rights of Lessor in the leased premises in respect of additional taxes, then this lease may be terminated by Lessor by giving Ten (10) Days' written notice to Lessee.

16. The terms and provisions hereof shall be applicable to the following inventory of equipment and to any other or additional equipment owned by Lessor and which is now or hereafter, during the term of this lease and any renewal or extension thereof, installed and used at the above-described premises.

INSTRUCTIONS: Insert in the space at the left of each item how many items located on the premises, also insert Size, Type, etc., Indicate by the word "None" any items not on the premises.

17. It is further understood and agreed that all notices given under this lease shall be deemed to be properly served if delivered personally, or sent by registered mail duly addressed, with postage paid, to either of the parties at their respective addresses herein above shown. Date of service of a notice served by mail shall be the date on which such notice is deposited in a United States post office.

18. This lease supersedes and cancels any and all former agreements between the parties in respect to the subject matter hereof but without prejudice to accrued rights of either party under said superseded agreements.

19. It is expressly agreed and understood that there are no understandings or agreements, written or oral, express or implied, between the parties hereto, regarding the subject matter of this lease except as is herein set forth; and that no alterations or additions to this lease shall be binding upon the Lessor unless in writing and signed by a Division Manager or Assistant Division Manager of the Lessor.

EXECUTED IN DUPLICATE on the day and year first above written.
MID-CONTINENT PETROLEUM CORPORATION,

By

(Witness :)

(Witness:)

(Lessor.)

Assistant Division Manager,
(Lessee.)

Mr. BALLINGER. Give us the address of the two stations located nearest to this courthouse.

Mr. LONG. Third and Walker, and Fourth and Western.

Mr. STEVENSON. We thank you.

(Witness excused.)

TESTIMONY OF W. H. VICK, ON BEHALF OF OKLAHOMA CITY HARDWARE CO.

(The witness was duly sworn.)

Mr. BALLINGER. State your name.
Mr. VICK. W. H. Vick.

Mr. BALLINGER. What is your business?

Mr. VICK. I am general manager of the automotive division, Oklahoma City Hardware Co.

Mr. BALLINGER. Proceed with your complaint to the committee.

Mr. VICK. I have been general manager of the automotive division of the Oklahoma City Hardware Co. ever since 1934. I have been manager of the automotive department since 1940. We have to my knowledge since I have been with the company, and I know previous to that time, had this automotive division and sold automotive parts and accessories to service stations, garages, and other outlets.

Of course, during the war, why, we could sell to service stations anything that we had in stock. They were in need of it; the materials were short.

Since the war it has become increasingly difficult to do that because of the pressure that has been put on the boys, the lessees of these company-owned service stations. I have talked to several of them, not once, but several times, accounts which we have sold for a number of years, some of them as far back as since I have been with the company, since 1934. Here, more so than ever before, they have advised me they are sorry, they are unable to because they will lose their contract with the oil companies, which happened to be the Texas Co., Magnolia, and Standard Oil Co.

Mr. BALLINGER. Which Standard Oil Co.?

Mr. VICK. I do not know what Standard it is.

Mr. BALLINGER. The Standard Oil of New Jersey?

Mr. VICK. I do not know which one.

Mr. LOCKNEY. Of Indiana.

Mr. VICK. And Phillips Petroleum Co. I talked to several of them. and they have advised me that they have been advised if they do not get everything out that is competitive to Firestone products within the next 60 days, there is a very good chance they will not be there, they will lose their lease.

Mr. STEVENSON. You heard Mr. Long's testimony with regard to the Mid-Continent?

Mr. VICK. I have not heard that from Mid-Continent.

Mr. STEVENSON. You have not heard that about Mid-Continent? Mr. VICK. No, sir.

Mr. BALLINGER. You heard Mr. Long's testimony to the effect that Firestone tires, batteries, and accessories had a greater popular acceptance than those of their competitors. Do you agree with that statement?

Mr. VICK. I disagree with that.

Mr. BALLINGER. Have you any way of proving that Firestone has no original equipment under their own brand?

Mr. VICK. They may make some, yes, that is original equipment under some private brand. General Motors and the oil dealers naturally have their own AC elements. It is made by General Motors Corp.

Mr. BALLINGER. General Motors makes a lot of this equipment?

Mr. VICK. Makes a lot of equipment that goes on as original equipment on their cars. They make AC spark plugs through a separate division of General Motors Corp. The Autolite Corp. supplies the Chrysler Corp. with all of their spark plugs, batteries, and numerous other accessories.

Mr. BALLINGER. Certainly, there would not be any reason to believe that a product made by General Motors, one of the largest corporations in the world, doing a $5,000,000,000 gross business a year, making profits of some $412,000,000 after taxes, would be inferior to Firestone? Mr. VICK. Absolutely not.

Mr. BALLINGER. You heard the statement of Mr. Long that the Firestone products give the filling-station operator a better profit?

Mr. VICK. I have talked to them on that. I have talked to a number of them. They have told me that the merchandise that they could buy from independent jobbers or other sources, not necessarily independent jobbers, other sources who carry auto spark plugs, AC plugs and Champion plugs or oil filters, that they can make a longer profit, make more money from sales by handling those lines than handling Firestone.

Mr. BALLINGER. Wouldn't a filling-station operator be serving the public better by carrying a greater quantity?

Mr. VICK. Yes. I think very definitely he should carry a number of lines.

Mr. BALLINGER. That is what a good merchant does. He tries to meet the desires and wishes of the buyer.

Mr. VICK. Yes.

Mr. BALLINGER. If this policy is in effect, he has to buy from only one source?

Mr. VICK. That is right.

Mr. BALLINGER. Have you heard any complaints about that from consumers and car owners?

Mr. VICK. I have heard second-hand. Do you want me to tell a story? I do not know; I heard it second-hand. I did not hear the conversation itself.

Mr. BALLINGER. Go ahead.

Mr. VICK. It happened that one of the officials of the Texas Co. went into one of their stations. He happened to want some new plugs for his car. The operator told him that he could give him Firestone plugs. This official of the Texas Co. told him he did not want those, he wanted some other plug. So the operator told him he could get any kind of plug he wanted at one of the local jobbers, but he was not allowed to carry it. He wanted to know why he was not allowed to carry it and he told him just along the same lines I have told you.

Mr. BALLINGER. This was told to you by the filling-station operator?

Mr. VICK. By the filling-station operator; yes. He got the additional plugs and the filling-station operator told me this official, apparently one of the higher officials in the company in the Dallas office, I believe, called the local officer and raised cain about it because their stations were not being allowed to carry other brands of merchandise than Firestone.

Mr. BALLINGER. We might want to ask you in executive session to give the name of the filling station, or we might drop the matter there. Your story is a little remote.

Mr. VICK. It is not first-hand information.

Mr. BALLINGER. I have no further questions. (Witness excused.)

TESTIMONY OF JACK T. REED

(The witness was duly sworn.)

Mr. BALLINGER. Give your full name to the committee.

Mr. REED. Jack T. Reed.

Mr. BALLINGER. What is your business?

Mr. REED. I operate a service station.

Mr. BALLINGER. Do you operate it?

Mr. REED. Yes.

Mr. BALLINGER. For whom?

Mr. REED. We handle the Texas Co. products.

Mr. BALLINGER. You operate it. Do you mean to say that you are

the lessee?

Mr. REED. No, sir; I own the lease.

Mr. BALLINGER. You own the lease?

Mr. REED. Yes, sir.

Mr. BALLINGER. You operate your own lease; is that it?

Mr. REED. We operate our station. We buy from whom we please, in other words.

Mr. BALLINGER. All right. Go ahead and make your complaint to the committee.

Mr. REED. In the past it has not always been this way. I have operated a service station; it was a company-leased station. I had been the manager of it. I was told at the time before we signed the lease our products must be Firestone.

Mr. BALLINGER. Who told you that?

Mr. REED. John Bolger.

Mr. BALLINGER. Who is Mr. John Bolger?

Mr. REED. He is manager of the Texas Co. I do not know exactly what his official position is.

Mr. BALLINGER. Regional manager?

Mr. REED. Really, I do not know. He is not division manager. He is over there in Oklahoma. He has only one other man in the State over him.

Mr. BALLINGER. Does he approve or disapprove leases?

Mr. REED. As far as I know, if he does not, his recommendation does or does not.

Mr. BALLINGER. On approximately what date did he tell you this? Mr. REED. It was in July 1947.

Mr. BALLINGER. Tell us what happened?

Mr. REED. Well, we had quite a little argument about it. I worked at the service stations before, Texas Co. stations, and for other operators, and I knew what the score was on it. So we had quite a little argument about it. He said, "Go out there anyway," because I wanted to switch to Goodrich, "If you cannot get along with Firestone, go ahead."

"It must be either Firestone or Goodrich." So I told him I would try Goodrich. I assured him I did not want Firestone.

We agreed to do that. We operated the station for 1 year, which was the length of our contract. That is the way the Texas Co. writes leases for a year at a time.

Mr. BALLINGER. Do you mean if you accepted the terms you would have to take Goodrich?

Mr. REED. I would have to take one or the other.

Mr. BALLINGER. And you chose Goodrich?

Mr. REED. No, sir.

Mr. BALLINGER. As against Firestone?

Mr. REED. No, sir; I agreed to try Firestone. After we talked it over a bit, I agreed to go along with them.

Mr. BALLINGER. You agreed to sell Firestone products?

Mr. REED. The way these leases are written up, when I go in and take over a station, I must buy the equipment and the stock of the predecessor man who was in there before me.

Mr. BALLINGER. Who fixes the price on that?

Mr. REED. Well, we tried to fix a price between ourselves, but if we cannot, then they act as an arbiter and try to bring us together. If we still cannot come together, they have to hunt somebody else to take the lease. But ordinarily, in almost all cases, a man has looked it over, he knows about what is there and they can almost always make some kind of a deal. Of course, they depreciate the equipment, I believe, it is 10 percent a year.

Mr. BALLINGER. Ten percent per year?

Mr. REED. Yes; that is equipment. So that if I stay there 1 year and go out and part friends with the Texas Co., they make the man pay 90 percent of what I paid for it. But if I go out and don't, then they can tell me, "You take your station and equipment and set it out in the street." They do not have to give me any protection. There is nothing in the contract. That is more or less an unwritten agreement. Mr. BALLINGER. They do not have to reward you for any good will in that station? For instance, if you have doubled the gallonage and was an enterprising operator?

Mr. REED. No, sir.

Mr. BALLINGER. If you created a lot of good will for the company and increased the business; they do not pay for any of that?

Mr. REED. No, sir. If the demand is there, of course, I want to stay there and continue to do business; but maybe I cannot. They allow nothing for what they term the "blue sky" or good will in that station, and I do not have any particular complaint about that, because I did not have to pay the man anything when I went in. They give the incoming man a certain amount of protection and the outgoing man a certain amount of protection, too; that is, if you part in good graces with them. If you do not, there is the threat they can tell you to take your equipment and set it out in the street. In this particular case, we