Mr. BALLINGER. I have finished.

Mr. FORISTEL. No questions.

Mr. PATMAN. We thank you, Mr. Sheehan.

STATEMENT OF DAVID KIDD

Mr. BALLINGER. Give your full name for the record, please.
Mr. KIDD. My name is David Kidd.

Mr. BALLINGER. What is your business?

Mr. KIDD. Automotive salesman.

Mr. BALLINGER. Do you call on a good many dealers in this State? Mr. KIDD. I do.

Mr. BALLINGER. You have heard the testimony of Mr. Saks and Mr Sheehan?

Mr. KIDD. I did.

Mr. BALLINGER. Have you any comments to make on that testimony to the committee?

Mr. KIDD. All I can say is I entirely agree with what they say.
Mr. BALLINGER. From your personal experience?

Mr. KIDD. From my own personal experience.

Mr. BALLINGER. In calling on the dealers?

Mr. KIDD. Yes, sir.

Mr. BALLINGER. That is all.

Mr. PATMAN. Any questions, Mr. Foristel?
Mr. FORISTEL. None.

STATEMENT OF JOE H. ROBERTS

Mr. BALLINGER. Please state your name.

Mr. ROBERTS. Joe H. Roberts.

Mr. BALLINGER. Your business.

Mr. ROBERTS. Parts jobber salesman.

Mr. BALLINGER. Do you have your own firm?

Mr. ROBERTS. Yes, sir.

Mr. BALLINGER. What is the name of the firm?

Mr. ROBERTS. Thorpe & Roberts.

Mr. BALLINGER. Located where?

Mr. ROBERTS. At 111 South Montana Street, Butte.

Mr. BALLINGER. You have heard the testimony this morning of Mr. Sheehan and Mr. Saks?

Mr. ROBERTS. I have.

Mr. BALLINGER. Have you any comments to make to the committee on that testimony?

Mr. ROBERTS. I have seen a large part of it practiced. There are quite a number of instances locally, and by "locally" I mean within a hundred-mile radius.

I believe something should be done about it, and should have been a long time ago.

Mr. PATMAN. You have a personal knowledge of many of the things which have been related here today?

Mr. ROBERTS. That is true.

Mr. PATMAN. Of bad practices?
Mr. ROBERTS. Yes; that is right.
Mr. PATMAN. Any other questions?

STAPTIKT HAROLD T. HALFPENNY ON BEHALF OF THE XANAL STANDARD PARTS ASSOCIATION

Mr. Rezave your full name for the record.

Mr. Haarsvar. Harold T. Halfpenny.

Mr. Rative Are you connected with the National Standard Pets Association!

Mr. HarrevNY. Yes; I am their general counsel. I am located at 12: West Washington Street, Chicago, Ill.

Mr BuzzNG You have a law firm?

Mr. HarrevNY. Yes; Halfpenny & Hahn.

Me Buzzer. How long have you been general counsel of the NaTonal Standard Parts Association?

M: HALFPENNY. I would say about 12 years, now.

Me RALINGER. Do you have a statement you wish to make to the

Mr. HarreNNY. Yes; I have. First of all, on behalf of Mr. Saks Mr. Sheehan and our other witnesses who are members of the National Standard Parts Association, Mr. Congressman, we want to express our appreciation for having the opportunity of appearing Pere We feel that this investigation has been long needed and long everitar

When we first heard of it, we had some conferences in Washington. Naturally, because of the national size of our organization, we have had a great deal to do with congressional committees. I want to say here for the record that we have never received such fine cooperation. Mr. Ballinger, your counsel, has been most helpful to us and most cooperative. For that reason, we felt we wanted to come to the first hearing of yours.

Mr. PATMAN, Mr. Ploeser, our chairman, is entitled to all that credit and I know he will be delighted to hear your expression.

Mr. HAIFPENNY. We are appreciative. We came all the way out here to appear at this hearing. We feel that the things you are trying to develop are most important because the protection of small business is very vital to the economic welfare of the United States. As the committee knows, and I think generally, a recent survey released by the Federal Trade Commission indicated a tremendous growth through mergers integration, and so forth, of large monopoly in this country. If our country is going to continue to keep its place in the world economy and continue the great strides that have been made, I feel it is vital that we protect small business. That is the reason we are going to cooperate and appear at these hearings.

I, myself, do not just feel that because something is big it necessarily is bad, but if it becomes of such tremendous size that it creates a monopoly, then it must be curbed by something in the way of Government regulation. I believe that the most modern, progressive industrial leaders do not object to the antitrust law so long as they are interpreted and enforced in accordance with the original objective of the legislation. The laws were intended to bring about justice so far as price fixing, market allocations, unlawful combinations, and

other well-known illegal practices in restraint of trade are concerned. The weakness of the antitrust enforcement, I think, is best illustrated by the testimony here this morning of Mr. Saks.

Here is a case in which the Federal Trade Commission filed a complaint in June of 1937 against General Motors. There was a decision on November 12, 1941. There were objections filed to that, and finally they came out with a modified cease-and-desist order as of June 5, 1942. There was a petition for review filed in the Sixth Circuit Court of Appeals and that finally was withdrawn on August 28, 1942. So there were years of litigation, and finally they obtained a cease-anddesist order ruling illegal certain practices.

It is so pointedly carried out in that decision I would like to call the attention of the committee to paragraphs 35, 36, 37, and 41 of the finding of facts by the Federal Trade Commission. I want to read just briefly to you paragraph 41:

The Commission finds that the use by respondent, General Motors, of the acts and practices herein above described, of selling parts on the condition, agreement, or understanding that the purchaser thereof shall not sell or use parts of a competitor, as had and now has effected lessened competition and has and now has the tendency to create a monopoly in the replacement parts used on General Motors cars.

It sets out in another paragraph, 35, and I am quoting from the finding:

The independent jobber sells the products of the independent replacement parts manufacturers, some of whom manufacture for the car manufacturer, including respondent, General Motors

Those finding of facts prove that the Government has found that the facts were as has been outlined by the two witnesses, yet due to the fact that jurisdiction is divided between the Federal Trade Commission and the Antitrust Division of the Justice Department we obtain legal victories but they have no economic effect.

We have felt in our industry that this is so serious that over a year ago we appointed a committee called the Federal study committee to go into some of these problems. Due to the lack of time, Mr. Congressman, I am not prepared here to give you recommendations as to specific amendments or the wording of the law, and so forth. However, I would like to recommend to your committee to look into and develop certain charges.

I would call attention to the administrative feature of the existing law that would eliminate the long delays and the uncertainties that are necessarily involved when cases are pending for years.

Many of these cases, as you well know, have been under investigation, the complaints have been filed for a period of 10 or 11 years, where the uncertainty is still involved and, due to the fact that although a complaint was filed and no action was taken, other people adopted the illegal practice.

The man who desires to not do something that may be in conflict with existing law cannot do so because his competitor is in that business and lack of action prevents us from clearing up some of the problem involved.

So, for that reason I would like to just say for the record, the Federal Trade Commission, after the issuance of a cease-and-desist order, requires the respondent or the defendant to send in within 60 to 90 days a report showing how they are complying with the terms of the

cease-and-desist order. Receipt of. the compliant's report is considered to be evidence of a successful antitrust action. Actually, the filing of the cease-and-desist order, the Commission feels, is a legal victory, and it is, but there is not a sufficient follow-up to see whether or not they are complying with it.

Mr. PATMAN. Who policies that cease-and-desist order?

Mr. HALFPENNY. The only one that policies it is the Federal Trade Commission, and with their limited personnel they do not have the opportunity to do it.

Mr. PATMAN. The Justice Department does not feel obligated to follow through?

Mr. HALFPENNY. From what I can gather from my experience, they do not.

Mr. BALLINGER. I can back that up, because I may say that I was economic adviser to the Federal Trade Commission for a period of 10 years when cease-and-desist orders were put on the books and the Commission did not look further into them. That is not entirely the fault of the Commission. There was not enough money.

Mr. HALFPENNY. I want to make that clear. With the task they have and with their limited personnel and funds, it is impossible for them to police it.

In view of that I would like to recommend that this committee look into the following suggestions. You know so much more about this than most of us. There have been books and volumes written on it. The more we study and read about it the less sure we are of what might be the answer. But I do feel this is so important to the country that we are going to have to face it and we are going to have to try to bring some coordinated, efficient method of handling these types of matters into being.

For this reason, I would like to recommend that Congress look into the possibility of establishing, say, an antitrust court, or at least some form of court where a specialist in these complicated economic problems will be available to hear and decide these matters and make these decisions.

We have a precedent in America and in Congress for such courts. We have the Court of Claims, we have the Tax Court and away back years ago you had the old Commerce Court. So there are numerous precedents for establishing some sort of an antitrust court.

If Congress feels that is not possible, then there is another possibility that I would like to put in the record, and that is the possibility of having the Supreme Court of the United States or proper authority, designate either some Federal judge or some district judge, either for a local district or for a circut court district of the United States, to hear such matters.

Because it being so complicated it is impossible for a person who is not conversant with the economic complicated facts to properly judge them.

The other thing I will recommend is that there be consolidation of some type, that at least the Antitrust Division of the Department of Justice be placed under the jurisdiction of or together with the actions of the Federal Trade Commission.

I mention that for several reasons, as, for instance, the example pointed out by Mr. Saks, and in addition-I think your counsel will

confirm this-if a complaint is now filed, the Federal Trade Commission makes an examination and holds hearings. They make a recommendation. A cease-and-desist order is entered. Then, if that ceaseand-desist order is appealed, the Department of Justice comes in and takes over. They appeal into the court and the man who has handled it merely sits there in an advisory capacity.

Mr. PATMAN. There should be some coordination of their activities? Mr. HALFPENNY. That is right. It is ineffective and inefficient the way it is now being done. There is too much jurisdiction and spreading of power and authority, which results in ineffective enforcement. So, I do not know just how this should be developed or whether some kind of a commission should be formed. I would like a commission better than one individual.

We have not reached a Utopia yet and I think we are better off with a number of men rather than one man. It is pretty difficult to sway a group of individuals, either by philosophy or other influence. It is more difficult to sway a commission. America has become of economic age and it is important enough to have someone sit in the Cabinet of the President to deal with the type of problems. I do not know. Those are things you can go on at great length.

Mr. BALLINGER. Do you think the existing competing jurisdiction between the Federal Trade Commission and the Antitrust Division of the Department of Justice should be eliminated by consolidating the enforcement of all antitrust laws under one head or under one agency? Mr. HALFPENNY. That is correct, plus some type of tribunal that will be qualified because of experience and training to pass upon these questions.

Our Federal judges are all very able, but as we all know as lawyers, there are certain specialists in certain fields. This is a specialized field and we should have someone properly trained.

Here is the second thing I would like to recommend. The effectiveness of any law depends upon the efficiency of the enforcement machinery and the teeth provided for enforcement. The Robinson-Patman Act, through no fault of the Congressman, I am sure, requires more effective enforcement provisions. Orders under the Clayton Act can now be enforced only by first obtaining court affirmance and a court decree commanding obedience to the order. Then, if the court decree is disobeyed, it is necessary to follow this with a contempt proceeding. Under this present procedure, it is not only necessary to prove a violation of the Clayton Act before issuing an order to cease and desist, but it is also necessary to prove a second and subsequent violation of the same law before the Commission can obtain an order of the court commanding obedience to its own order, unless, of course, there has been an appeal before that. Then it is again necessary to prove still a third violation of the same law before the respondent might be subject to penalties assessed by the court. These three violations have to be proven in the order named, even as to respondents who have at no time questioned the validity of the Commission's original order. A respondent may say, "Everything you charge against us is true," but they still can ignore these orders and go along doing it while proceeding with all these steps.

Mr. PATMAN. Have you explored the possibilities under section 3 of the Robinson-Patman Act, the criminal provisions, referred to as the Borah amendment?

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