A suggested letter of reply to cover the above points is attached for your guidance.

We have just reviewed the documents in our file on the wholesale floor plan you have with Bill Hailey Motors, Cassville, Missouri and find they also are not in conformance to our Company instructions, and note they were dated February 10, 1949.

We will, therefore, greatly appreciate receiving the documents specified for both Rogers and Cassville.

Your handling at the earliest possible date will also be appreciated.

Yours very truly,

Attch:

C. S. McDonald

Administrative Assistant

The Benton County Motors, Inc. of Rogers, Arkansas, has arranged with the Automobile Finance Department of The Merchants National Bank of Fort Smith, Arkansas, to finance their purchase from your company of new cars and new trucks sold by you wholesale to their company. Please draw drafts on the Automobile Finance Department of The Merchants National Bank of Fort Smith, Arkansas, and forward same with bill of lading attached to this bank through regular banking channels.

These drafts are to be a valid and binding obligation accinst this bank, contingent upon delivery by your company of motor vehicles to the dealer, drive-away companies, boat companies or railroads, the drafts being accompanied by invoices specifying among other things that the vehicles are sold to the named dealer, the motor number, serial number and other identifying description and the amount for which the vehicles are sold to the dealer.

This bank will honor drafts drawn as outlined above to the extent of $60,000.00 in units outstanding at any one time. We are willing to waive notification of individual shipments to the above dealer. The bank reserves the right to terminate this agreement by Western Union telegram or letter, effective as to all drafts drawn after receipt by you of such canceling telegram or letter.

We prefer that your representative execute conditional

sales contract in behalf of dealer.

CBW:plw
Enclosure

Yours very truly,

MERCHANTS NATIONAL BANK

C. B. Whiteside
Vice President

SUPPLEMENTAL STATEMENT ON H.R. 71

Submitted By

Theodore 0. Yntema

Vice President and Chairman of the Finance Committee of Ford Motor Company

and

Chairman of the Board of Directors

of Ford Motor Credit Company

To the Antitrust Subcommittee

of the Committee on the Judiciary

United States House of Representatives

Washington, D. C., Thursday, July 27, 1961

Introduction

FORD MOTOR COMPANY

SUPPLEMENTAL STATEMENT ON H.R. 71

Individual auto dealers, who have first-hand experience and information in regard to auto financing and insurance, were not permitted to appear before the Subcommittee and testify in regard to H.R. 71. Proponents of the Bill, who did not have any experience or first-hand information, alleged in their testimony that dealers are under the control of manufacturers and are coerced into doing business with the affiliated finance companies. dealers were not permitted to appear before the Subcommittee and show that these allegations of the proponents of H.R. 71 are false.

Auto

The statement by the National Automobile Dealers Association (page B-67) and the statements by the three Ford dealers (pages A-7, A-13, and A-16-A) therefore deserve particular attention. These statements negate the contentions by proponents of H.R. 71 and confirm the testimony given by Ford representatives. Attention is likewise directed to the statement of the National Ford Dealer Council (pages 895-896).

An examination of the testimony before the Antitrust Subcommittee on June 29-30, 1961, by witnesses favoring H.R. 71 discloses a number of misstatements of fact and of contradictory evidence. Such misstatements and contradictions that appear to warrant correction and comment are noted in this supplemental statement.

Testimony of the National Automobile Dealers Association

The National Automobile Dealers Association, representing approximately 20,000 retail dealers engaged in selling and servicing new cars and trucks of all makes, submitted a statement in opposition to H.R. 71. This statement shows many of the allegations of proponents of H.R. 71 to be

incorrect and it supports without exception the Ford testimony.

points to be noted are:

Some of the

1. The NADA statement completely refutes the American
Finance Conference argument concerning the "five pockets
of income" by pointing out that every dealer, regardless
of make handled, has available to him the same types of
incomes (pages B-68-B-71). The statement also points out
that "there is nothing sinister or illegal" about these
incomes.

2. The NADA statement also substantiates the Ford
testimony that dealers are not coerced to do business with
GMAC or FMCC by saying, "According to our best information,
General Motors dealers are not coerced to do business with
GMAC. Our GM dealer-members tell us they are completely
free to do their own financing or to do their wholesale
and retail financing with any bank, finance company, or
other institution of their choice
This is also
true with respect to Ford dealers and Ford Motor Credit
Company" (page B-72).

3. On page B-73 the NADA statement comments on the unwill-
ingness of banks and unaffiliated finance companies to
provide adequate retail and wholesale financing to dealers.
It points out several ways in which independent finance
companies have not provided adequate low-cost financing to
dealers.

4. On page B-75 the NADA statement says, "We are of the
firm conviction that GMAC has maintained its business with
GM dealers due to the fact that in most instances GMAC
offers a more complete financing service at a lower rate
than do many finance companies and banks." This, of
course, bears out the testimony of Ford witnesses.

5. On page B-76, the NADA statement mentions that it is
in the best interest of the public to have as many
sources of finance services available to the dealer and
the consumer as is humanly possible". It also states that
the public's best interest will be served if the automobile
manufacturers are free to engage in automobile financing.