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

Printed for the use of the Committee on the Judiciary

89-151

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1968

CONTENTS

WITNESS LIST

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 Čo...

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.Ý.

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..

Page

49

217

17

EXHIBITS

S. 2507.
S. 2321.

Exhibit 1, dealer lease between Shell Oil Co. and R. A. Davies, November 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 Georgia 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.

103

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..

109

117

228

Exhibit 1, table, GM breakdown of sales of Kapiolani Motors
Exhibit 2, table, passenger car registrations for the State of Hawaii

244

245

Letter, to Cecil L. Corley, Jr., from E. B. Noles, of Tennessee Motor Vehicle
Commission, July 11, 1967

256

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

354

355

APPENDIX

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___

369

370

370

376

379

388

394

395

397.

Article, "A Study of Dealers' Suits Under the Automobile Dealers' Franchise Act," Michael J. Freed, University of Detroit Law Journal, February 1964__.

401

Supplemental statement of General Motors Corp--
Supplemental statement of Paul F. Lorenz, Ford Motor Co..

418

420

Article, "B. D. Asks Henry E. Russell About the Carling Distributor
Arbitration Plan," Brewers Digest, October 1967__

423

Letter to the subcommittee from the Small Business Administration including three exhibits, November 15, 1967..

431

Correspondence between the Hyster Co., Portland, Oreg., and Senator
Wayne L. Morse, December 7, 1967, and January 3, 1968.

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. O. E. Hall of Eureka, Calif _

W. F. Lane of Wheeler Equipment Co., Rocky Mount, N.C..

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___

TRANSPORTATION

E. S. Wheaton of Wheaton Van Lines, Inc..

Jack Kagan of Columbia Van Lines Moving & Storage Co., Inc.

MANUFACTURERS

439

443

445

446

446

446

447

447

450

453

455

455

456

457

459

460

National Association of Manufacturers.

E. Edgerton Hart of the Illinois Manufacturers' Association...
Claire G. Ely of the Maytag Co...--

461

464

465

Farm and Industrial Equipment Institute_

469

Charles W. Stewart of the Machinery and Allied Products Institute__
E. Mandell de Windt of Eaton Yale and Towne, Inc....

Perry S. Patterson for National Piano Manufacturers Association.....

490

Perry S. Patterson for the Wurlitzer Co., the Seeburg Corp., Rock-Ola
Manufacturing Co., and Rowe Manufacturing Co. -

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. -

Joseph T. Morris of the National Association of Photographic Manufacturers, Inc..

Jack I. DuBoff of the Lens and Camera Co., Graphic Arts Supply and
Equipment Division, Peoria, Ill___

504

505