers and their innocence of any violation, they desired “to avoid every appearance of placing themselves in a position of antagonism to the Government” and therefore consented, with the proviso that their consent should not be regarded as an admission, nor the decree as an adjudication, that they had in fact violated any law of the United States. The stipulated decree was entered that day. Its recital of the parties’ consent was followed by eighteen operative paragraphs. Summarized in numerical order, these paragraphs decreed as follows: First. The corporate defendants were enjoined, jointly and severally, from contracting, combining, or conspiring to restrain, and from monopolizing, or attempting or conspiring to monopolize, trade or commerce; Second. The defendants, jointly and severally, were restrained from owning any interest in any stockyard, terminal railroad, or market newspaper or journal; Third. The corporate defendants were enjoined from using or permitting others to use their distributive system and facilities, including branch houses, railroad cars, and motor trucks, for handling or dealing in the non-meat foods specified in paragraph Fourth; the defendants were permitted to dispose of surplus or obsolete facilities free of the restrictions of the decree, subject to a requirement of court approval for sale of any substantial part of the system; Fourth. The corporate defendants, jointly and severally, were enjoined from engaging in the business of handling, and from owning any interest in a concern engaged in handling, fourteen specified classes of foods and miscellaneous items, illustrated by a listing of 145 named commodities; the enumerated classes were (1) fish, (2) vegetables, except in combination with meats, (3) fruits, (4) confectionery and soda fountain supplies, (5) molasses, jellies, and similar sweets, (6) spices, sauces, and condiments, (7) coffee, tea, chocolate and cocoa, (8) nuts, excluding peanuts, (9) flour, sugar, and rice, (10) bread, wafers, crackers, and biscuits, (11) cereals, (12) grain, (13) miscellaneous articles, including specified building materials, food-handling equipment and supplies, and cigars, china, and furniture, and (14) grape juice; Fifth. The individual defendants were enjoined from holding a controlling interest in any concern handling or dealing in the commodities listed in paragraph Fourth; Sixth. The defendants were restrained from owning or conducting any retail meat markets, other than for the accommodation of employees at their plants; Seventh. The defendants were enjoined from owning any interest in public cold storage warehouses except in connection with their packing plants or as necessary in handling meats and other permitted commodities; Eighth. The corporate defendants were enjoined from handling or dealing in fresh milk or cream, and from owning any interest in any concern so engaged, except as necessary to their dealing in condensed, evaporated, or powdered milk, butter, oleomargarine, ice cream, cheese, or buttermilk, or in combination with meats or other permitted items; Ninth. The corporate defendants were enjoined from engaging in illegal trade practices; Tenth. The defendants were directed to submit to the court, within 90 days, a plan for divesting themselves of ownership in stockyards, terminal railroads, and market newspapers and journals, and to dispose of these interests within the time and upon terms fixed by the court; Eleventh. The defendants were directed, within nine months and with court approval, to divest themselves and dispose of their interests in retail meat markets and public cold storage warehouses ; Twelfth. The defendants were directed, within two years and with court approval, to divest themselves of all interest in concerns engaged in handling the prohibited items enumerated in paragraph Fourth, to divorce or discontinue any branches or departments so engaged, and to dispose of all such commodities in stock or on hand; Thirteenth. In the disposition of their interests in any stockyard at which they maintained packing plants, the defendants and their purchasers were required to agree to continue the operation of the stockyard and the packing plants, respectively, for a period of ten years. Fourteenth. Nothing in the decree should be construed to prohibit the defendants from doing anything, otherwise lawful, in the United States in connection with their export trade or foreign commerce; Fifteenth. Nothing in the decree should be construed to preclude the government from proceeding, civilly or criminally, against the defendants for any violation of lav/ in the buying or selling of poultry, butter, eggs, or cheese, or any other business or activity not mentioned in the decree; Sixteenth. The defendants were directed to supply information upon the request of the Attorney General and to permit inspection of their books and records, for the purpose of assuring compliance with the decree; Seventeenth. All the defendants’ sales or dispositions of properties or businesses which had been made within the five months preceding the entry of the decree and which otherwise would have been required by the decree were to be submitted to the court for determination of whether they were in accordance with the spirit and purpose of the decree; Eighteenth. The court retained jurisdiction to take any further action that might be necessary to carry out the decree and to entertain any applications by the parties with respect to it. It is apparent that the decree was the product, in principal part, of negotiation between the defendants and the government. Within a single day the government filed its complaint, the defendants appeared and filed lengthy answers, the parties presented their stipulation and consent to a detailed and complex decree, and the decree was entered. The circumstances precluded extensive judicial consideration or analysis. No evidence was offered, no findings of fact were made, and no opinion was prepared to explain the decree. In large part, the decree was responsive to the government’s complaint. As demanded in its prayer, the defendants were required to divest themselves of their interests in stockyards, terminal railways, market newspapers and journals, public cold storage warehouses, and retail meat markets. They were also required to divest themselves of the business of handling certain of the items described by the complaint as substitute foods, although in this respect the decree does not extend to the full limits of the complaint. The government had charged the defendants specifically with seeking to control fish, vegetables, fruits, cereals, milk, poultry, butter, eggs, and cheese; the decree as entered reached only the first five of these commodities, and left the defendants free to engage in the business of handling poultry, butter, eggs, and cheese, along with a miscellany of non-meat foods not prohibited by the decree and a wide range of non-food commodities. The core of the defendants’ business activities remained untouched. They were left free to engage in meat packing, including slaughter, dressing and processing, and distributing at wholesale, without hindrance. In this field, their corporate empires were not dismembered, and they retained their huge size. The decree confined their power, however, and prevented its exercise or extension in the meat industry either backward in the direction of livestock marketing, or forward in the direction of retail marketing. What is known as vertical integration was foreclosed thereby to a significant degree. Although short of monopolization the defendants were free to expand their operations horizontally, as meat packers, they were excluded, for all practical purposes, from participating generally in the food industry. Their economic power was thus not destroyed but rather hemmed in. Subsequent Proceedings. With the entry of the consent decree, this litigation entered its second phase. In 1921, the National Wholesale Grocers Association and the American Wholesale Grocers Association were permitted to intervene in the proceedings for the limited purpose of receiving notice and being heard in opposition to any proposed change in the decree that would deprive them of its protections. On April 19, 1922, the California Cooperative Canneries filed an intervening petition, seeking to invalidate the consent decree in its entirety. It appeared that this in-tervenor had agreed with Armour to supply Armour’s total requirements of California canned fruits for a ten year period, and had committed the principal part of its output to this contract. The petition claimed the consent decree was void on several grounds. The defendants’ refusal to admit any violation of law, it was argued, deprived the court of power to enter the decree. Since the complaint did not charge that it was illegal for the defendants to engage in the grocery business, that portion of the decree, at least, could not be supported, it was claimed. The intervenor contended, too, that the decree was so general as to be a nullity, and that it was superseded by the Packers and Stockyards Act of August 15, 1921, 42 Stat. 159, 163, 7 U.S.C.A. § 181 et seq. The motion for leave to intervene was denied in the trial court, but the Court of Appeals for the District of Columbia reversed the denial in September, 1924. (California Cooperative Canneries v. United States, 1924, 55 App. D.C. 36, 299 F. 908). In November, 1924, motions were presented on behalf of Swift and Armour, their subsidiaries and officers, to invalidate the consent decree on similar grounds, and more particularly, because no case or controversy was before the court, because no facts were found to support the court’s jurisdiction, because the decree violated the antitrust laws by forbidding lawful competition, and because the Attorney General was without power to consent to the decree on behalf of the United States. These motions were argued together. The trial court denied the motion to vacate the decree presented on behalf of Swift and Armour, but by order of May 1, 1925, suspended the operation of the decree, in pursuance of the Court of Appeals’ mandate, until the intervening petition of California Cooperative Canneries could be fully heard on the merits. Upon appeal from the denial of the Swift and Armour motions, the United States Supreme Court affirmed, upholding the validity of the decree. Swift & Co. v. United States, 1928, 276 U.S. 311, 48 S.Ct. 311, 72 L.Ed. 587. The suspension, however, remained in force until set aside a year later by the Supreme Court in United States v. California Cooperative Canneries, 1929, 279 U.S. 553, 49 S.Ct. 423, 73 L.Ed. 838. Upon receipt of the mandate of the United States Supreme Court, the trial court on July 24, 1929, revoked the suspension of the decree. On the same day, however, Swift and Armour filed motions to extend the time for compliance with the decree, and the court granted a temporary extension for all defendants until the motions could be fully heard. Before these motions came on for hearing, however, and on August 10, 1929, they were superseded by petitions on behalf of Swift and Armour to modify the decree and to vacate its principal prohibitions. The petitions for modification, as amended on April 2, 1930, accepted the consent decree as valid and lawful when entered. This request for relief from its prohibitions was based therefore not upon any asserted defect in the original proceedings, but rather, upon the claim that the decree had become, in the ten years since its entry, unnecessary and unjust in view of “radical and revolutionary changes” in economic conditions. These changes, it was claimed, were both unexpected and unforeseen, and worked a revolution in food distribution methods. Because the petitions now before the court proceed upon the same underlying theory, the 1930 petitions warrant full examination for comparative purposes. Although these petitions of Swift and Armour vary in their detail, both are based upon two major propositions: First, that the defendants no longer occupied the monopolistic position in the meat packing industry which they held at the time the decree was entered in 1920; and Second, that economic changes since 1920 had eliminated any danger that the defendants might employ any dominance in the meat industry as a weapon to achieve control in the marketing of non-meat foods and other commodities. It followed, they argued, that the decree without reason or need restrained lawful competition by prohibiting the defendants from making efficient use of their facilities and experience and from diversifying their businesses as their rivals were free to do, to the injury of the general public as well as the defendants. In support of the first branch of their argument, the petitions alleged that any combination among the defendants had been dissolved, that they were parties to no agreements in restraint of trade, and that they were engaged in active and open competition with each other. The defendants themselves had undergone changes since the decree. The Armour stock, formerly held by the Armour family, had been dispersed and was publicly held. Armour had been refinanced, and Wilson & Co., Inc., had gone through receivership and bankruptcy proceedings as well as refinancing. Morris & Company had sold its assets to Armour and had gone out of business. Several subsidiary corporations had been dissolved, and a number of the individual defendants had either died or severed their connections with the defendants since the entry of the decree. All of the defendants, it was claimed, had suffered losses and declining sales volume in the decade of the twenties. Several legal developments were also relied upon in support of the requested modification. The government’s legal theory, embodied in the decree, was said to be that size alone constituted an offense under the Sherman Act, 15 U.S. C.A. §§ 1-7; 15 note, and this theory, the defendants argued, had been rejected in United States v. United States Steel Corp., 1920, 251 U.S. 417, 450-451, 40 S.Ct. 293, 64 L.Ed. 343, after the entry of the decree by the Supreme Court. By the enactment of the Packers and Stockyards Act of August 15, 1921, 42 Stat. 159, 163, Congress had conferred regulatory control over the packing industry and public stockyards upon the Secretary of Agriculture, thereby rendering the judicial decree totally unnecessary according to the petitions. The petitions also recited that the court had appointed two trustees of the stock held by Swift and Armour in public stockyard companies, pursuant to the provisions of the decree directing disposal of this stock, and that after full and lengthy public hearings at the stockyards these impartial trustees had found nothing unfair, illegal, or discriminatory in the operation of the stockyards, terminal railroads, or other facilities. Since the entry of the decree, the petitions reported, the Department of Agriculture had undertaken a program of livestock market reporting which made precise information readily available by wire and radio to livestock producers throughout the country, and destroyed any monopolistic control the defendants might have exerted through ownership of stockyard newspapers and market journals. In 1921, the defendants averred, the Interstate Commerce Commission, in a hearing upon the complaint of wholesale grocers, concluded that the defendants’ ownership and use of refrigerator cars gave them no unfair advantage or preference. (National Wholesale Grocers Ass’n v. Alabama & Vicksburg Ry., 62 I.C.Reports 375, June 22, 1921). Finally, the defendants relied upon the decision of the Secretary of Agriculture in proceedings commenced by him in 1923 to inquire into the Armour acquisition of the physical properties of Morris & Company. After exhaustive hearings under the Packers and Stockyards Act, the Secretary had concluded that the merger would not have the tendency or effect of restraining interstate commerce or of creating a monopoly, and that competition in the meat industry was keen and active. Factual change as well as legal development showed, according to the petitions, that the defendants no longer occupied a dominant position in the meat industry. None of the defendants individually enjoyed a share of the business that would amount to monopoly, and their combined share of the total slaughter of livestock in the United States had fallen since the decree from 48% to 36%, and their combined share of federally inspected slaughter fell from 69% to 54%. The total sales of each of the defendants, measured in dollars, were lower in 1929 than in 1920, while the sales of competing meat packers increased. At the same time the defendants’ margin of profit on sales was low and declining, while the profit margin of the smaller packers was greater and increasing. The defendants’ distributive facilities no longer served to give them a commanding competitive position in the meat industry, they alleged. The refrigerated railroad cars owned by the defendants conferred no advantage, since the development of motor trucks and the construction of hard-surfaced roads during the ten years since entry of the decree had provided competing packers with an effective means to reach consumers. The branch house system of the defendants was being rendered obsolete, according to the defendants, by the trend toward integration and mass selling. Since the decree, grocery chains had established their own distributing depots, taking large shipments directly from packing plants. As a result, the defendants were forced to use their branch houses principally to serve the small independent retailer, in decreased volume and at higher cost per unit sold. In consequence, the defendants had been forced to close a number of branch houses, and to operate others at a loss. In the second branch of the defendants’ petitions for modification, they claimed that any dominance they might still enjoy in the meat industry could no longer be carried over into the marketing of other foods, in view of the claimed revolution in merchandising methods. This revolution was characterized principally, according to the petitions, by widespread integration in the food business, by mass selling, by the growth in use and importance of private brands, and by wide diversification of products handled at each market level. At each level, it was claimed, large and powerful concerns had emerged, offering a countervailing power to the defendants and eliminating any danger from the defendants’ entry into other branches of the food industry. Retailing. At the retail level, the petitions relied upon the rapid growth of the chains to demonstrate that the decree was no longer needed. Since 1920, they alleged, the number of chain retail outlets had increased from 27,000 to 75,000, and their total sales had nearly trebled until they held 40% of the total retail grocery business. The largest of these chains, A & P, had total sales in excess of one billion dollars in 1929, roughly equalling the total sales of the largest defendant, and the total sales of all chains were said to have grown to approximately three and one-half billion dollars annually. A parallel development since the entry of the decree was the growth of the so-called voluntary chains, established either by a grocery wholesaler contracting with a number of independent retailers to supply their grocery needs and to furnish merchandising and managerial assistance, or by a group of independent retailers associated together to conduct cooperative wholesale operations. The number of retail stores so integrated and combined had grown to 60,000 by 1929, according to the petitions. In view of the strength of these retailers, it was said, there was no longer anything to be feared from the defendants’ entry into the grocery business as competing retailers. The chains generally enjoyed a higher margin of profit than the defendants, it was claimed: comparing five selected chains with the defendants, profits as a percentage of sales were 2.7% for the chains to 1.3% for the defendants, as a percentage of net worth, 23% for the chains to 5% for the defendants, and as a percentage of investment, 17% for the chains to less than 5% for the defendants. At the same time the chains benefited from a higher proportion of equity investment, relying upon borrowing for only 2% of their funds as compared with the 30% borrowed by the defendants, and enjoyed more available working capital. Another marketing change alleged by the petitions was the rapidly accelerating trend toward combination stores, that is, stores selling both meats and groceries. At the time of the entry of the decree in 1920, it was claimed, only a few hundred retail outlets handled both meats and groceries, while by 1929 an estimated 20% of all meat sales were made by combination stores. The trend was especially rapid among chains, which had begun to sell meats, it was alleged, in an estimated one-third of their stores. These developments rendered the prohibitions against the defendants’ retailing meats both unnecessary and unjust, it was said. In view of the combined power of the chains as meat retailers, the defendants could no longer assume control of that market and the protection of the decree was not needed. And the decree was rendered unjust since this integration reduced the number of potential buyers for the defendants’ meat and left them at the mercy of the large chains, who might simply decline to deal and leave the defendants stranded with a large supply of perishable meats. Deprived of the opportunity to retail their own products, the defendants were placed increasingly at the mercy of the chains as the only outlet to the consumer. Competing packers, however, were free to retail their products, and many operated meat markets. The defendants also claimed they were handicapped by the innovation of the private brand, affixed by the chain or the retailer to the products sold. To assure continued consumer demand for and acceptance of his products, they contended, a national packer must keep its brand name before the public. Forbidden to retail their own products and compelled to market through others who affixed their own brands, the defendants were losing their standing. In the face of the trend toward diversified retailing and the combined selling of meats, the defendants claimed that modification of the decree to allow them to sell at retail only meat or groceries would be of no avail. Anything short of combined selling would be impracticable and would not enable them to compete effectively. Wholesale Groceries. The integration of retail and wholesale functions in the grocery business as exemplified by the growth of the chains was also relied upon as eliminating any possible anti-competitive effects of the defendants’ entry into the handling of groceries at wholesale. Since an increasing number of retail outlets were tied to wholesalers, either in chains or voluntary or cooperative arrangements, the defendants would be foreclosed from that market, they submitted. Their distributive facilities, and particularly, their branch houses, had been displaced by the distributive depots of the chains, and could be used principally to serve the small independent retailers with both meats and groceries. In this market, according to the petitions, the defendants would be in competition with 6,000 well-established wholesale grocers with combined total sales of four billions of dollars annually. Upon information and belief, it was alleged that many of these wholesalers handled meats as well as groceries. Many, in addition, had developed important brands, and had branched into retailing and manufacturing. No danger of monopoly would result from the defendants’ entry into the business of wholesaling groceries along with meats, it was claimed. Production. The preceding decade had been marked, the petitions alleged, by the growth of a number of large firms and corporations engaged in the production, processing, and manufacturing of foods. Through mergers and acquisitions, these concerns had diversified to offer a wide range of products, many with significant brand names. The annual sales of the largest exceeded one hundred million dollars, and the average profits as a percentage of sales for seven of these large food concerns was 7% as compared with an average of 1.3% for the four defendant meat packers. Some of these food producers and manufacturers carried on their own distributing and wholesaling operations, and others maintained retail outlets as well. Several were engaged in meat packing or processing, and, the petitions continued, there were prospects of further mergers of meat packing and grocery manufacturing. Some of the defendants’ competing meat packers, too, it was charged, had begun to deal in groceries. The defendants, however, were denied the opportunity of diversifying to avail themselves of economies in selling and distributing. Modification of the decree, they argued, would allow them to take advantage of modern marketing techniques, to help preserve the small independent retailer, to increase competition and thus to reduce prices to the ultimate consumer. Upon these grounds, Swift and Armour prayed for modification of paragraphs Two, Three, Four, Five, and Six of the decree, so that they might own or retain, interests in stockyards, terminal railroads, and stockyard newspapers and market journals, to allow them to deal generally in any non-meat grocery products and to make use of their distributive facilities in handling those products, and to sell meats through retail outlets. Swift’s petition asked in addition for relief from the prohibitions of paragraphs Seven and Eight of the decree, forbidding ownership of public cold storage warehouses and the handling of fresh milk and cream respectively. Concerning fresh milk and cream, Swift alleged that its procurement of raw milk for the manufacture of butter and cheese, permitted to the defendants by the decree, was impeded by the prohibition against dealing in fresh milk. Prices paid to farmers for milk to be resold fresh were higher, it was claimed, than the prices paid for milk to be used for butter or cheese. With the growth of cities, fresh milk dealers were extending their purchasing operations further into the rural areas, driving the defendants out of the market. The fresh milk prohibition also made it more difficult for the defendants to obtain eggs and poultry, as permitted, since the farm producers preferred to sell their poultry products to a purchaser who could also buy dairy products, and could sell them livestock feeds. Since the decree prohibited the defendants from dealing in fresh milk and cream or feeds, they were handicapped in permitted activities as well. Neither The Cudahy Packing Company nor Wilson & Co., Inc., filed a petition for modication in these 1930 proceedings. Attorneys for both appeared in open court, however, to state that while they did not request modification, they would consent to any modication that might be ordered by the court, provided that it should be granted equally to all defendants. Upon the government’s general denial of the allegations of the Swift and Armour petitions, the matter was heard at length before Judge Bailey in the Supreme Court for the District of Columbia. At the conclusion, Judge Bailey ruled in opinion that the petitions should be denied in part and granted in part. The divorcement of all interest in stockyards, terminal railroads, and market journals was still commanded because of the “many opportunities for secret preferences * * * and distortion” afforded by their control. On the other hand, because the combination among the defendants had been ended, and they had no monopoly, and because it is “an extreme measure * * * to prevent anyone from making an economic use of his facilities,” the decree was modified to allow the defendants to employ unused space in their refrigerator cars and branch houses for handling the previously prohibited grocery items, and to allow the defendants generally to manufacture and deal in all commodities other than at the retail level. As to retailing, however, Judge Bailey took a different view. “The control by the defendants of the great amount of interstate commerce in meats and other articles from the producer to the consumer would probably result in the almost complete annihilation of the independent retail grocer * * he concluded. To enter into the market, the defendants would have to buy out many retailers now in business, and would become competitors of present customers. Even the unused power to engage in retailing would present dangers of abuse, he noted. Since in his opinion to allow the defendants to integrate in this direction would be inconsistent with the Congressional policy to preserve and stimulate competition, Judge Bailey continued paragraph Six of the decree in full force and effect, to forbid the defendants to own or operate retail meat markets. For the same reasons, his modification of the prohibitions on grocery dealing did not extend to the retail level. Swift’s requests for relief from paragraphs Seven and Eight of the decree, enjoining the ownership of public cold storage warehouses and the handling of fresh milk or cream, were also denied. In accordance with his opinion, Judge Bailey entered an order modifying the decree by confining the prohibitions of paragraphs Three, Four, and Five to retail dealing alone. The United States appealed from this order directly to the United States. Supreme Court. The in-tervenors, American Wholesole Grocers Association and National Wholesale Grocers Association, joined in the appeal to contest the modification. The defendants did not appeal, however, from that portion of the order which denied modification. In an opinion that is the focal point of this litigation, the Supreme Court reversed the modification order and reinstated the original decree in full. United States v. Swift & Co., 1932, 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999. Three of the Justices took no part in the decision. Of the remaining six, Justices Butler and Van Devanter dissented. The opinion for the majority of four was written by Justice Cardozo. After this judgment of the Supreme Court was handed down in 1932, the decree took full effect without qualification for the first time since its entry. The defendants brought themselves into compliance by disposing of their interests in stockyard companies, terminal railroads, and market journals. The defendants divested themselves of their interests in concerns handling prohibited groceries and other items. Swift, for example, sold its substantial interests in Libby, McNeill & Libby. Retail meat markets were closed or sold to others. The defendants wound up their businesses in prohibited non-meat foods, and discontinued use of their distributive facilities in handling those foods. Forbidden interests in public cold storage warehouses were divested. In sum, the general grocery business was divorced from meat packing, and the defendants were divested of facilities and interests which were outside the scope of the meat packing business. The defendants thenceforth were confined in the main to purchasing livestock, slaughtering, dressing, processing, and distributing and selling meats and meat products at wholesale. They have continued to carry on the business of processing and dealing in the byproducts of slaughter, including hides, hair and tallow. They have also engaged in the manufacture, processing, and sale of grocery items not prohibited by the decree, including butter, eggs, oleomargarine, poultry, cheese, ice cream, dog food, lard, peanut butter, shortening, soaps and cleansers, salad and cooking oils, and foods containing vegetables in combination with meats. Beyond the food industry, Wilson & Co., Inc., has diversified heavily and successfully in the manufacture of sporting goods, and Armour in the field of chemicals. The Current Petitions. The consent decree remained in force without further litigation for a period of twenty-four years after the Supreme Court denied the requested modification in 1932. In 1956, the current phase of the controversy opened when Cudahy filed its petition for modification of the decree in the United States District Court for the District of Columbia, successor to the Supreme Court for the District where the decree was entered. Later, in 1956, similar petitions were filed on behalf of Swift and Armour. No petition has been filed and no appearance has been entered on behalf of Wilson & Co., Inc., the other remaining defendant. The three petitions were separately prepared and independently filed, but they are sufficiently similar in the substance of their content to permit combined summarization. The underlying theory of all three is the same as that relied upon in the 1930 petitions, that is, that the decree has become both unnecessary and unjust as a result of radical changes in the meat and food industries which have taken place since the earlier proceedings. As in 1930, the defendants submit that today they have no monopolistic control or dominant power in meats, and, even so, that it would be impossible today to wield any such power to achieve an anti-competitive position in the non-meat food industry. Again it is claimed that enormous and unforeseen technological and marketing changes have so altered the structure of the industry that the decree today no longer promotes the policies of the antitrust laws, but on the contrary restricts desirable competition. With few exceptions, the changes relied upon in the current petitions are developments of the same kind and character considered in the 1930 modification proceedings. The trends of change have continued, and the differences are fundamentally matters of magnitude and degree. Concerning monopolization or dominance in the meat industry, the petitioners repeat that the combination alleged in 1920 does not exist today. Their interests in stockyards, terminal railroads, and market journals have been divested, and the Secretary of Agriculture has assumed supervisory control of the operations of stockyards and of the dissemination of livestock marketing information. With the decline in importance of rail transportation and the increased use of motor trucks for shipping livestock, the competitive advantage flowing from the location of the defendants’ large packing plants at the major rail centers has diminished, it is alleged, and an increasing volume of livestock is sold at smaller, scattered stockyards. As a consequence, the defendants’ share of the total commercial slaughter has declined further since 1930, the petitions allege. At the same time, the number of competing meat packers has increased, many have gained the advantages of specialization by dealing in a single species of livestock, or by confining their operations either to slaughtering or processing alone. The sales of competing packers have increased more rapidly than the defendants’, it is claimed, and these competitors, with lower fixed costs and modern facilities, have enjoyed a higher profit margin. In the distribution of meat products, the petitions continue, the distributive facilities of the defendants no longer confer a competitive advantage. Refrigerated railroad cars, formerly owned almost exclusively by the defendants, have lost their significance as motor carriers have increased to offer a ready means of transporting meats of all packers. The defendants have reduced their use of rail transportation, and today own a markedly reduced number of refrigerated cars. Many have been retired from use, or sold to independent car operating companies. The defendants’ branch houses have diminished in utility and importance as well, it is alleged. Increased integration, mass selling, and the general availability of refrigerated storage space have altered marketing patterns, and today meat products are more and more shipped in large quantity directly from packing plants to the purchaser. As a result, the defendants have closed a number of branch houses, and the proportion of their total businesses handled through the branch houses has steadily declined. The cumulative effect of these changes in the meat packing industry, according to the petitions, makes it impossible for any defendant to dominate the market. As an alternative position, the present petitions, like the 1930 petitions, allege that the defendants’ power in the meat packing field could no longer be used as an instrument of domination in other branches of the food industry, and therefore, the petitioners assert, there is no further need for the provisions of the decree which exclude them from dealing generally in non-meat foods and prohibit meat retailing. Again the present petitions repeat many of the claims made in 1930. It is said that the growth of large concerns at each level of the grocery industry has produced competitive conditions which eliminate any danger of monopolization by the defendants. At the retail level, the trend toward integration has continued. Chain stores, it is alleged, account for roughly half of the nation’s food sales, and the growth of voluntary and cooperative chains has made them an almost equally powerful force. Their large financial resources and high profits as compared with meat packers gives them a competitive strength unmatched by the defendants. The development of the supermarket as the principal retail food outlet and the realization of the trend toward combination stores, handling both groceries and meats, have made diversification essential to effective competition at the retail level. Federal grading of meats and the increased use of private brands have tended to reduce the importance of national packers’ brand names. Retailers generally, the petitions claim, have adequate alternative sources of meat, and are no longer dependent upon the defendants for their supply. No risks would be incurred under these conditions, it is said, by allowing defendants to retail groceries and meats. At the wholesale level, the petitions allege, the technological developments have made wholesale grocers vastly more efficient and enhanced their competitive positions. Large, one-floor warehouses with machine loading and unloading, automated inventory controls, and pre-printed order forms permit wholesalers to handle vast quantites of groceries in wide variety at a low mark-up. In contrast, the defendants’ branch houses are unfit for modern grocery handling, and would afford no overhead advantage in the distribution of groceries at wholesale. The experience of the defendants in marketing the non-meat products open to them under the decree demonstrates, it is claimed, that the defendants have not and could not tie groceries to meat and thereby employ any dominance in meats as a competitive wedge into the grocery market. In the field of food processing and manufacturing, it is alleged, the years since 1930 have seen the growth of many concerns to a position of near equality, in value of assets, with Swift and Armour, and surpassing Cudahy. Widely diversified, these companies employ extensive advertising programs and scientific promotional techniques, and make use of new and improved methods of processing, packaging, distributing, and displaying their products. Concerning the provisions of paragraph Eight, the defendants claim that the prohibition against dealing in fresh milk or cream has produced unexpected hardship in the conduct of the permitted butter, cheese, and ice cream business, as a result of government milk marketing controls. The decree therefore is claimed to place the defendants at an unwarranted competitive disadvantage. Profits in meat packing are among the lowest in the food industry, and the defendants are deprived of profit-making opportunities by their exclusion from the areas of greater return. As a result, the defendants have sustained losses since the entry of the decree, and have suffered by reason of this inequitable treatment. On these grounds, the three petitioners seek modification of paragraphs Three, Four, Six, and Eight of the decree, to allow dealing in groceries and dairy products without restriction at all levels of the market, to allow re-acquisition of interests in grocery concerns, and to permit them to sell meats at retail. In short, they seek vacation of the heart of the decree. Of the nine paragraphs of the original injunction which imposed substantive prohibitions, five would remain in force. Two of these, paragraphs One and Nine, are general in their terms, and amount to no more than admonitions to obey the law. Paragraph Two, forbidding ownership of stockyards, terminal railroads, and market news journals, would remain in force, but would add little of substance to the regulatory control now exercised by governmental agencies. Paragraph Seven forbids the defendants’ ownership of public cold storage warehouses. Cudahy alone has requested modification of this restraint. And on behalf of E. A. Cudahy, Jr., alone, a request is made for the modification of paragraph Five, which prohibited each of the individual defendants personally from owning a controlling interest in any company or concern dealing in the grocery commodities prohibited to the corporate defendants. To these petitions, the government filed an answer denying generally the factual allegations, and affirmatively setting up the 1932 decision of the Supreme Court, denying modification, as res judicata, or alternatively, as precluding re-litigation of matters which occurred before 1930. The answer, in conclusion, sets up the claimed insufficiency of the allegations of the petitions, both legally and factually. In 1958, the cause was transferred upon the motion of the defendants under Section 1404(a) of the Judicial Code, 28 U.S.C. § 1404(a) (1948), from the District of Columbia to this court, 158 F. Supp. 551. The government’s motion for summary judgment was denied by Judge Miner of this court for lack of a showing that a full hearing was unnecessary. A petition for leave to intervene was presented on behalf of Western States Meat Packers Association, Inc., and Texas Independent Meat Packers Association, two organizations representing smaller packers, and on behalf of four small meat packing companies. The petition for intervention was denied, and instead the applicants were given the right to submit a written brief as amici curiae and to participate in the oral arguments after the close of the evidence. Questions Presented. The voluminous record and extensive arguments in these proceedings reveal few sharp disputes of fact. In general, the parties are agreed upon the statistical information presented, and upon the observable facts which describe the structure and patterns of the food industry today. The factual portion of the controversy is therefore concentrated upon the conflicting inferences which might be drawn from the admitted facts, the question of the characterization of prevailing market conditions, and the application of the standards, tests, and measures for the modification of an equity decree entered upon the consent of the parties. The conflict is concerned more with the significance of facts than with their existence. The disagreement upon matters of law is also narrow. All the parties are agreed that the decision of the Supreme Court upon the appeal of the earlier modification proceeding is controlling in large degree here. They disagree, however, upon the manner in which that decision controls and upon the extent to which it is dispositive. The parties also disagree upon the proper interpretation of the Supreme Court’s opinion in the prior appeal, concerning the test laid down for modification. Upon this question of the reading of Justice Cardozo’s opinion for the majority, the petitioners disagree not only with the government but with each other as well. The Effect of the Swift Decision. Turning first to the legal question of the effect of the Supreme Court’s decision regarding the prior petition, reported as United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999, it is conceded without dissent that the opinion provides a direct precedent for this proceeding. In the years since its rendition, the decision has attained the position of a leading case in the field. It has been cited as authoritative in more than one hundred subsequent decisions, both in the lower courts and by the Supreme Court itself. Nothing has been decided since to cast doubt on its continued vitality or to limit its scope. Under the principles of stare decisis, basic to our legal system, its force must be heeded. The obligation of obedience is heightened by the fact that the decision was rendered by the highest court in the land. In the hierarchical structure of the federal judiciary, the District Courts are bound by the law as declared by the Supreme Court. We are not free to disagree, to disregard in the guise of reinterpretation, or to speculate upon probabilities or personalities. “In any event, the District Courts as well as the Courts of Appeals must follow the decisions and interpretations of our highest court in spite of any individual predilections that may exist.” United States v. Chase, 7 Cir., 1960, 281 F.2d 225, 229. But the Swift decision is more than a well-reasoned case in point for this proceeding. The opinion was handed down in the very case now to be decided. In reversing the lower court’s order and remanding the case to the District Court, the United States Supreme Court gave specific directions to govern the further course of the proceeding. The circumstances offer no leeway for departure from those directions. The determination of the trial court in the 1930 proceedings, the Supreme Court for the District of Columbia, is entitled to deference as well. To the extent that Judge Bailey's findings were not put before the United States Supreme Court because the petitioners there did not cross appeal, his determinations stand as final and conclusive for that proceeding. Under the doctrine known as the law of the case, the unreversed decision of a question of law or fact made during the course of litigation settles that question for all subsequent stages of the suit. See J. C. Millett Co. v. Distillers Distributing Corp., D.C.N.D. Cal.1960, 185 F.Supp. 874. Orderly and consistent progress of the case requires that the parties be precluded, with rare exceptions, from re-opening and re-arguing matters already decided. On behalf of Cudahy, it is argued that the effect of the 1930 proceedings is qualified by the fact that Cudahy did not then petition for modification and did not participate in the trial court hearing or in the appeal. Therefore, it is said, Cudahy is not bound by the decisions rendered either by the Supreme Court or the trial court. From the record it appears that an appearance was entered on behalf of Cudahy in the 1930 proceedings solely to state that while it did not seek modification of the decree, it would consent to such modification as the court might order, provided that it be made applicable to all the defendants. Accepting this position, Judge Bailey entered an order modifying the decree as to all defendants, including Cudahy, and the Supreme Court’s reversal reinstated the decree as to all. Cudahy’s position amounts to an attempt to eat the cake and have it, too. It sought to share in the benefits resulting from the efforts of Swift and Armour to modify the decree, while claiming to be free of the burden of an adverse determination. Had Judge Bailey’s order stood unreversed, Cudahy would have gained. With the appeal lost, however, Cudahy claims no prejudice, and asserts the right to re-litigate the questions. As a general rule, a person who allows another to represent his interests in litigation is bound by its conclusion to the same degree as the parties of record. See Restatement, Judgments § 85, pp. 402-3 (1942). It is unnecessary to decide that Cudahy is bound under this principle to the same extent as Swift and Armour, however. The Supreme Court’s decision in the prior appeal stands as the authoritative declaration of the principles which must control the disposition of Cudahy’s petition. In these circumstances, whether this court’s duty of obedience is ba