CONTENTS John Blair, assistant chief economist, Federal Trade Commission... 21, 366 Hon. Emanuel Celler, a Representative in Congress from the State of John D. Clark, member of the President's Council of Economic 316, 331 James L. Donnelly, Illinois Manufacturers' Association, Chicago, Ill 294 William T. Kelley, general counsel, Federal Trade Commission--- 14 21, 366 16 Willford I. King, Committee for Constitutional Government.. Angus McDonald, National Farmers' Union. Harold O. McLain, the Railways Ice Co... Lambert H. Miller, National Association of Manufacturers_ Gilbert H. Montague, lawyer, New York, N. Y... 224 149 250 122 211 109 158 Hon. Herbert R. O'Conor, a United States Senator from the State of 3,57 Hon. Joseph C. O'Mahoney, a United States Senator from the State 7 Mrs. Katherine Parsons, Pennsylvania Manufacturers' Association....... 92 124 John C. Stedman, Antitrust Division, Department of Justice. 140 271 Exerpt from the Congressional Record of July 25, 1947, Social 257 Richard B. McEntire, Acting Chairman, Securities and Exchange Clarence R. Miles, Chamber of Commerce of the United States Thomas Jefferson Miley, Commerce and Industry Association Harold W. Tucker, Associated Industries of Rhode Island, Inc__ Walter B. Wooden, associate general counsel, Federal Trade Memorandum and index from Gilbert Montague re H. R. 2734 and Report from the Committee on Trade Regulation and Trade-Marks Statement from the National Čanners' Association____ Telegrams: A. W. Gaton, Pacific American Steamship Association....... C. Wilson Harder, National Federation of Independent Busi- 327 313 153 155 269 153 nesses_ A. G. Hayes, International Association of Machinists. Text of Bill H. R. 2734_. APPENDIXES CORPORATE MERGERS AND ACQUISITIONS MONDAY, SEPTEMBER 19, 1949 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The subcommittee met, pursuant to call, at 2 p. m., in room 424, Senate Office Building, Senator Herbert R. O'Conor, presiding. Present: Senators O'Conor, Kilgore, and Donnell. Also present: Senator O'Mahoney and Mr. George S. Green, professional staff member. Senator O'CONOR. The hearing will please come to order. We are considering today H. R. 2734, which is an act to amend an act entitled "An act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914 (38 Stat. 730), as amended. (H. R. 2734 is as follows:) [H. R. 2734, 81st Cong., 1st sess.] AN ACT To amend an Act entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914 (38 Stat. 730), as amended Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 7 and 11 of an Act entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914, as amended (U. S. C., title 15, secs. 18 and 21), are hereby amended to read as follows: "SEC. 7. That no corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly. "No corporation shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of one or more corporations engaged in commerce, where in any line of commerce in any section of the country, the effect of such acquisition, of such stocks or assets, or of the use of such stock by the voting or granting of proxies or otherwise, may be substantially to lessen competition, or tend to create a monopoly. "This section shall not apply to corporations purchasing such stock solely for investment and not using the same by voting or otherwise to bring about, or in attempting to bring about, the substantial lessening of competition. Nor shall anything contained in this section prevent a corporation engaged in commerce from causing the formation of subsidiary corporations for the actual carrying on of their immediate lawful business, or the natural and legitimate branches or extensions thereof, or from owning and holding all or a part of the stock of such subsidiary corporations, when the effect of such formation is not to subs`antially lessen competition. 1 "Nor shall anything herein contained be construed to prohibit any common carrier subject to the laws to regulate commerce from aiding in the construction of branches or short lines so located as to become feeders to the main line of the company so aiding in such construction or from acquiring or owning all or any part of the stock of such branch lines, nor to prevent any such common carrier from acquiring and owning all or any part of the stock of a branch or short line constructed by an independent company where there is no substantial competition between the company owning the branch line so constructed and the company owning the main line acquiring the property or an interest therein, nor to prevent such common carrier from extending any of its lines through the medium of the acquisition of stock or otherwise of any other common carrier where there is no substantial competition between the company extending its lines and the company whose stock, property, or an interest therein is so acquired. "Nothing contained in this section shall be held to affect or impair any right heretofore legally acquired: Provided, That nothing in this section shall be held or construed to authorize or make lawful anything heretofore prohibited or made illegal by the antitrust laws, nor to exempt any person from the penal provisions thereof or the civil remedies therein provided. "Nothing contained in this section shall apply to transactions duly consummated pursuant to authority given by the Civil Aeronautics Authority, Federal Communications Commission, Federal Power Commission, Interstate Commerce Commission, the Securities and Exchange Commission, or the Secretary of Agriculture under any statutory provision vesting such power in such Commission, Authority, Secretary, or Board. "SEC. 11. That authority to enforce compliance with sections 2, 3, 7, and 8 of this Act by the persons respectively subject thereto is hereby vested in the Interstate Commerce Commission where applicable to common carriers subject to the Interstate Commerce Act, as amended; in the Federal Communications Commission where applicable to common carriers engaged in wire or radio communication or radio transmission of energy; in the Civil Aeronautics Authority where applicable to air carriers and foreign air carriers subject to the Civil Aeronautics Act of 1938; in the Federal Reserve Board where applicable to banks, banking associations, and trust companies; and in the Federal Trade Commission where applicable to all other character of commerce to be exercised as follows: "Whenever the Commission, Authority, or Board vested with jurisdiction thereof shall have reason to believe that any person is violating or has violated any of the provisions of sections 2, 3, 7, and 8 of this Act, it shall issue and serve upon such person and the Attorney General a complaint stating its charges in that respect, and containing a notice of a hearing upon a day and at a place therein fixed at least thirty days after the service of said complaint. The person so complained of shall have the right to appear at the place and time so fixed and show cause why an order should not be entered by the Commission, Authority, or Board requiring such person to cease and desist from the violation of the law so charged in said complaint. The Attorney General shall have the right to intervene and appear in said proceeding and any person may make application, and upon good cause shown my be allowed by the Commission, Authority, or Board, to intervene and appear in said proceeding by counsel or in person. The testimony in any such proceeding shall be reduced to writing and filed in the office of the Commission, Authority, or Board. If upon such hearing the Commission, Authority, or Board, as the case may be, shall be of the opinion that any of the provisions of said sections have been or are being violated, it shall make a report in writing, in which it shall state its findings as to the facts, and shall issue and cause to be served on such person an order requiring such person to cease and desist from such violations, and divest itself of the stock, or other share capital, or assets, held or rid itself of the directors chosen contrary to the provisions of sections 7 and 8 of this Act, if any there be, in the manner and within the time fixed by said order. Until a transcript of the record in such hearing shall have been filed in a United States court of appeals, as hereinafter provided, the Commission, Authority, or Board may at any time, upon such notice, and in such manner as it shall deem proper, modify or set aside, in whole or in part, any report, or any order made or issued by it under this section. "If such person fails or neglects to obey such order of the Commission, Authority, or Board while the same is in effect, the Commission, Authority, or Board may apply to the United States court of appeals, within any circuit where the violation complained of was or is being committed or where such person resides or carries on business, for the enforcement of its order, and shall certify and file |