sometimes by fraud, sometimes by coercion, sometimes by sharp business practices, all of which led to the building up of concentrated control of American business. Instances were marshalled to describe 45 different monopolistic practices, each of them well known to be unfair and unethical as well as illegal.

On March 1, 1939, Mr. P. B. Morehouse, one of the staff of the Trade Commission, presented the summary of 15 different cases, selected from a larger compilation of 59 cases. In none of these cases did the Federal Trade Commission act on its own initiative. In none of these cases did the Federal Trade Commission exhibit a desire to interfere with business. The cases, in every single instance, were initiated by citizens of the United States who came to the Federal Trade Commission for protection against practices and devices which they believed to be in violation of their rights and in violation of the law.

Here, for example, was the case of certain tin plate manufacturers who engaged in a combination to cease the production of a certain kind of "stock plate," and to require the buyers of their product to accept what the trade knows as "seconds" up to 25 percent of the full order.

Here was the case of 750 dealers in building materials who entered into a combination to control and confine retail distribution in building materials and supplies, and to prevent direct sales by manufacturers to nonrecognized dealers, consumers, contractors, or even to governments. In other words, this combination undertook to prescribe from whom the business consumer and the individual consumer could obtain their materials.

Another case told the story of a combination of eight separate corporations manufacturing liquid chlorine for industrial and commercial purposes. These corporations manufactured a commodity for the use of business and entered into a combination to eliminate competition among themselves and to affix the price which other business was compelled to pay, thus completely eliminating compe

tition.

It would be possible to go on for hours listing the various kinds of monopolistic practices which have been used to restrain trade and commerce, and which have contributed to the unfortunate economic condition in which we find ourselves today, a situation which is marked by the unemployment of 10,000,000 of our fellow citizens. I shall place in the record here the full list of 15 selected practices presented to the Temporary National Economic Committee by the Federal Trade Commission, and I shall also file for the record the 45 different types of unfair competition and monopolistic practices cited to the T. N. E. C. by the Trade Commission.

DEVICES IN RESTRAINT OF TRADE EASILY IDENTIFIED

The point I am emphasizing here is that the essential devices and practices in restraint of trade are easily identified, and no businessman need be in doubt for 5 minutes. No businessman who resorts to conspiracy, coercion, to agreements designed to drive a particular competitor out of business, agreements to divide territory, to pool earnings, to apportion business and the like, can be under any doubt

167420-39-pt. 1-3

that he is engaging in a practice which is contrary to public policy and which has the inevitable result of depriving other businessmen of their inalienable right freely to engage in business.

ANY VAGUENESS IN ANTITRUST LAWS SHOULD BE CLARIFIED

If it be true that the antitrust laws are vague and uncertain in some particulars, no one will deny that they should be clarified. Indeed, that is one of the subjects now under examination by the Temporary National Economic Committee. But, for the purposes of the bill now under consideration, in whatever degree the laws are not clear, it would be quite impossible to secure a verdict in damages from any court or jury under this bill.

The measure is drafted to enforce the Sherman antitrust law, the antitrust provisions of the Tariff Act of 1913, and sections 3 and 7 of the Clayton Act. The Sherman Act has already been discussed. Let me here insert the three other enactments. It will be unnecessary to read them at length. But a reference to section 3 of the Clayton Act emphasizes the point I have been making-that no businessman who undertakes to enter into economic warfare against another businessman need have any doubt of the meaning of section 3 of the Clayton Act, which simply makes it unlawful for any person to impose upon any lessee or purchaser of his commodities a condition not to use or deal in the commodities of a competitor. It takes no lawyer or economist to understand that prohibition, and yet it is one of the devices whereby the business of America, which we are all seeking to build up, has been restrained and prevented from reaching its full fruition during the past generation.

PROVISIONS SUMMARIZED

The provisions of this measure may be briefly summarized as follows:

(1) A violation of any provision of the antitrust laws by a corporation is made a violation by every officer or director who has participated in causing the action to be done.

(2) Officers or directors so participating in causing a corporation to violate the antitrust laws are themselves guilty of the misdemeanor defined by the present law.

(3) Such an officer or director is made liable to forfeit to the United States in a civil action brought by the United States a sum equal to twice his compensation from the corporation, in whatever form that compensation may be paid, for every month during which the violation occurred.

(4) Such officer or director may be enjoined from rendering any service, direct or indirect, to such corporation, permanently or for a period not less than 90 days in the discretion of the court, or from receiving any compensation or from engaging in competition with the company he is enjoined from serving.

(5) Any corporation which violates the antitrust laws is made liable to forfeit to the United States in a civil action brought by the United States a sum equal to twice its total net income during every month in which the violation occurred.

(6) Provisions for the consolidation of cases and for preserving the right of trial by jury are contained in the bill.

This, Mr. Chairman, is the first draft of the bill. I do not pretend to assert that it is perfect or that its provisions should not be changed. I am not prepared to insist upon the measure of damages contained in the bill. It might easily be that this measure could be made narrower without losing any of its effectiveness.

I am not prepared to insist, for example, that any corporation which consists of numerous subsidiaries or numerous business enterprises-that the penalty for a violation by certain of those should be visited upon the entire corporation. But those are merely details which can easily be corrected.

It may be that this measure could be made much narrower without losing any of its effectiveness. For, after all, I am not particularly concerned with punishing offenses against the economic law. I am only concerned in preventing them, because I know, and it seems to me that the experience of the last generation amply proves, that the big Government of which we are all so fearful has been the direct result of the monopolistic practices condemned by the antitrust laws, and that if business in America is to be kept private it must first be kept free.

MAINTENANCE OF COMPETITION CHALLENGE TO STATESMANSHIP

If the history of the last 10 years teaches anything, surely it teaches that there is opportunity enough in the world for all, and that it is not necessary for any man to resort to unfair methods and practices in order to make a living. Nature has provided an abundance, but we have apparently been operating under fear that there is not enough to go around, and in our fear we have brought upon ourselves the very result that we have sought to avoid. With the resources of America practically untapped, with the farms producing more food than we have the purchasing ability to consume, with industrial plants capable of meeting almost every demand, with men ready and willing to work, and other men ready and willing to invest their capital, it is a reflection upon our intelligence that we hesitate, first, to make an effective rule against those sharp practices in business which resctrict opportunity, and, second, to hold out every possible reward to energy, courage, and ability in private business.

There has been much discussion of late of Government spending, and the reasons why investment of private resources seems to lag. It has been suggested by some that the opportunities for private investment are passing, that because the population is not growing as rapidly as it used to grow, and the geographical frontier has vanished, that because many industries have all the plant capacity they need and investment abroad has become a risky business, it is now necessary to turn to investment in consumer goods rather than to investment in capital goods. Others suggest that public enterprise must be expanded, and that the Government must find a way of gathering up private savings and directing them to the construction of great enterprises to be used by all the public.

It has seemed to me that both of these suggestions are the result of a defeatist philosophy. I cannot bring myself to believe that the progress of humanity has ceased, or that opportunities for private initiative no longer exist. Every bit of the progress we have achieved to date has been the result of individual initiative. The invention of

the steam engine, the invention of the gas engine, the telephone, the telegraph, the airplane, and, within the last few years, radio and television, all of these things are the product, not of consumer enterprise, but of the genius of individual men. These and all the other inventions which have blessed mankind have been the results of the competitive urge; and like the authors of the Interstate Commerce Committee report of 1913, from which I have already quoted, I believe "that the progress of the world depends in large measure upon that fair, reasonable rivalry among men which has hitherto characterized the advances of civilization." It is the function and the duty of government to promote and protect that rivalry. It is a challenge to statesmanship to make certain that this objective is attained and that competition in America's commercial life shall not be eliminated. To accomplish that purpose, let us first make certain that competition is preserved by preventing the restraints which have throttled it in the past; and, second, let us break open new channels for the investment of private savings in free, private enterprise.

It is not for me here to discuss the means whereby the latter may be accomplished. The bill before you embodies only the first objective-the maintenance and protection of the competitive system. Let us make no mistake about it. The perpetuation of American institutions, the perpetuation of religious and political freedom, the perpetuation of individual freedom, all alike depend upon the preservation of economic freedom. There can be no evonomic freedom unless we have free, private enterprise which is protected from all attacks from any source whatever, whether public or private.

Senator BURKE. Thank you very much, Senator O'Mahoney. Do any members of the subcommittee have any questions which they desire to propound at this time?

Senator O'MAHONEY. I have here certain matters to which I referred-a memorandum from the Department of Justice which I have submitted for the record; also this list of 15 selected cases from the Federal Trade Commission. And then I shall hand in to the clerk the text of the antitrust laws, to be inserted in the record.

I am very grateful for the patient attention of the committee. In addition to the report of the Department of Justice which I submitted, I have here this list of 15 cases just mentioned, which I should like to have go in the record.

(The statement of the Federal Trade cases referred to is as follows:)

The following is a list of Federal Trade Commission cases instituted as a result of complaints received from members of the industry, in which ceaseand-desist orders have been issued:

1. Docket 2565. National Electrical Manufacturers Association et al. Order to cease and desist entered December 29, 1936.

The complaint in this case was brought against 16 principal manufacturers of copper cable and wire for electrical transmission. The practice involved was price fixing under certain licensing contracts and the establishment of a system of resale price maintenance jointly requiring jobbers to maintain minimum resale prices under penalty of joint refusal to deal with them if prices were not maintained.

2. Docket 2741. American Sheet Tin Plate Company et al. Order to cease and desist entered June 24, 1936.

This matter involved a number of tin-plate manufacturers engaged in a combination agreement to cease production and sale of 'stock plate" and to

require buyers of "production plate" to accept seconds up to 25 percent of their orders. The combination involved conspiracy not to cut prices on stock plates to jobbers and manufacturers, thereby restricting and eliminating competition in the interstate sale and distribution of that kind of plate.

3. Docket 2191. Building Material Dealers Alliance et al. Order to cease and desist entered December 30, 1937.

The respondents in this case embrace 750 dealers in building material and builders' supplies located in the Cleveland-Pittsburgh trade area. The materials dealt in included cement, brick, tile, clay products, sewer pipe, plaster, sand, gravel, stone, lime, lumber, lath, roofing, and other materials ordinarily used in the construction industry. The main objective of the program followed by these respondents was to control and confine retail distribution in building materials and supplies and to prevent direct sale by manufacturers to nonrecognized dealers, consumers, contractors, State governments, etc. A further objective was to limit distribution of such supplies by eliminating motortruck distribution so as to prevent competitors from obtaining truck-load quantities; to prevent certain manufacturers from purchasing raw materials direct from other manufacturers and to facilitate price fixing among recognized dealers. Price lists were furnished to dealer members in some communities. If the dealer failed to observe such prices, pressure was brought to bear on manufacturers who sold the offending dealer to refuse to make any further sales.

4. Docket 3161. Golf Ball Manufacturers' Association et al. Order to cease and desist entered February 25, 1938.

This case involved both the Golf Ball Manufacturers' Association and the Professional Golfers' Association of America. The two associations adopted the policy and practice of coercing manufacturers and wholesalers to contract with the Professional Golfers' Association to pay the latter for the privilege of imprinting the letters "PGA" on golf balls sold to that association, a certain percentage of which was passed on to retail members. The remainder of the funds derived in this manner were used by the Professional Golfers' Association to create a preference on the part of the public for the golf balls bearing the imprint. With these agreements, the manufacturers fixed and used uniform list prices at which they sold golf balls of equal grade quality to members of the Professional Golfers' Association and to nonmember retail dealers and refused to give any rebates or any discounts to retail dealers who were not members of the Professional Golfers Association. The respondents acted concertedly to maintain the minimum resale price agreed upon and otherwise control the retail market in golf balls.

5. Docket 3317. Mathieson Alkali Works, Inc., et al. Order to cease and desist entered December 16, 1938.

This case involved some eight corporations operated in the States of New York, Pennsylvania, West Virginia, and Missouri, manufacturing liquid chlorine for industrial and commercial purposes. Either directly or indirectly through their various sales agents, they manufacture substantially all the liquid chiorine manufactured for industrial purposes sold in the United States. For the purpose of eliminating competition among themselves, these corporations entered into an agreement and carried it out, whereby they fixed and maintained uniform prices. For the purpose of effectively carrying out these agreements and maintaining these enhanced prices, they agreed to and did divide the United States into zones.

6. Docket 3607. National Biscuit Company. Order to cease and desist entered January 17, 1939.

The practice engaged in by the respondent in this case was the entering into and forming of agreements with certain jobbers and wholesalers to pay them a percentage or discount on sales by the company to certain allocated groups of retailers when such jobbers and wholesalers performed little or no service in connection with the sales in question. In return, wholesalers and jobbers agreed not to deal in competitive products. These practices tended to greatly curtail the services of jobbers and wholesalers to competitors of the National Biscuit Co. in the marketing of their products, all resulting to the prejudice and injury of the public and the competitors of the respondent.

7. Docket 2489. Gooderham & Worts, Ltd., et al. Order to cease and desist entered June 10, 1938.-Docket 2991. Hiram Walker, Inc. Order to cease and