The CHAIRMAN. You are excused, Mr. Porter, and may I, on behalf of the committee, thank you for your very ready responses to the various inquiries that have been made to you this afternoon. Mr. PORTER. Thank you for your courtesy, Senator. . The CHAIRMAN. I am about to take a recess until tomorrow morning at 10 o'clock. What will be your program tomorrow morning, Mr. Buck? Mr. BUCK. Senator, if you can hold over for a few minutes, it will help out a lot. I am running way behind in this. Does the committee wish to adjourn right now? The CHAIRMAN. Of course, there is a great desire on the part of some of us to attend to other matters. We will try to be more prompt tomorrow morning and probably will not interrupt you so much. Mr. BUCK. Thank you. The CHAIRMAN. The committee will stand in recess until 10 o'clock tomorrow morning. (Whereupon, at 4:25 p. m., a recess was taken until Thursday, March 16, 1939, at 10 a. m.) INVESTIGATION OF CONCENTRATION OF ECONOMIC POWER THURSDAY, MARCH 16, 1939 UNITED STATES SENATE, Washington, D.O. The committee met at 10:20 a. m., pursuant to adjournment on Wednesday, March 15, 1939, in the Caucus Room, Senate Office Building, Senator Joseph C. O'Mahoney presiding. Present: Senator O’Mahoney (chairman); Representatives Reece and Williams; Messrs. Ferguson; Davis; Henderson; O'Connell; Patterson; Berge; Thomas D. Lynch, representing Securities and Exchange Commission; Willard Thorp and Ernest Tupper, representing Department of Commerce. Present also: Federal Trade Commissioners William A. Ayres and Charles H. March; Willis J. Ballinger, Director of Studies and Economic Advisor to the Federal Trade Commission; William T. Kelley, chief counsel, Federal Trade Commission; Phillip Buck, chief counsel, and John P. Brown, attorney, Federal Alcohol Administration. The CHAIRMAN. The meeting will please come to order. The CHAIRMAN. Call the first witness, please. The CHAIRMAN. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, in these proceedings, so help you God? Mr. FRIEL. I do. TESTIMONY OF JAMES E. FRIEL, VICE PRESIDENT, JOSEPH E. SEAGRAM & SONS, INC., NEW YORK CITY Mr. BUCK. Mr. Chairman, Mr. Friel is representing the Seagram Corporation, one of the four that we have had under discussion heretofore. I might say in this connection that I have tried to obtain the presidents of each of these large incorporations; and I wanted Mr. Sam Bronfman to appear, but he was not in New York apparently and I talked with him over the telephone in Montreal, Canada, and asked him to come here. He was busy and couldn't come, so I telegraphed him and I have here his reply. I should like to submit it for the record. Acting Chairman REECE. It will be received. (The telegram was marked "Exhibit No. 409" and is included in the appendix on p. 2687.) Mr. BUCK. Mr. Friel, what is your position with the Seagram Corporation ? Mr. FRIEL. I am vice president and treasurer in most of the American companies. Mr. Buck. You are vice president and treasurer of all the American companies? Mr. FRIEL. Practically all. Mr. Buck. What companies are you not connected with, what American companies? Mr. FRIEL. I don't know of any American active company that I am not. There are some inactive companies that I am not an officer of. CORPORATE STRUCTURE OF DISTILLERS CORPORATION SEAGRAMS, LTD. Mr. Buck. What is the corporate organization of Seagrams? Mr. FRIEL. Well, the parent company is the Distillers Corporation Seagrams, Ltd. Mr. Buck. What sort of corporation is that? Mr. BUCK. Is that what might be termed the parent holding company of the whole Seagram structure? Mr. FRIEL. That is a good way to put it. Mr. Buck. Is the parent company in Canada engaged in operating businesses there? Mr. FRIEL. The parent company as such does not operate. It owns the stocks of subsidiary companies. Mr. Buck. It is a holding company? Mr. FRIEL. It is a public company; shares are all listed on the Mr. BUCK. At the beginning the Seagram people had no organization in the United States prior to repeal of the twenty-first amendment? Mr. FRIEL. Not that I know of. Mr. BUCK. How did they enter the United States through this corporate structure? Mr. Fried. They purchased the plant at Lawrenceburg, Ind., that had been operating, as I recall it, as a title 3 plant. Mr. Buck. Whose plant was that? Mr. BUCK. First, let's get the organization. How were they organized to enter? How did they organize to enter into the United States ? Mr. FRIEL. They bought the assets, they bought the plant, and they also bought a small corporation. Mr. BUCK. What was that? a was. Mr. FRIEL. Rossville Union Corporation. After they bought both, they merged the plant into the corporation and changed its name to Joseph E. Seagram & Sons. Mr. Buck. They didn't merge the plant. The corporation took the plant over. Mr. FRIEL. That is right. Mr. Buck. The Canadian company bought the plant and then bought this corporation that you speak of? Mr. FRIEL. They bought both simultaneously. Mr. Buck. Then they transferred title to the plant to the corporation? Mr. FRIEL. That is correct. Mr. BUCK. And then the name of the original corporation was changed to Joseph E. Seagram Co.? Mr. FRIEL. That is correct. Mr. BUCK. At that time what was the size of the American organization, in dollars? Mr. FRIEL. At that time the plant itself I think was about $1,050,000. Mr. BUCK. $1,050,000? Mr. Buck. What other capital did they have in the business in the United States? Mr. FRIEL. None in the United States. Mr. Buck. None in the United States, and that is the significant "borning," you might say, of the Seagram corporate chain in the United States ? Mr. FRIEL. That is correct. Mr. BUCK. What is the present size of the Seagram American chain? Mr. FRIEL. As to plants or as to companies? Mr. BUCK. As to number of corporations involved. I won't ask you to name them unless you wish to. Mr. Friel. Well, there are probably four or five really active corporations, operating corporations. Mr. BUCK. Is Calvert Distilling Co. a subsidiary of Seagram? X Mr. FRIEL. Distillers Corporation, Seagrams, Ltd. Mr. BUCK. Lets get that straight too. You see, you have thrown x me out at first base. Julius Kessler Distilling Co. Who owns that? Mr. BUCK. Well, let's start back. You came into the United States through the Joseph E. Seagram Sons? Mr. FRIEL. That is correct. |