FRANCHISE LEGISLATION

HEARINGS

BEFORE THE

SUBCOMMITTEE ON ANTITRUST AND MONOPOLY

OF THE

COMMITTEE ON THE JUDICIARY

UNITED STATES SENATE

NINETIETH CONGRESS

FIRST SESSION

PURSUANT TO

S. Res. 26

ON

S. 2507
A BILL RELATING TO DEALINGS BETWEEN PARTIES TO

FRANCHISE AGREEMENTS

S. 2321
A BILL TO SUPPLEMENT THE ANTITRUST LAWS OF THE
UNITED STATES IN ORDER TO PREVENT ANTICOMPETI-
TIVE PRACTICES, BY PROVIDING FOR JUST COMPEN-
SATION UPON TERMINATION OF CERTAIN FRANCHISE

RELATIONSHIPS

OCTOBER 10, 11, 13, 16, 17, AND 31, AND NOVEMBER 1, 1967

CONTENTS

WITNESS LIST

Page

91

285

157

141

264

153

209

22

28

6

190 12

Aksen, Gerold, counsel, American Arbitration Association..
Crawford, Howard E., vice president in charge of marketing of General

Motors; accompanied by L. H. Bridenstine, associate general counsel

for General Motors. Dunckel, Pauline, director of Governmental Services Gas Appliance Manu

facturers Association... Fezell, George H., vice president, Consumers Products Division of the

Electronic Industries Association; accompanied by Hamilton Carothers,

attorney, Covington & Burling, Washington, D.C. Gellhorn, Ernest, associate professor of law at the Duke University School

of Law. Half, Robert, president of Robert Half Personnel Agencies, Inc.; accom

panied by A. Bernard Frechtman, attorney, New York, N.Y.-
Hall, Wilfred H., executive vice president of the National Oil Jobbers

Council...
Hassell, Maurice V., executive secretary of Wisconsin Wholesale Beer

Distributors' Association.
Hellring, Bernard, counsel, Independent Cash Register Dealers Associa-

tion; accompanied by Stanley Hayman, executive secretary; D. Taylor Mathews, president; Robert Carver, vice president; Robert Wharton, general manager, operations Dayton; and David Simon, attorney Hopkins, Russell H., executive manager of the National Beer Wholesalers'

Association of America, Inc..
Inwald, Chester, counsel for the National Association of Tobacco Dis-

tributors.
Kaplan, Elliot S., partner, Robins, Davis, & Lyons, attorneys at law.--
Lamb, George P., general counsel for the Association of Home Appliance

Manufacturers; accompanied by C. H. Rippe, vice president of market

ing, Hamilton Manufacturing Co.---
Lorenz, Paul F., vice president in charge of marketing for Ford Motor Co..
Pickett, William S., vice president in charge of marketing, American

Motors; accompanied by William E. Carroll, attorney at law...
Riccardo, John J., group vice president and director, Chrysler Corp.;

accompanied by J. Paul Smith, general attorney of Chrysler---
Rosloff, Carl, president of the New York Pepsi-Cola Distributors Associa-

tion, Inc.; accompanied by Arthur Kaufman; James Romano; and Jack

Rabin...
Rudnick, Harry L., general counsel, International Franchise Association;

accompanied by Robert M. Rosenberg, director, International Fran

chise Association; and Al Lapin, Interstate Industries, Inc.---Shuman, Jerome, associate professor of law, Howard University Law

School, Washington, D.C.
Slack, Lyman, chairman, Industry Relations Committee of the National

Automobile Dealers Association; accompanied by Harry Kemker,
special counsel to NADA; Tom Williams, NADA first vice president;
Gov. Leroy Collins; Prof. Stewart Macaulay, of the University of
Wisconsin Law School; James Zukerkorn, of Honolulu; Cecil L. Corley,
Gallatin, Tenn.; William James, Ford dealer, St. Louis, Mo; Charles
Frantz, Ford dealer, Pennsylvania; Lionel Kaplan, Dodge dealer,
Maryland; Peter Val Preda, past president of NADA; Curtis McCalip,
Ford dealer, Washington; and M. H. Yager, NADA treasurer, of
Albany, N.Y.

127 312

342

327

201

165

356

232

Page

Snow, William D., general counsel, National Congress of Petroleum

Retailers, Inc.; accompanied by Jack Houston, executive_secretary,
Georgia Association of Petroleum Retailers, Inc.; William D. Tucker,
executive secretary, Allied Gasoline Retailers Association of Florida;
Clifford R. Hines, Pittsburgh, Pa.; Joseph Grom, Jr., president, Ken-
tucky Gasoline Dealers Association, Inc.; Philip Peters, Pittsburgh,

Pa.; and John Bouch, Breezewood, Pa..
Van Cise, Jerrold G., of Cahill, Gordon, Sonnett, Reindel & Ohl, New

, ,
York, N.Y..
Wiss, Aaron, executive director, Beer Distributor of New Jersey, partner

in Wiss, Pachman, Weismann & Co., certified public accountants..

49

217

17

EXHIBITS

2 5

60 62

62

63 64

64

65

66

67

68

S. 2507_
S. 2321
Exhibit 1, dealer lease between Shell Oil Co. and R. A. Davies, Novem-

ber 1, 1966..
Exhibit 2, letter from Shell Oil Co., to R. A. Davies, September 20, 1967..
Exhibit 3, letter from Georgia Association of Petroleum Retailers, Inc.,

to C. L. Towers of Shell Oil Co., October 5, 1967---
Exhibit 4, letter from Texaco, Inc., to Everett E. Cummings, May 19,

1967
Exhibit 5, letter from Texaco, Inc., to Everett E. Cummings, June 7, 1967-
Exhibit 6, letter from Georgia Association of Petroleum Retailers, Inc.,

to Frank A. Spearman, June 15, 1967 --
Exhibit 7, classified advertisements for Shell Oil and Texaco service sta-

tion dealers, the Atlanta Journal & Constitution, October 8, 1967---
Exhibit 8, petition to Texaco, Inc., by Georgia Association of Petroleum

Retailers, Inc.
Exhibit 9, letter from Texaco, Inc., to Jack Houston of Georgia Associa-

tion of Petroleum Retailers, September 5, 1967---
Exhibit 10, letter from eorgia Association of Petroleum Retailers, Inc.,

to Harold B. Curtis, February 13, 1967
Exhibit 11, article, "Gulf Hours: Write Letters of Protest,” Georgia

Petroleum Retailer, June 1967.
Exhibit 12, letter from Gulf Oil Corp., to Jack W. Houston, July 17, 1967-
Exhibit 13, booklet by Shell Oil Co., for Green & Presley service station.-
Humble service station manager agreement.-
Exhibit A, American Arbitration Association board of directors, March 16,

1967.
Exhibit B, pamphlet, Commercial Arbitration Rules of the American

Arbitration Association, June 1, 1964.--
Exhibit C, pamphlet, Construction contract disputes: How they may be

resolved under the Construction Industry Arbitration Rules--
Exhibit D, pamphlet, NASBIC arbitration procedures, June 1, 1964...
Article, "Franchising and the Supreme Court,” given at the third annual

management conference on franchising, Boston College, by Jerrold G.

Van Cise,
Exhibit 1, table, GM breakdown of sales of Kapiolani Motors
Exhibit 2, table, passenger car registrations for the State of Hawaii.
Letter, to Cecil L. Corley, Jr., from E. B. Noles, of Tennessee Motor Vehicle

Commission, July 11, 1967
Letter to subcommittee from K. J. Mackley, October 23, 1967-
Brief biography of Jerome Schuman..

70 70 71 86

98

103

109

117

228 244 245

256 354 355

APPENDIX

369 370 370

Automobile Dealers Day in Court Act---
S. 2549.-
American Motors Sales Corp. v. L. G. Semke.
Supplemental statement of Consumer Products Division of Electronic

Industries Association.---
Supplemental statement of National Automobile Dealers Association.
Supplemental statement of James. Zukerkorn...
Supplemental statement of Bill James.-
Supplemental statement of Cecil L. Corley-
Garven v. American Motors Sales Corp----

401
418
420

Article," A Study of Dealers' Suits Under the Automobile Dealers' Franchise

Act," Michael J. Freed, University of Detroit Law Journal, February

1964..
Supplemental statement of General Motors Corp---
Supplemental statement of Paul F. Lorenz, Ford Motor Co..
Article, “B. D. Asks Henry E. Russell About the Carling Distributor

Arbitration Plan,” Brewers Digest, October 1967.--
Letter to the subcommittee from the Small Business Administration in-

cluding three exhibits, November 15, 1967-
Correspondence between the Hyster Co., Portland, Oreg., and Senator

Wayne L. Morse, December 7, 1967, and January 3, 1968.

423

431

434

ADDITIONAL STATEMENTS

AUTOMOBILE DEALERS

Raphael Cohen of the Metropolitan Independent Dodge-Chrysler Dealers

Association, Inc..
Robert Thayer of Robert Thayer Chrysler Plymouth, Fullerton, Calif.
Herman Schaefer of Automobile Dealers’ Association of Indiana, Inc.,
Leonard M. Gingrich of Gingrich Bros., Inc., Perrysburg, Ohio..
Carl J. Abbate of Lake Villa, Ill.
Mrs. 0. E. Hall of Eureka, Calif.
W. F. Lane of Wheeler Equipment Co., Rocky Mount, N.C.

439 443 445 446 446 446 447

SERVICE FRANCHISES

American Hotel & Motel Association..
Medicenters of America, Inc.-
Samuel S. Solomon of Quality Courts Motels, Inc.-
Robert S. Lightner of Holiday Inn of Wichita --
Delbert D. Stoner of Servicemaster Serv-Opp International Corp---
Manpower, Inc.---
Willis C. Bullard for the Institute of Temporary Services.-

447
450
453
455
455
456
457

TRANSPORTATION

E. S. Wheaton of Wheaton Van Lines, Inc.--.
Jack Kagan of Columbia Van Lines Moving & Storage Co., Inc.

459
460

MANUFACTURERS

National Association of Manufacturers..
E. Edgerton Hart of the Illinois Manufacturers' Association..
Claire G. Ely of the Maytag Co.
Farm and Industrial Equipment Institute-
Charles W. Stewart of the Machinery and Allied Products Institute---
E. Mandell de Windt of Eaton Yale and Towne, Inc.
Stephen F. Keating of Honeywell, Inc.-
Outboard Marine Corp---
Wendell Lund for the Industrial Truck Association.
Caterpillar Tractor Co..
Perry S. Patterson for National Piano Manufacturers Association.
Perry S. Patterson for the_Wurlitzer Co., the Seeburg Corp., Rock-Ola

Manufacturing Co., and Rowe Manufacturing Co..

461 464 465 469 471 477 480 482 485 487 490

495

BEVERAGES

Julius Bartasevich of Beverages of W. Va., Inc., Morgantown, W. Va----
Stanley Israel for Coca Cola Bottling Co. of New York, Inc.
Morton M. Lapides of Allegheny Beverage Corp--
C. S. Reynolds & Sons, Demopolis, Ala--

501 502 502 503

PHOTOGRAPHIC EQUIPMENT
Jack I. DuBoff of the Lens and Camera Co., Graphic Arts Supply and

Equipment Division, Peoria, Ill.--
Joseph T. Morris of the National Association of Photographic Manufac-

turers, Inc.

504

505