The CHAIRMAN. Will you please listen?

Mr. MALETZ. I am trying to develop the number of sales finance companies there are in the United States. That is all.

Mr. YNTEMA. And I am trying to testify so that the truth will be apparent.

The CHAIRMAN. Never mind, we will get the information ourselves. We don't want any elaborate answers. It is getting late. We want to conclude your testimony today. We asked a simple question.

Mr. YNTEMA. I am trying to be helpful.

The CHAIRMAN. We asked a simple question and you want to give us three chapters of answers.

Mr. YNTEMA. I am interested in the truth coming out.

The CHAIRMAN. I have listened with great patience in the past few days to those kind of answers.

Mr. YNTEMA. I am sure that is so, but I am trying to tell the whole

truth.

The CHAIRMAN. If you don't want to submit it ina simple way, we will get it.

What is the other question?

Mr. MALETZ. Approximately how many automobile dealers are engaged in the sales finance business?

Mr. GOSSETT. There are many.

Mr. YNTEMA. What do you mean by that question? Do you mean engaged themselves in supplying their own funds or engaged in retail financing in the sense of making a contract with a customer?

There are two different meanings to your question.

Mr. MALETZ. You had a table, as I recall, at page 22 of your state

ment.

Mr. YNTEMA. Oh, supplying funds for retail financing, because all dealers are engaged in retail financing in one sense.

Mr. MALETZ. I understand.

How many automobile dealers are engaged in the sales finance business?

Mr. YNTEMA. I don't think those statistics are available.

Mr. MALETZ. Approximately how many insurance companies are there in the United States which write automobile physical damage insurance?

Mr. YNTEMA. I don't have the statistics on that.

Mr. MALETZ. Would they be in the hundreds or in the thousands? The CHAIRMAN. He says he doesn't know. He doesn't know.

Mr. YNTEMA. There would be at least dozens; but, again, these are

not all in competition with each other.

Mr. MALETZ. My next question is to Mr. Gossett.

Mr. Gossett, at pages 1, 3, and 19 of your statement you say "enactment of this bill would grant a monopoly to unaffiliated finance and insurance companies"; is that right?

Mr. GOSSETT. Yes; I make that statement, I think, Mr. Maletz, a monopoly position I think I said.

Mr. MALETZ. I wonder why you did not include banks in that category; why you limit your statement to unaffiliated finance and insurance companies?

Mr. GOSSETT. Perhaps, in a sense, I should have included banks. What I meant to include were the companies that do business across

the board, and most of the banks do business only in their local communities. To the extent, though, that the banks would be freed of competition from the automobile manufacturers financing activities, I think that the term properly should be applied to them.

Mr. MALETZ. In other words, may we correct your statement to read as follows: that enactment of this bill would grant a monopoly to unaffiliated finance and insurance companies and banks?

Mr. GOSSETT. And banks in some instances.

Mr. MALETZ. All right, sir. In other words, the results of this bill would in your judgment grant what you call a private monopoly, to a group of competitors numbering in the thousands?

Mr. GOSSETT. I think your point is well taken on that, Mr. Maletz. Let me explain what I mean.

I think that whenever any company or group of companies, any institution or group of institutions, engaged in competition are freed of the competition of another class, they have to that extent and in that respect a monopoly position.

Mr. MALETZ. Is it your conclusion that a group comprising thousands of competing concerns could constitute a private monopoly? Mr. GOSSETT. Would you put your question, and then I would like to confer with Mr. Yntema. He has a point to make.

Mr. MALETZ. As I gather from your statement, it is your conclusion that a group comprising thousands of competing concerns constitutes a private monopoly.

Mr. GOSSETT. The answer to the question is that to the extent that those institutions compete with each other and do not have to compete with another class of possible competitors, they would have a monopoly position, and that is the sense in which I use the term.

Mr. YNTEMA. Mr. Chairman, that is why I wanted to answer the questions the way I did.

The CHAIRMAN. In other words, they would have a monopoly to compete with each other.

Mr. GOSSETT. They would have a monopoly position in the sense that they would have to compete only with each other, but not with the factories who have a primary interest in keeping rates down.

The CHAIRMAN. Do you not want to change the word "monopoly" then, Mr. Gossett?

Mr. GOSSETT. I prefer to use the word "monopoly." You may not agree with it, Mr. Chairman, but I think it is a monopoly position if, for example, the automobile companies, as I indicated yesterday, the domestic automobile companies, were permitted to compete in this market without any competition from abroad; I think we would have, in that sense, a monopoly position.

And, to the extent that that is an unfair characterization, of course, you will not agree with me, but I think it is a fair characterization. The CHAIRMAN. Let us take the opposite side of the coin.

Would you say that the automobile companies are a monopoly because they compete with each other?

Mr. GOSSETT. I think if we were freed by law from competition with a group or class of competitors who wanted to come in and compete with us, that would be a monopoly position; yes, sir.

Mr. McCULLOCH. Could I ask a question at this point?

Do I infer from some of your answers to questions that you mean there is no competition by the X bank in Podunk with the Y bank in

Mr. GOSSETT. Precisely.

Mr. McCULLOCH. And although there may be 10,000 banks making loans in all the Podunks in America there is no competition?

Mr. GOSSETT. Exactly.

Mr. MCCULLOCH. If they are not competing for particular paper ? Mr. GOSSETT. Exactly. And in some of those areas, we might very well compete, the factory-affiliated finance company might move in and compete with a bank, but here, under H.R. 71, we would be under a legal disability to do so.

Mr. MEADER. Mr. Gossett, would you go so far as to describe H.R. 71 as a private bill for the relief of unaffiliated finance companies? Mr. GossETT. I think that is precisely what it is, sir.

The CHAIRMAN. Now, wait a minute.

This is a bill in the interests of the Nation, the millions of car owners, car repair shops, and affiliated and unaffiliated finance companies and banks, and it is for the purpose of furthering competition in the finance end of the automobile industry.

Mr. GOSSETT. Mr. Chairman, I wish I could

The CHAIRMAN. That is in answer to what the gentleman from Michigan said, and what your answer was.

Mr. GosSETT. I wish I could agree with you, but I would not be honest if I sat here and agreed with you. I defer to your long experience and judgment, but I think that this bill would be anti-antitrust and contrary to the public interest.

Now, on that GM-Prudential refund, you know that fact was brought out back 2 years ago. There is nothing new about that, that fact of refund.

I do not know why General Motors did not put it in their statement. That is not the way we are going to do business, but there is nothing new or startling about that. That was brought out before Senator Kefauver, and I do not think there is anything wrong about it.

Mr. MALETZ. Mr. Gossett

Mr. GossETT. I am not here to defend General Motors, you know, Mr. Chairman. I hope they have a lot of trouble. Whenever they have trouble, over at our place we say it could not happen to a nicer fellow, and I am sure they say that about us; but when they have trouble and it reflects on us and, really, we think it is going to hamstring a great industry that has a lot to do with the economy of this country, we are going to stand up and be heard, if we can be, and I want to thank you for the courtesy of hearing us here.

Mr. MALETZ. Mr. Chairman?

Mr. Gossett, are you aware of the fact that the National Association of Insurance Agents has submitted a strong statement supporting this bill?

Mr. GossETT. I do not know that, no, sir; and I tell you, Mr. Meletz, I want to read all these statements, because I think we may have something to say about them. You have not heard the last of us on this.

We are going to stay right at this, because this is of vital importance to us; and I do not want you to think we are bleeding for the public.

We want to sell cars. We want to keep our people employed, and we think that if this moves in, this kind of legislation, this kind of special purpose, ad hoc legislation starts in this country, we do not know where it will end.

For instance, how can you say, as has been said here, that the mere affiliation of a finance company with a factory drives the dealers into the factory-affiliated finance company and yet do not say that about the electrical industry and all these other industries where they have finance companies? Why do you pick on the automobile industry? Mr. MALETZ. Your company made that very statement before the Supreme Court, and the Supreme Court found that to be a fact. Mr. GOSSETT. I know. We have discussed that here.

Mr. MALETZ. Yes, indeed.

Mr. GOSSETT. And that statement I just do not agree with. The CHAIRMAN. That sticks in our eye like a cinder and it is pretty hard to get it out.

Mr. GOSSETT. But, Mr. Chairman, that just does not represent the fact, and if it does represent the fact, then that provides a basis for a suit under the present laws.

Mr. MALETZ. Mr. Gossett, are you familiar with the fact that the National Association of Automobile Wholesalers

The CHAIRMAN. Just a minute. The gentleman from Ohio? Mr. McCULLOCH. I was particularly interested, Mr. Chairman, in asking Mr. Gossett a question relating to his response to the third or fourth question before this point in the record.

Would the reporter please go back and read the last three answers or four answers that Mr. Gossett gave in response to the interrogation? Mr. GOSSETT. What subject, Congressman McCulloch?

Mr. McCULLOCH. Did I understand you to say that you were not particularly interested in the consumers?

Mr. GOSSETT. I said, Mr. McCulloch, that we do not want to give the impression here that our hearts are bleeding for the consumer. We are just ordinary human beings trying to run a business and sell the most cars we can at the lowest possible prices, and I do not want to give the impression here that our hearts are bleeding for the consumer alone; that is all.

Mr. McCULLOCH. Now, Mr. Chairman, I have a comment to make on that, and it goes back to the very beginning of these hearings.

I said that I was interested in a record being written which would give us all the facts, and that it then appeared that the proponents of the bill would be well represented and that the opponents of the bill would be well represented. I am interested in the consumer.

Mr. GOSSETT. Sure, you are.

Mr. McCULLOCH. I want the consumer to get the very best financing rates that he can which are consistent with the approved economic practices of this country.

Mr. GOSSETT. Of course. That is in the best interests of this country.

Mr. McCULLOCH. That is right.

And that will be in the best interests of the long time

Mr. GOSSETT. And I want to say I have sat at the feet of the chairman here for many years and I have heard him make many statements to that effect, and I must say that I have no criticism of his

position here; but I am surprised that he would consider this kind of legislation.

The CHAIRMAN. I do not doubt that you are surprised, because you have beyond peradventure of a doubt a self-interest here. You are counsel for this company. It is your duty to do what you are doing

now.

Mr. GOSSETT. Yes, sir.

The CHAIRMAN. And whether you believe in it or not sincerely, I cannot say, but you are doing your duty and doing it very well, I assure you, and I hope you will be amply paid for it.

Mr. GOSSETT. The job does pay well, Mr. Chairman, and I give you credit for good faith, also, sir.

Mr. MALETZ. Are you familiar with the fact that the National Association of Automotive Wholesalers has strongly supported this bill?

Mr. GOSSETT. No, I am not.

Mr. MALETZ. Are you familiar with the fact that the Independent Garage Operators Association

Mr. GOSSETT. I know why their

Mr. MALETZ (continuing). A very large organization, has submitted a statement; as a matter of fact, there were two representatives here yesterday who desired to testify in strong support of this bill.

Mr. GOSSETT. All I can say is that if they took the long view of this situation, they would not support this bill. This bill is vicious and it is anti-antitrust, and I think we would all regret it, if it were enacted.

Mr. MALETZ. You say that this bill is anti-antitrust. As the chairman has pointed out, the practical effect of this bill would be to divorce GMAC from General Motors, and the Ford Motor Credit Corp. from Ford Motor. And as a result of the divorcement of GMAC from GM, as you have pointed out, GMAC would compete not only for the business of General Motors dealers, but for the business of nonGeneral Motors dealers, as well; is that not correct?

Mr. GOSSETT. I assume they would. I do not know, but I assume they would.

Mr. MALETZ. Dr. Yntema's testimony so indicates.

Mr. GOSSETT. Yes.

Mr. MALETZ. Now, what you are saying is that the addition of greater competition to the automobile financing business is anti-antitrust?

Mr. GOSSETT. Oh, no, I am not saying that.

Mr. MALETZ. This is precisely what you are saying.

Mr. GOSSETT. Now, you are mischaracterizing by statement, and you know it.

Mr. MALETZ. No, I do not know it at all.

Mr. GOSSETT. What I am saying here is that when you take out of a business a whole class of competitors and prohibit them from competing by law, then you put the public at detriment.

That permits the rest of the competitors to compete without the competition of those who have the most interest in keeping rates down. Mr. YNTEMA. Mr. Maletz, may I say you did not correctly characterize my testimony in your assumption to Mr. Gossett.

Mr. MALETZ. I beg your pardon?