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(The document above referred to is as follows:)





GENTLEMEN: As you suggested, I am outlining our understanding of the tenta. tive agreements reached in our conference in Washington on April 21 and 22, 1949.

A. The American members suggested

(1) That the British Film Producers Association work for a lower quota.

(2) That the three major circuits in Great Britain show annually a minimum of 100 American-made class-A feature pictures over either a 3- or a 5-year period, and that no American company shall have more than 15 bookings annually.

In the bookings of American pictures by the three British circuits, there shall be no discrimination against any American company on the basis of seasons, holidays, or other related factors. The American A pictures shall be the standard for such bookings. In event of disagreement, the matter shall be submitted to arbitration.

This arrangement shall be approved in advance by the Board of Trade. (3) That the BFPA work for increased dollar remittances to the United States at the expiration of the Wilson-Johnston agreement in June 1950.

(4) That the BFPA work for a liberalized policy in the uses of the unremittable sterling balances of United States companies in Great Britain.

(5) That the American and British film industries cooperate on a joint advertising program to stimulate motion-picture attendance in the United Kingdom.

(6) That the British and American film industries cooperate on a joint advertising program to stimulate the motion-picture attendance in other portions of the world.

(7) That the British and American motion-picture industries consult as to participation in film festivals having as the objective one annual film festival as world-wide in scale as the Olympic games.

(8) That the British and American film industries cooperate on the exchange of technical skills and technical information for the improvement of production skills and techniques in both countries.

B. It was further suggested as a quid pro quo for the above

(1) That the American film companies eliminate the unit playing program in Great Britain as soon as practicable.

(2) That the American companies guarantee a certain sum of money to the British film producers annually on an upward sliding scale. This guaranty is to be paid out of unremittable sterling. The basis for computing such guaranty should be British film earnings in America for the fiscal year ending June 1, 1949, plus one of two alternatives: (a) 20 percent more than British gross film earnings in the United States, or (b) 33% percent more than British net remittables for the same period.

On the proposal for guaranty of British film earnings in the American market, the British made it known that they desired to have more accurate figures on earnings of British films in America and to consider whether they would prefer a guaranty based upon British gross film earnings or on Britain film net remittances.

It was the understanding of the American members that the British agreed to all of the American proposals except numbers (1) and (2) under general heading A. With respect to number (1), the British wished to discuss this with their Government before making a commitment. With respect to number (2), the British were to discuss this matter with their Government.

It was generally agreed that the British and American industries would in the future cooperate on mutual problems; that another meeting would be held in America within 30 days to work on the details of our understandings; and that a still later meeting would be held in Britain about the 1st of August for finalization and announcement.

It was further understood that any agreements by members of the JointAnglo-American Film Council are subject to ratification by their respective organizations after consultation with legal counsel.

96347-49-pt. 1—19

Mr. ARNALL. There is no need in taking the time of the committee in discussing this proposal, but it merely shows what can be done in violation of the law under the Webb-Pomerene Act, on the theory that there is an immunity attached in this particular type operation. The CHAIRMAN. Do you know why this proposed agreement was not implemented, carried out?

Mr. ARNALL. Well, apparently there was a lack of agreement actually between the British subjects and the American people who held the conference in an effort to effectuate it.

Also I might add that this was widely publicized, and complaint was lodged with the Justice Department. I do not know, and I do not say that that is the reason it was not effectuated, but I will say that, to the credit of the MPEA, it now has abandoned this particular plan.

The CHAIRMAN. In what way did that proposed agreement violate the antitrust laws, the Pomerene Act, and the laws of the United States in general?

Mr. ARNALL. Well, actually the Americans were undertaking to work out an agreement with the British, these three Britons representing the British film industry, and certain Americans posing as representing the entire, I assume, American film industry, certainly segments of the American film industry, whereby the British were to let in 100 pictures to be played in Britain, and in return for that the Americans were to guarantee the British playing time in American theaters.

Now in order to have guaranteed the British playing time in American theaters, it would have been necessary to have some kind of conspiracy or some kind of collusive agreement whereby this group could control, an export association, mind you, a Webb-Pomerene association could control to some extent the market.

The CHAIRMAN. They wanted a Webb-Pomerene in reverse.

Mr. ARNALL. Exactly, using it in reverse. Moreover, here is another insidious thing about this type of agreement. I think this has never gone into effect, but it is a pattern. It would have an effect to set up the Motion Picture Export Association as the agency in control of the hundred pictures to be exported to Britain.

Of course, MPEA could have then told the independent producers, "We will let you send a picture over, or five pictures."

In any event, it would have left the MPEA, which is private government in this situation, controlling their domestic competition here and saying what pictures, if any, could be encompassed within this 100picture agreement with Britain, so actually, Mr. Chairman, here was an illustration of how the Webb-Pomerene Act could be used as a sword intead of a shield against American nationals, or, as the chairman so aptly says, using the Webb-Pomerene Act in reverse.

In order to complete this record, let me again say this never was effectuated, let me say to the credit of the MPEA. I recognize there are those who will say that it is imperative that we have a Webb-Pomerene Act in order to deal with competition in other countries and between monopolies there and our people here, but in my own judgment I think that the Webb-Pomerene Act is to some degree immoral in that it is a recognition that free competitive enterprise is dead everywhere else, and that it lingers on sickly here, and we must resort to monopolistic practices in order to do business in foreign countries.

Maybe we have to, but it seems to me that is a very bad admission, a very hurtful admission for our businesses and our Government to make.

So summarizing, in order to effectuate greater opportunity for our people, to curb and restrict monopoly power in the use of illegal conspiracies and combines in American business life, I desire to suggest to the subcommittee that it consider recommending:

1. That all existing exemptions from the Sherman and Clayton Acts which have heretofore been granted by law to certain special privileged segments of American business be repealed, so that all American businesses, corporations, partnerships, and individuals will be equally, and in the same manner, affected by the criminal and civil statutes against monopoly and conspiracy in restraint of trade and commerce.

2. That consideration be given to procedural changes in civil and criminal actions arising under and by virtue of the antitrust laws, to the end that such actions may be expedited; and that all Federal courts give preference to such cases over other cases and use all the power vested in them to bring such cases to a speedy trial.

3. Where it is proven that a person, firm, or corporation has violated the antitrust laws, all damages proved by the plaintiff in a civil suit for damages shall be presumed to flow from the violation of the antitrust laws by the defendant.

4. That all corporations, partnerships, and individuals violating the antitrust laws of the United States be denied access to interstate commerce in the conduct of their business, and that carriers be restricted from transporting in interstate commerce the goods, wares, and merchandise produced by persons, firms, or corporations violating the antitrust laws of the United States; perhaps, for the first offense, and certainly for the second.

5. That officers of corporations be outlawed from holding corporative office if the corporation is convicted of violating the Sherman Act, and that officers of corporations be severely dealt with criminally and civilly insofar as fines are concerned, perhaps under criminal statutes, to serve as deterrents to violation of the law.

6. That the criminal penalties for violation of the antitrust laws. be made sterner, more severe, and more effective, so as to serve as a greater deterrent.

7. I would suggest that consideration be given to making more adequate provision for the Antitrust Division in the Justice Department so that it may accelerate its antitrust activities.

I would like to add, Mr. Chairman, that I am one who does not agree that bigness in itself should be prohibited. It seems to me that if we eliminate the illegal means by which corporations and businesses become big, so that bigness shall actually be judged by ability and performance rather than by, as has happened in the past in some instances, illegal activities, I think to some extent we meet that objection.

I would also like to suggest that this committee-while I am not sure it is within the province of the subcommittee-urge that something be done to create at the public level or the governmental level more adequate financing for small and new businesses. That is very vital; very vital.

When you consider our tax laws; when you consider the structure, the business structure today, it is very difficult for new business, small business, to provide the money with which to finance its activities. I add that this trend toward monopoly, if unchecked, will ultimately end in the nationalization of industry in this country.

In conclusion I would like to add this: that really there is very little difference between the extreme left who wants government to regulate everything, and the extreme right who wants business bureaucracy to regulate everything. Actually I think they work hand-inglove together, and will ultimately destroy individual dignity, liberty, and freedom in our country, and it seems to me that it is a sad commentary on some of our American businessmen, who themselves have made successes under the capitalistic competitive system of free enterprise, and yet would deny other men that opportunity.

So if this subcommittee can come up with any recommendations or any legislation that will in any way stop the dangerous trend toward monoply, work out some measures that will increase the opportunities of small business in this country, in my judgment you will render one of the greatest services that can possibly be rendered to America and democracy.

The CHAIRMAN. Thank you very much, Governor.

That concludes the hearings for today. The next hearing will be on Friday at 10 o'clock.

(Whereupon, at 4: 20 p. m., the subcommittee adjourned, to reconvene at 10 a. m., Friday, July 22, 1949.)


FRIDAY, JULY 22, 1949



Washington, D. C.

The special subcommittee met, pursuant to adjournment, at 10:05 a. m., in room 346, Old House Office Building, Hon. Emanuel Celler (chairman) presiding.

Present: Representatives Celler, Michener, and Keating.

The CHAIRMAN. The meeting of the subcommittee will come to order.

Our first distinguished witness this morning is Dr. Hamilton. Doctor, we are very happy to hear you.


Mr. HAMILTON. Thank you.

Mr. Chairman and members of the Judiciary Committee, I presume that you want, first of all, just a few facts on biography.

My name is Walton Hamilton. At the present time I am engaged in the practice of law in Washington with Thurman Arnold.

I was born in Tennessee. For some 20 years I was professor of public law at Yale. I was at one time a member of the National Industrial Recovery Board.

For some 8 years, I was a Special Assistant to the Attorney General, and I am guilty of certain perpetrations in print, among others, a monograph called Antitrust Inaction, which was done for the Temporary National Economic Committee, of which Senator Joseph O'Mahoney was chairman.

Now, I want to ask your indulgence this morning because of the fact that I have not been able to find time for a prepared statement; and that is supplemented by the fact that I was not sure about the way in which I could be most useful to you and, therefore, if I am repeating what other witnesses have said, or if some line of inquiry appears which is of particular interest, I hope that you will not hesitate to interrupt me, because I am anxious to be just as helpful as possible.

I want to address myself very largely this morning to the question of the teeth in the antitrust laws, the methods of enforcement, and the penalties that are provided, with an end in view of asking how adequate they are.

Now, may I go back just a moment to the Fifty-first Congress, which passed the Sherman Act? I do not know whether a previous witness

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