TNEC report shows that it runs down to ore which itself is almost a monopoly, and to the motor field. You feel there should be competition? Mr. HANWAY. The newsprint manufacturing, of course, is centered in so few Mr. BALLINGER. If you add to it, you will have a very tight concentration? Mr. HANWAY. Yes. Mr. BALLINGER. Mr. Chairman, the Congressman from Wyoming wishes to have certain statements entered into the record. Mr. BARRETT. Mr. Chairman, some of the members of the oil industry desired to be heard this afternoon on the matter of the increase in the freight rates on steel because of the recent Supreme Court decision. They are mainly interested in casing for oil development. There is probably more oil development in this State than in any other State in the Union. They were advised that, because of the decision, the freight charges on casing coming from Pittsburgh or localities close thereto will be increased to such a point that it will increase the cost of their operations up to some 20 percent. They are very anxious that this committee investigate the matter and that some legislation be presented at the next session of the Congress to remedy this situation. Chairman STEVENSON. Do they have a statement they would like to file with us? Mr. BARRETT. They have asked me to request leave to file a statement. Chairman STEVENSON. We will be glad to have them do that. Mr. HILL. Mr. Chairman, I would like to say a word right here. This is for the benefit of all those in the West who are listening this morning. Under that decision of the Supreme Court on steel and cement, we are not so sure that in our territory it is not going to put all the manufacturers out of business. I mean that. I do not know how we are going to compete. Mr. PATMAN. I do not agree with you at all. Mr. HILL. I hope you are right. Mr. HILL. I hope you are right. Mr. PATMAN. That decision was predicated upon a state of facts where they were using the basing point as a weapon or a means or vehicle to engage in unfair competition only. Mr. HILL. In other words, let me give you a little illustration. Mr. PATMAN. In other words, they only destroy the basing-point system where it is used to destroy competitors. Mr. HILL. I do not want to get into an argument with the gentleman from Texas, but let me show you what is going on right under your nose. We have a wheelbarrow manufacturer who lives in Fort Collins. He is making a wheelbarrow, and he has for from 3 to 5 years. I know this myself. This is not any second-hand report. He has been making them not in Fort Collins but in Omaha. He cannot continue to make them in Omaha under this decision. He has to move his plant. That is his own statement. He has to move his plant back to Pittsburgh if he is going to compete. Mr. PATMAN. If you are right about that, I would believe as you believe. Mr. HILL. I hope we are wrong. Mr. PATMAN. But I have an entirely different understanding of the matter. Mr. HILL. I hope you explain it to the Supreme Court. Mr. PATMAN. No. On the contrary, the Supreme Court made it very plain. Mr. HILL. They are going to put us all out of business out here. Mr. PATMAN. The basing point is all right; there is nothing illegal about it, and it is not outlawed unless it is used as a vehicle to destroy competition. Mr. HILL. This man who makes the wheelbarrow in Omaha will not have to pay a dime more for his steel to make his wheelbarrow, and these folks in Wyoming will not have to pay a cent more? Do not kid the people, because you will find out what is happening. We have all got a battle on our hands. If you do not know what is being done, it is time to find out. Mr. PATMAN. The wheelbarrow manufacturer back in Pittsburgh Mr. HILL. He is not back there. He is in Omaha. Mr. PATMAN. If one were to go back there and go into competition with this fellow at Omaha, he would still have to transport his wheelbarrow out here. Mr. HILL. The man at Omaha would have to go back to Pittsburgh. He would have to ship his wheelbarrow from there. Mr. PATMAN. And the other man ships the raw material. Mr. HILL. That is what Congressman Barrett is talking about. Chairman STEVENSON. You people in the audience are getting a good illustration now of what goes on in Congress every day. Mr. HILL. I hope Mr. Patman is right. We are good friends anyway. Mr. PATMAN. Maybe it is a difference in understanding. I hope your understanding is not correct. Mr. HILL. I hope I am wrong. Mr. PATMAN. I have thought that out very carefully, because the question of the basing point came up when the Robinson-Patman law was up for consideration. An amendment was offered providing that it shall not interfere with the basing point. That amendment was not considered because those in charge of the bill told members of Congress it did not affect the basing point unless it was used as a means of destroying competition. Mr. HILL. It is just a play on words. That is a nice play on words. It is about as much out of pitch as it can be. We are going to find out in the West. Mr. Patman is up here all the way from Texas, and he knows something about Arkansas, where it will not have the same effect as it will here in Casper. I am talking about Casper; I am talking about the West. We have to put on our fighting clothes or you are going to find out where you are, so far as your manufacturers are concerned. I am willing to stick my neck out as far as it goes and say that if you do not take hold of this we are all going to be out of business-the steel processors, especially. Mr. PATMAN. I know the gentleman is very sincere in his expressions, and I know he will be just as sincere when he gets the correct. information. Mr. HILL. I hope I am wrong. Mr. PATMAN. The gentleman is not in favor of monopoly; is he? Mr. HILL. No; I am not. Mr. PATMAN. The West has been fighting for 40 years to get rid of this basing-point system that was used as a means of destroying competition. Chairman STEVENSON. You know what Madame Perkins said about the Supreme Court? She said it was nuts. Mr. HILL. On that decision I agree with Madame Perkins. I do not agree with her very often, but I do on that one. (Witness excused.) Chairman STEVENSON. We have about reached the end of our proceedings here. If there are no other grievances or problems to be brought before the committee, we will adjourn. We want to thank you for the very fine reception you have given us here. The representatives of your city, the representatives of your trade organizations and your chamber of commerce have been very kind to us. They have shown us a very fine time, and we are not going to forget you people, you businessmen. We are not going to forget Casper, Wyo. We will probably be back sooner than you think to enjoy some of your very fine hospitality. Anyone who wants to file a statement may do so. Just send it to the Select Committee on Small Business, United States House of Representatives, Washington, D. C. The hearing is closed. (At 11: 10 o'clock, the hearing was closed.) MONOPOLISTIC AND UNFAIR TRADE PRACTICES SATURDAY, SEPTEMBER 11, 1948 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE No. 2 OF THE SELECT COMMITTEE ON SMALL BUSINESS, Salt Lake City, Utah. The subcommittee met in the Federal courtroom, United States post office, Salt Lake City, Utah, at 9 a. m., the Honorable William B. Stevenson, chairman of the subcommittee, presiding. Present: Representatives Stevenson and Hill. Also present: William A. Dawson, a Representative from the State of Utah; James W. Foristel, executive director, and Willis J. Ballinger, economic counsel. Mr. STEVENSON. I should like to make a few introductory remarks for the record. This is a Subcommittee on Monopolies of the Small Business Committee of the House of Representatives, holding hearings on the subject of monopolies and monopolistic tendencies of big business right here in Salt Lake City, at your doorstep. The Small Business Committee of the House of Representatives has been making investigations throughout the United States for the past several years. We believe in bringing the Congress right to your home, in that way saving you the trouble and expense of making a trip to Washington, and we are delighted to consider any problems and discuss any grievances that you have to disclose. This hearing this morning is the same kind of hearing you would witness if you were to come to the Capitol in Washington as a witness before any of our committees. This is the third of twelve scheduled public hearings by the Select Committee on Small Business of the House of Representatives in its study and investigation of the problems of small business resulting from monopolistic and unfair trade practices. The committee has already visited Butte, Mont., on September 3, and Casper, Wyo., on September 8. Between now and October 11, we will visit, also, Kansas City, Omaha, Minneapolis, Madison, South Bend, Detroit, Louisville, Oklahoma City, and Houston, in that order. The committee feels that it had very successful hearings at Butte, Mont., and at Casper. Small-business men turned out enthusiastically to state their grievances to the committee. The testimony heard from these witnesses was of high caliber and made a deep impression on the committee. The purpose of the committee's hearings can be simply stated. For more than half of a century Congress has had upon the statute books laws intended to provide for fair play in business. I might add here that the Robinson-Patman Act is one of the antitrust laws that we refer to. Mr. Patman, a member of this committee, is not with us today. He had to leave when we finished our work at Casper. Mr. Patman is one of the authors of the Robinson-Patman Act, a man who is very much interested in antimonopolistic practices. He was chairman of this committee all the years that the Democrats had control of the House of Representatives. With the advent of the Eightieth Congress, the Republicans came into control, and Mr. Ploeser, who was the ranking Republican member of the committee, became chairman of it. These laws that I just mentioned were designed basically to protect and preserve the most essential features of the American way of economic life. We live in an economic system called capitalism. The motor of this system is free and fair competition. When competition is not free, monopoly replaces competition. Monopoly means restrained trade, the creation artifically of scarcities, the destruction of jobs for workers, and ultimately lower standards of living for the people. When competition is unfair, men lose their businesses and feel that the system is unjust. Only when competition is both free and fair is the system workable and justifiable; it then provides a maximum amount of production, jobs, and prosperity for the people and that necessary loyalty to the system itself. It is our important job to keep the system workable. It is a fact that for many years small-business men have complained that the antitrust laws of the Nation have failed dismally to accomplish the purpose for which they were intended. Small business has clamored that these laws have failed to halt the onward march of monopoly and concentrated economic power. Small business has charged that unfair and destructive trade practices have flourished, though such practices were prohibited by existing law. The purpose of the committee's hearing is, therefore, of great importance. Why have the antitrust laws failed? What must be done to make them effective? Because of prolific complaints received from small-business men regarding the failure of the antitrust laws, the present inquiry of the committee was launched in May of this year, supported by trade groups whose aggregate membership exceeds two million. The complaints of so many small-business men in themselves testify convincingly of the seriousness of the problem. At the conclusion of these hearings and probably others to be scheduled later, the committee will write a report to the Congress making recommendations as to what must be done to vitalize the antitrust laws. The House Small Business Committee was specifically charged by the Congress in its creation with the duty of protecting the welfare of small business. Numerically, small business is the foundation and backbone of our economy. There are more than 3,500,000 small-business enterprises in the Nation, accounting for the employment of millions of workers and the transaction of trade running into many billions. In all these communities that the committee will visit, we earnestly ask all small-business men, in defense of their own interest, to come forward and tell the committee their problems. Upon your testimony will depend, in large measure, your own salvation. I will now turn the hearing and the calling of witnesses over to our economic counsel, Mr. Willis Ballinger. |