industry has questioned whether the antitrust laws inhibit the continued vitality of the free press.

That, of course, is the very question that we are going to determine. But the very fact that we have had these bills introduced, and there are witnesses here to support them, indicates that some people in America feel that the antitrust laws today are not conforming to the social and economic structure of our time.

Consistent with this feeling, in April of last year, I introduced H.R. 9155, calling for a general review of the antitrust laws. Not, Mr. Chairman, calling for a codification of the law as it exists, but for a general review of the social and economic conditions of America, and how the antitrust laws bear upon them, how we preserve the freedom of the marketplace in our time.

I would submit that the urgency of the hearings that we are opening today in the newspaper industry at least raises again the desirability of a more general hearing, as contemplated in my bill, H.R. 9155.

Now, Mr. Chairman, in this hearing, I think there are some specific questions which we will want to have discussed by the witnesses, to which we will have to find answers, before any action can be taken on this bill.

One, in section 5(a) of the bill, does the vacation of final judgment deprive persons of property without due process of law, within the meaning of the fifth amendment of the U.S. Constitution?

Secondly, in the same section, is the constitutional principle of separation of powers between the legislative and judicial branches of the Federal Government violated by the retroactive aspects of the section? Thirdly, would governmental erection of barriers to entry raise questions regarding freedom of the press, which is guaranteed by the first amendment to the Constitution?

Fourth, does the standard of incipiency adopted to view joint newspaper operating arrangements preclude reexamination of the immunity that would be conferred under section 4 of this bill?

Fifth, in the definition of a "failing newspaper," does the exclusion from consideration of the assets of owners and affiliates provide a statutory sanction for the creation of failing newspapers?

Sixth, do the standards, such as "a person unlikely," "financially sound," or "failing" in section 3(5) greatly enlarge the scope of the presently existing failing company doctrine, and are these standards susceptible of some predictable determination by the court?

Seventh, can the alleged economic distress in the newspaper industry be ameliorated through the application of general principles of trade regulation without the enactment of special legislation?

Eighth, would the declaration of national policy embodied in section 2 of the act preempt conflicting State antitrust laws, thus precluding regulation of joint newspaper operating arrangements by the several States?

I believe that these will be among the questions, Mr. Chairman, that we will have to have answered to effectively solve the pressing economic and social problems that are bearing upon this industry today.

Thank you very much.

The CHAIRMAN. Our first witness this morning is the distinguished Representative from Oklahoma, Mr. Ed Edmondson.

Mr. Edmondson.

TESTIMONY OF HON. ED. EDMONDSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA

Mr.EDMONDSON. Thank you, Mr. Chairman.

Mr. Chairman, I would like to begin by expressing my very deep gratitude to you and to the members of this committee for setting these hearings, and for affording this opportunity to those of us who sponsor this legislation or similar legislation to put the cards on the table and to discuss the merits of this proposal.

I appreciate the questions that have been raised, and they are thoughtful questions, by members of your committee.

I do not personally feel competent to answer many of them, but I do believe you will have witnesses who will be competent to deal with some of the technical, legal, and constitutional questions that have been raised.

There is one question which Mr. Kastenmeier has raised which I do believe I am competent to answer, and I appreciate the opportunity to give that answer at the conclusion of the statement I have prepared. I introduced this bill in behalf of myself and several colleagues, the Honorable Tom Steed, Page Belcher, Robert Kastenmeier, and Spark Matsunaga.

And I am sure you are aware of the fact that a number of other colleagues in the House have introduced similar bills during this 90th Congress. I believe most, if not all, of them are supporting H.R. 19123.

This legislation is basically intended to protect and preserve joint newspaper operating arrangements, which operate today to benefit more than a score of American cities. And I use this word "benefit" advisedly.

I believe that I will be able to demonstrate to you before I close that there has been a genuine benefit from this arrangement in the city in which it operates in the State of Oklahoma.

To define the term, a joint operating arrangement provides for the combining or merging of the commercial functions of two metropolitan newspapers their printing, advertising, and circulation departments while maintaining two separate and competing news and editorial departments.

During the depression, an effort was made to find a means whereby two competing newspapers could continue in operation, when the economic situation was such that only one could survive in full commercial competition.

In Albuquerque, in 1933, the owners of the two newspapers there devised an operation whereby all of the commercial functions of the two newspapers were combined, but each paper maintained its own news and editorial policy.

This joint newspaper operation was successful, with one printing plant producing a morning paper and an afternoon paper-each with its own news and editorial voice.

Similar arrangements were entered into in the following years until, at present, there are 22 joint operating arrangements in the United States.

In addition to the arrangement in Albuquerque, and the one entered into in Tulsa, in 1941

The CHAIRMAN. May I interrupt there?

Have you seen those joint agreements? Have you read them at all? Mr. EDMONDSON. I have not read the text of any of the arrangements, Mr. Chairman.

The CHAIRMAN. Have you seen any of these arrangements?

Mr. EDMONDSON. Have I gone into the plant?

The CHAIRMAN. Have you ever seen them at all?

Mr. EDMONDSON. Yes, sir. I am thoroughly familiar with the arrangement that operates in Tulsa, Okla., with regard to the publication of the Tulsa Daily World and Tulsa Tribune.

I have witnessed the fact that they have separate floors in the office. building in which their editorial staffs and news departments are maintained.

The CHAIRMAN. Would you be willing to get for this committee a copy of that arrangement between those two newspapers?

Mr. EDMONDSON. Of the document itself?

The CHAIRMAN. We do not have it.

Mr. EDMONDSON. I would be very happy to ask for it, and to submit it if I can obtain it.

The CHAIRMAN. We would appreciate it if you could get a copy of that agreement for us.

Mr. EDMONDSON. This is the first notice that I have had that such a wish was present in the committee.

I will be glad to see what I can do to obtain it immediately for the chairman.

In addition to the arrangement in Albuquerque, and the one entered into in Tulsa in 1941, I understand there are similar arrangements in Birmingham, Ala., Tucson, San Francisco, Miami, Honolulu, Evansville, Fort Wayne, Shreveport, St. Louis, Lincoln, Columbus, Franklin-Oil City, Pa., Pittsburgh, Nashville, Knoxville, El Paso, Bristol, Tennessee-Virginia, Charleston, and Madison.

Many of these arrangements date back for 20 or more years, and apparently there was little doubt as to their legality.

I believe that this was basically recognized by this committee during its hearings on the newspaper industry in 1963, and understand it was noted in the debates on the Celler-Kefauver Act.

However, late in 1964, the Antitrust Division of the Department of Justice brought an action in the Tucson Federal court, in which it leveled its sights on the joint operating arrangement that had been in existence in Tucson for over 25 years.

In response to a Government motion for summary judgment, the Court held that a joint operating arrangement was a per se violation of the antitrust laws.

The Department of Justice has announced its intention of moving against all of the other joint operating arrangements similar to that in Tucson.

This threat of prosecution is today a sword of Damocles hanging over the heads of these newspapers, inhibiting them in their day-today operations, and in their planning for the future.

It might also be noted that the decision in Tucson is bound to inhibit seriously the newspaper publishers in those few cities where fully competing newspapers still exist, and where there is a continuing possibility of merger, with subsequent loss of one of the editorial

voices.

The finding of per se violation would negate any thought of turning to a joint operating arrangement as the means of reducing operating costs while maintaining editorial and news competition.

H.R. 19123 would correct a basic anomaly in the law. Under the law today, if two separate newspapers in the same city have totally merged, and at least one of these newspapers met the "failing company" test at the time of the merger, there is no impropriety or violation of any of the antitrust laws, including the Sherman Act, if the resulting merged newspaper publishes morning and afternoon editions, and one Sunday edition, with combination advertising rates, and even combination circulation rates.

However, if the same two separate newspapers, one of which is a "failing company," merge all of their commercial functions, including printing, advertising, and circulation, but continue to maintain two separate editorial voices and news departments, by entering into a joint newspaper operating arrangement, then they are technically in violation (per se) of the antitrust laws.

Why, Mr. Chairman, should the antitrust laws-which are intended to preserve and strengthen competition-be used as the instrument to destroy competition in one of the most vital of all general interests, the dissemination of news and editorial opinion?

The answer, frankly, escapes me.

However, I sincerely believe that where the public interest in a free and varied press runs afoul of the language, but not the spirit or intent of the antitrust laws, it is time for the Congress to take corrective action.

I think it is more than just an opportunity for the Congress. I think it is a responsibility of the Congress. This bill which has been introduced is responsive to that responsibility.

I would like to make one point on the practice by some joint operating arrangements to offer their advertisers savings through the use of combination advertising rates in both papers, which was found improper by the Court in Tucson.

The Supreme Court has held that a fully merged newspaper with one advertising department can offer its advertisers combination rates without violating the antitrust laws. Times-Picayune Publishing Co. v. United States, 345 U.S. 594 (1953).

Weekly and suburban newspaper chains often follow the practice of offering combination advertising rates in two or more papers.

Yet, a joint operating arrangement, which preserves two independent news and editorial departments, is now told it cannot afford such combination rates.

What the joint newspaper operators want and require is an exemption to the antitrust laws allowing two separate newspapers which

have entered into a joint newspaper operating arrangement to be treated as a single entity-as a fully combined or merged newspaper would be treated and is treated under the antitrust laws.

This, in short, is what H.R. 19123, as amended, would accomplish. The bill is not complicated, nor does it do harm to the purpose and spirit of the antitrust laws.

It is intended to permit the continuation of an arrangement which I believe is in the public interest.

I hope you will agree with this conclusion.

I would like to take the opportunity at this time to respond to the one question on which I do feel some competence, which is one that was raised by my good friend from Wisconsin, Mr. Kastenmeier. That is the question of whether the independent editorial voice is a myth in a joint newspaper operating arrangement.

I think I can testify to that point, based on a number of years of experience in eastern Oklahoma as a public official, and based also upon experience which included employment for a number of years by a daily newspaper, and employment for more than a year by United Press, before it became United Press International, an experience which I think has qualified me to comment upon newspaper practices and upon independence of newspapers from a pretty good observation point.

I can tell you without any equivocation, in the case of the Tulsa newspapers, that they are operating with extremely independent editorial voices. Their news departments are totally independent.

Each of these newspapers, for example, maintains separate representatives in our State capital in Oklahoma City. They have separate individuals, staffs, operating here in the Nation's Capital to cover the news here in Washington.

We have just had a demonstration in one of the hottest issues in the State of Oklahoma of their total independence editorially on the question of court reform. One newspaper crusaded very strongly for a plan known as the Sneed Plan to accomplish a total change in our court system in Oklahoma. The other newspaper contended very vigorously on the other side of the issue and against this court reform bill, which was just decided by the people of Oklahoma in the runoff primary election yesterday.

This is an example of their independence in a very recent occurrence in the State of Oklahoma.

I know that the physical arrangements of their news departments and their editorial departments are such as to promote this independence. I know that these newspapers compete vigorously for news breaks. I know that they afford opposing points of view an outlet.

I know that there is a freedom of the news and an opportunity for the whole story to be told in this operating situation in the city of Tulsa, which does not prevail in some other communities, which I could name if required to, where there is a complete domination of the newspaper situation by one legal operation that is permitted and sanctioned under the antitrust laws. I think it is not a myth to say that there is an independent editorial voice and an independent news policy in these newspapers, which have operated in a joint arrangement in Oklahoma for quite some time.