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STATEMENT OF MILTON HANDLER, PROFESSOR, COLUMBIA LAW
SCHOOL Continued

Mr. Celler indicates that President Truman gave words of encourage-
ment to him and the committee. He said to stand firm and not to
allow anything to deter the committee.

Mr. Celler continues to explain what this committee will do and how it will procede.

Handler continues: 2. Maximum fines for violations should be changed. $50,000 would provide a deterrent.

He disagrees with his old recommendation in TNEC that offending
corporation forfeit illegal profits from violations.

Thinks it would be too difficult to prove what profits were attributable
to violation. 3. Should no longer be necessary for injured parties to
bring separate suits. After court has determined that antitrust laws
have been violated, court should be authorized to designate special
master to hear and determine claims of those injured.
Only issues should be causal relation between violation and injury and
damage sustained. Should not re-prove the violation itself. Appeals
should go directly to court of appeals. Might not be necessary to
have triple damages, though could be left in discretion of master
where violation flagrant. 4. "Declaratory rulings by the Federal
Trade Commission in cases of mergers and other acquisitions will
greatly facilitate antitrust enforcement.'

Discusses difficulty of private suits. If it cost $100,000 for Government
to sue under act, few private suitors have the finances. Now, too,
after Government brings suit and wins, many separate suits are
subsequently brought.

Also prima facie case of Government may be rebutted by defendant
and plaintiff must be prepared with facts. Courts are cluttered up
for considerable periods of time. Once Government has proved
case, only two questions remain and they are: Is there causal relation
between wrongdoing and harm sustained by claimant; extent of
injury. Need for special master.

Appeal should be directly to circuit court, as in analogous situation in
State courts of New York.

Would not cause undue apprehension to business but would be a
powerful deterrent. Courts have aready laid out clearly in some
areas what is permissible. Congress should define what is permissible
in area of corporate concentration.

With new responsibility assigned to FTC, no need for overlapping, in
field of collusive restraints. Reluctance to impose prison sentences
might be overcome by declaration in committee report favoring
sentences in cases of flagrant and deliberate violation. Novel
questions should be reserved for equity proceedings.
Careful selective process in deciding between civil and criminal prosecu-
tion; the criminal penalties of fines should be increased; deliberate
violation should be met with prison term. 6. Department should
be encouraged to simplify antitrust proceedings. 7. Procedures
should be developed for prompt disposition of minor complaints
without necessity for formal suits.

Many businessmen want to comply with law and many issues can be
settled by conference without all the formalities. Not in cases of
serious violation. 8. Department of Justice should be required to
present statement of underlying facts and reasons for consent
decrees, which should be available to the public.

Committee should set up permanent watchdog subcommittee to keep
informed on all current developments in antitrust enforcement.
Should review all pending legislation and Government action to
determine if consistent with antitrust. Antitrust has never been a
partisan issue. Both parties have planks in their platform.
Would oppose amending antitrust laws to permit patentee to limit
quantity of goods produced; would not oppose permitting geographic
limits.

STUDY OF MONOPOLY POWER

MONDAY, JULY 11, 1949

HOUSE OF REPRESENTATIVES,

SPECIAL SUBCOMMITTEE ON THE STUDY OF MONOPOLY POWER,
OF THE COMMITTEE ON THE JUDICIARY,

Washington, D. C. The special committee met, pursuant to call, at 10 a. m., in room 346, Old House Office Building, Hon. Emanuel Celler (chairman) presiding.

Present: Representatives Celler (chairman), Bryson, Wilson, Denton, Michener, Keating, and McCulloch.

Also present: Senator Joseph C. O'Mahoney; Representative James B. Frazier, Jr. (of Tennessee), Representative Michael A. Feighan (of Ohio), and Representative Clifford P. Case (of New Jersey). The CHAIRMAN. The meeting will come to order.

Prior to hearing our distinguished witnesses this morning, the Chair wishes to make a brief statement:

Today we undertake an inquiry into the conditions of our laws dealing with monopolies. Our purpose is to determine whether the laws are able to cope with the problems of concentration of economic power that we find on all sides in our national life. Times have changed; the economic system of this country has grown beyond anything we imagined even 20 years ago in the boom of 1929. The free enterprise that we have cherished in this country is challenged by alternative systems. We propose to find out whether our laws give all possible protection to American competitive free enterprise, and if necessary, to propose amendments to bring the laws up to date so that they will serve the needs and purposes of the American people.

Before the war, the Congress set up the Temporary National Economic Committee to survey the condition of our economy. That committee gathered a prodigious array of facts, more exhaustive than any previously brought together. The proceedings of the TNEC, including its final report and recommendations, have ever since constituted a library of priceless information.

The onset of the war prevented Congress from profiting from the findings of TNEC by fashioning new laws to meet the conditions there disclosed. There is reason to believe that, while in the meantime vast new changes have occurred, the problems of those times are essentially the problems of our own times with differences only in degree, or in the emphasis supplied by recent decisions of the courts.

Today we are faced with a challenge. We know that our tangled skein of antitrust laws contains fundamental conflicts and falls far short of perfection. It is our sober task to discover the legislative requirements for a new era of national growth that was not anticipated

by the authors of earlier laws on the subject. We believe this must and can be done. For, if it is not done, we shall find ourselves inevitably on the brink of a social order alien to our traditional free-enterprise society. That is our present drift. All the indications of recent history point toward the conclusion that heavily monopolized industries in time fall into government control or government ownership. If it is, as we believe, the will of the American people to avoid such an outcome as far as possible, we have to consider how monopoly can be kept to a minimum.

We undertake this study objectively, except for our general belief that the free-enterprise system is best for the United States and should be preserved so far as possible. But we have no preconceptions of what is right or wrong about particular methods of doing business. Those questions, we hope, will be answered by the evidence we bring out in this investigation.

This evidence will be garnered judiciously from all walks of our economy, from those public officials entrusted with the enforcement of the law against monopolies, from official and private fact-finding organizations, from lawyers and economists skilled in these special fields, from industry and from labor, and from consumer groups.

The opening phase of our hearings will last for 3 weeks and will, we expect, provide us with a broad view of this complex subject sufficient to direct the course of future proceedings. Thereafter, the subcommittee and its staff will devote itself for an indefinite period to detailed study. At a future date, possibly in the autumn of this year, more definite hearings will be held and these hearings may be broken down into certain phases, each dealing with a major aspect of the study. It is too early to predict the duration of the subcommittee's activities, but we plan to be able, during the second session of the Eighty-first Congress, to produce a tentative bill or bills as a tangible starting point for legislative recommendations.

I have received this morning a very important communication from our distinguished President, and I should like the general counsel of the committee, Mr. Bernhardt, to read that communication from the Chief Executive of the Nation.

Mr. BERNHARDT. Under date of July 8, 1949:

DEAR MR. CHAIRMAN: I was glad to get your letter of June 30 about the special subcommittee you have appointed to undertake a broad inquiry into the antitrust

laws.

I am wholeheartedly in favor of your subcommittee's objectives as you have outlined them to me.

Since the end of the war, other matters, both foreign and domestic, have at times appeared to overshadow the monopoly problem, or at least have been the subject of greater public preoccupation. But it is my conviction that year in and year out, there is no more serious problem affecting our country and its free institutions than the distortions and abuses of our economic system which result when unenlightened free enterprise turns to monopoly. I have watched this situation carefully and I have made sure that the agencies in the executive branch with responsibilities in this field have discharged them as effectively as their statutory powers and appropriations would permit. Moreover, I have repeatedly called to the attention of the Congress the need for stronger powers and more active measures with which to wage the never-ending fight against monopoly. Thus in my State of the Union Message in January 1947, I said: "The second major policy I desire to lay before you has to do with the growing concentration of economic power and the threat to free competition in private enterprise. In 1941 the Temporary National Economic Committee completed a comprehensive investigation into the workings of the national economy. The committee's study showed that, despite half a century of antitrust law enforce

ment, one of the gravest threats to our welfare lay in the increasing concentration of power in the hands of a small number of giant organizations.

"During the war, this long-standing tendency toward economic concentration was accelerated. As a consequence, we now find that to a greater extent than ever before, whole industries are dominated by one or a few large organizations which can restrict production in the interest of higher profits and thus reduce employment and purchasing power.

"In an effort to assure full opportunity and free competition to business we will vigorously enforce the antitrust laws. There is much the Congress can do to cooperate and assist in this program.

"To strengthen and enforce the laws that regulate business practices is not enough. Enforcement must be supplemented by positive measures of aid to new enterprises. Government assistance, research programs, and credit powers should be designed and used to promote the growth of new firms and new industries. Assistance to small business is particularly important at this time when thousands of veterans who are potential business and industrial leaders are beginning their careers.

"We should also give special attention to the decentralization of industry and the development of areas that are now under-industrialized."

Again, in my State of the Union Message in January 1948, I told the Congress : "Growth and vitality in our economy depend on vigorous private enterprise. Free competition is the key to industrial development, full production and employment, fair prices, and an ever improving standard of living. Competition is seriously limited today in many industries by the concentration of economic power and other elements of monopoly. The appropriation of sufficient funds to permit proper enforcement of the present antitrust laws is essential. Beyond that we should go on to strengthen our legislation to protect competition."

In June of that year, I vetoed the Reed-Bulwinkle bill, which authorized certain exemptions from the antitrust laws for interstate carriers. In my veto message, I said:

"I have repeatedly urged upon the Congress the necessity for a vigorous antimonopoly program. This bill would be inconsistent with such a program." The Eightieth Congress, however, overrode my veto.

In my State of the Union message this year, I said:

"If our free-enterprise economy is to be strong and healthy we must reinvigorate the forces of competition. We must assure small business the freedom and opportunity to grow and prosper. To this purpose, we should strengthen our antitrust laws by closing those loopholes that permit monopolistic mergers and consolidations."

I am gratified, therefore, to learn that your subcommittee is undertaking a serious wide-scale study of the antitrust laws for the purpose of determining in what respects they can be made more effective in preventing monopoly and developing a competitive economy.

I am glad to request the agencies referred to in your letter to cooperate fully with your subcommittee in this work. I enclose a copy of the memorandum which I have sent to the various agency heads on this subject. I have added a few agencies to the list you furnished because it seemed to me that your subcommittee might find occasion to call on them for assistance.

With all good wishes for the success of your work in this most important field.

Very sincerely yours,

HARRY S. TRUMAN.

The CHAIRMAN. The letter was accompanied by a memorandum addressed to the various bureaus. Will you read that, please, Mr. Bernhardt?

Mr. BERNHARDT. This is a memorandum dated July 8, 1949, addressed to the following departments and agencies:

The Attorney General; Secretary of the Treasury; Secretary of Defense; Secretary of Agriculture; Secretary of Interior; Secretary of Commerce; Chairman, Board of Governors of the Federal Reserve System; Chairman, Securities and Exchange Commission; Chairman, Federal Trade Commission; Chairman, Interstate Commerce Commission; Chairman, Federal Communications Commission; Chairman, Federal Power Commission.

Chairman Celler, of the House Committee on the Judiciary, has appointed a specia. subcommittee to undertake a broad inquiry into the antitrust laws. Mr.

Celler has indicated to me that he and his subcommittee wish to work in the closest cooperation with the Federal agencies that are concerned with the field of this inquiry.

I strongly favor the objectives of the Celler subcommittee. I am hopeful that its work will produce constructive recommendations and results.

I therefore request that you and your agency give Mr. Celler and his subcommittee the fullest possible cooperation and assistance, subject only to jurisdictional and appropriation limitation.

HARRY S. TRUMAN.

The CHAIRMAN. We have this morning as our first witness the distinguished Attorney General of the United States, Mr. Clark, who has given us on the House Judiciary Committee his cooperation for many years.

Mr. Clark, we are very happy to hear from you.

STATEMENT OF HON. TOM C. CLARK, ATTORNEY GENERAL OF THE UNITED STATES; ACCOMPANIED BY PEYTON FORD, THE ASSISTANT TO THE ATTORNEY GENERAL; AND HERBERT A. BERGSON, ASSISTANT ATTORNEY GENERAL

Attorney General CLARK. Mr. Chairman and members of the committee, if it is agreeable with you, I have here a written statement that I have handed to the reporter and to the press. However, I am going to just talk with you today as is usually my custom. I hope that you may later have the opportunity of reading my statement, my written statement. And I want to assure the press if they wish to take anything from the written statement, it is perfectly all right. I shall follow the written statement as closely as I can, sir.

As I proceed, if any of you have any questions, I will be very happy to answer them as I go along.

The CHAIRMAN. As you wish, Mr. Attorney General, either we can interrupt you or we can wait until you conclude. I would suggest, if I may, if it meets with the approval of the members of the committee, that we wait until your full statement has been read. Whatever you wish in the matter is agreeable.

Attorney General CLARK. Either way will be quite all right with me. It will not interfere with my chain of thought.

The CHAIRMAN. You may proceed.

Attorney General CLARK. Mr. Chairman, first let me thank and the committee for the opportunity to appear before you again. This committee, as I have stated in the past, is a committee that is very close to the hearts and minds of the Department of Justice and the personnel in the Department of Justice. We feel-and we are bragging when we say it-that it is our committee. In other words, we look upon this committee as being an arm, you might say, of our activities and of our duties and our functions. And for that reason it is always pleasant and always very helpful to be able to come here and to discuss with you the phases, and I think today one of the most important phases, of the functions of the Department of Justice.

Monopoly power, Mr. Chairman, is a problem that is transcendent, I think, to every person in America. I think it is a most important problem. In fact, I think it ranks along with the problems that we are faced with in foreign relations and that we are faced with in the defense of our country.