So far as actual pecuniary damages are concerned, I would have him collect only in respect to compensation for his own injury which, of course, would be tripled, but I would, in respect to equity injunc tions and the like, have them framed in such a way as to protect the whole public interest in terms of all that was revealed in the trial of the case.

Mr. KEATING. In other words, that the actual damage would be limited

Mr. HAMILTON. Yes, sir.

Mr. KEATING (continuing). Trebled to what he himself had suffered?

Mr. HAMILTON. Yes, that is right.

Mr. KEATING. But in the other provisions of the decree, the public interest would be taken into consideration, and the decree, therefore, might be broader than it would be if he that is, under its present wording-if he were considered as the sole party in interest.

Mr. HAMILTON. Yes.

Let me put it this way: One, the inquiry in court I would have as broad as the violation; two, I would limit the damage to compensation for his own injury; three, I would have the decree framed, the decree as affecting future behavior, framed in such a way as to protect the public.

The CHAIRMAN. Would this suit, brought by the Government that you suggest is contained in the O'Mahoney bill, be in addition to an action that could be brought for triple damages at the present time by an individual?

Mr. HAMILTON. Yes. There is no question about that as the law is at the present time. The Government can bring a criminal action, the Government can also bring an action in equity, and the law itself allows a private suit even where the Government brings action.

As I stated a moment ago, the Clayton Act suspends the statute of limitations where the Government is acting in order that the Government can serve as an agency of inquiry and gather the testimony, and then allows the individual to collect damage for that later.

The CHAIRMAN. But in addition to what we have in the present statutes, would you superimpose on the statutes, the remedy set forth in the O'Mahoney bill?

Mr. HAMILTON. I would; yes.

The CHAIRMAN. In the nature of bringing a public tort action against the offenders?

Mr. HAMILTON. Yes.

The CHAIRMAN. A tort suit against the offenders?

Mr. HAMILTON. Yes.

Now, you may remember, Mr. Celler, a few years ago that the Government instituted a suit against the leading tire manufacturers because of the fact that in the purchase of tires, it had been confronted with identical bids from the various companies, and sought to collect triple damage.

The case went to the United States Supreme Court, as United States v. Cooper Corporation, and the Supreme Court decided that the Government, as a person, was not entitled to sue under section 7 of the Sherman Act.

Now, a postscript needs to be added to that, because about 18 months later the State of Georgia brought suit for triple damage, and because of the fact that they had been confronted with identical bids when they sought to get supplies for the Government, and that went to the United States Supreme Court, and they decided that the State of Georgia had the right to sue. In other words, the State of Georgia is a person and can sue in tort. The United States Government is not a person who can sue in tort. That suit, by the way, was brought by a young attorney general for Georgia, whose name was Ellis Arnall. Mr. KEATING. He appeared here the other day.

Mr. HAMILTON. So I understand.

Mr. KEATING. Was this the same court that had held that in both cases?

Mr. HAMILTON. Yes.

Mr. KEATING. Both five-to-four decisions?

Mr. HAMILTON. No, I do not remember. The first one was a five-tofour decision; the second one, I do not think was a five-to-four decision. The CHAIRMAN. Have you any suggestions as to the amount to which we should increase the penalties in a criminal action under the Sherman Act? Presently it is $5,000.

Mr. HAMILTON. Yes. Well, you know it has been proposed on one or two occasions that each day be made a separate offense, as it is in some other Federal statutes.

The CHAIRMAN. Would you recommend that?

Mr. HAMILTON. Well, I should like to see them substantially increased.

The CHAIRMAN. To what?

Mr. HAMILTON. Well, certainly $5,000 as of 1890, and as of now, in view of the size of business at that time

The CHAIRMAN. You are delaying the answer. [Laughter.]

Mr. KEATING. You are answering the way Mr. Brannan did when I asked him what his program would cost. Let us have some figures. Mr. HAMILTON. Oh, I would allow the maximum to run into the millions, leave the thing very largely to the discretion of the court because it will have to be accommodated to offenders of quite different pecuniary resources.

Mr. KEATING. How many millions? You mean the criminal penalty?

Mr. HAMILTON. Yes.

Mr. KEATING. How many millions?

Mr. HAMILTON. Well, I would make it pretty high myself in view of the magnitude of modern business.

Mr. KEATING. You are upping the ante here considerably. I was interested to know whether it would be one or one hundred million.

Mr. MICHENER. You would be better advised if it were an amount in the discretion of the court.

Mr. HAMILTON. I would myself be inclined to leave it largely to the discretion of the court, without fixing a maximum limit.

Mr. KEATING. Without fixing any maximum?

Mr. HAMILTON. Without fixing any maximum.

Mr. KEATING. I do not think there is any such criminal statute on the books, is there?

Mr. HAMILTON. I do not know. Now, remember in this case, thisthis is not the kind of a thing that is usually called a crime

96347-49-pt. 1-20

Mr. KEATING. A what?

Mr. HAMILTON. It is not the kind of thing which is usually thought of as a crime. We are in this case trying to straighten out the trade practices of an industry, and it bars resort to a criminal prosecution; and again I must voice the point that I was making a little while ago, that I doubt whether the way to constructive remedy lies through the use of a criminal prosecution.

Mr. KEATING. I have felt, without prejudging anything, that where a careful selective process was followed by the Attorney General to bring criminal cases only where they were really justified, that we should increase the penalties in such cases, and our question, I think, both the question the chairman and my own inquiry put to you, related only to those cases which were criminal cases, as a matter of law, which we hope would be carefully selected as such. And in those cases, I wonder if it is feasible to write a statute which would have no top límit whatever for penalties?

and

Mr. MICHENER. I do not think you could legally write such a statute. Congress might turn it over to the courts. For instance, if a man commits a crime why, then he shall be guilty, and the court shall punish him as the court may think advisable. It has been held time and again that there must be a standard somewhere where we have different courts, and the courts must come within the standard, the top and bottom.

Mr. KEATING. Would you have any top limit on the length of time they could throw him into jail?

Mr. HAMILTON. Well, since they do not throw him into jail, it would seem to me that it would be a rhetorical question.

Mr. KEATING. They have the power under existing statute.

Mr. HAMILTON. Yes, the power is there.

Mr. KEATING. Would you retain that power?

Mr. HAMILTON. If you think that in any way it is a deterrent, it may be worth something. I think myself it is very largely rhetorical because it is not enforced.

Mr. MICHENER. May I ask this? As I recall, on other occasions, you have expressed views as to the advisability of an antitrust court. Am I correct?

Mr. HAMILTON. I know that has been proposed, and it may very well be that on one occasion I committed myself to it.

Mr. MICHENER. What do you think about it now? Would you advise that the Congress establish an antitrust court?

Mr. HAMILTON. Back in the days of the National Industrial Recovery Board it was proposed at that particular time to establish a court which specialized in problems that had to do with the operation of the national economy, in the so-called Logan bill, which had a good deal of support at that time, but never crashed out through.

The advantages, I think, are perfectly clean cut. You would get a trained personnel there who, by experience with the different industries, year after year, would acquire a great deal of knowledge, understanding, and wisdom in this particular field.

You have, of course, against it the argument that is against any specialized court, that they tend to be people who see that subject only, but do not see that subject in terms of the whole economy, or the operation of the affairs of the Nation.

The CHAIRMAN. They lose sight of the consumer.

Mr. HAMILTON. They may lose sight of the consumer. The question has been most valiantly argued, you know, with respect to the question of a so-called special court for patents, and a great many friends of mine on the Federal bench are rather violently opposed to that because they insist that judges sitting there year after year would themselves become as specialized as patent lawyers, and that the patent problem does not involve patents alone; it involves the whole economy and, therefore, if there is to be sound judgment, you need common sense, and a very wide range of experience, and I think one of the difficulties of the American judiciary which it has aimed at, is it has been in favor of wide understanding, and it has been opposed to specialization. That is one reason why I think it is that some of the most eminent of men who have ever sat on the United States Supreme Court have been country lawyers.

They have had common sense, wisdom, understanding, a wide experience, intimate contact with all sorts of people, and for that reason, it seems to me, that the petty techniques of legalistic law are not any substitute therefor.

Mr. MICHENER. One thing more: I was very much interested, as I think we all were, in your discourse. I was especially impressed in the beginning because you are the only man whom I have ever heard on the witness stand who said that he was opposed to the established order even in a church, and that status quo will not do anywhere.

Now, you believe in change. Do you believe in change just for the sake of change and progressiveness, or would you want some objective before you applied your formula?

Mr. HAMILTON. Well, I am afraid that what you are referring to is one of my minor indiscretions. [Laughter.]

Mr. MICHENER. One of your what?

Mr. HAMILTON. One of my minor indiscretions.

Mr. MICHENER. If that is a minor one, I would like to hear one of the major ones. [Laughter.]

Mr. HAMILTON. But, of course, being opposed to anything that is established, does not mean going wild. It means a clean-cut analysis, clean-cut objectives, knowing what your goal is, and moving toward your goal.

Mr. MICHENER. That is all.

The CHAIRMAN. Thank you very much, Doctor.

Mr. HAMILTON. May I say that if I can be of further service to the committee or to any one of its members I will be very glad to be called upon.

The CHAIRMAN. I am quite sure you will be called upon.

Mr. HAMILTON. Thank you.

The CHAIRMAN. Our next witness is Dr. Lazare Teper, economist of the International Ladies' Garment Workers' Union.

You may proceed, Doctor.

STATEMENT OF LAZARE TEPER, DIRECTOR OF RESEARCH, INTERNATIONAL LADIES' GARMENT WORKERS' UNION; ACCOMPANIED BY EMIL SCHLESINGER, COUNSEL, INTERNATIONAL LADIES' GARMENT WORKERS' UNION

Mr. TEPER. My name is Lazare Teper. I am director of research for the International Ladies' Garment Workers' Union, I am appearing here on behalf of this organization and its 405,000 members.

We want to thank Congressman Celler, chairman of the committee, for his express invitation to be here.

I would like to say for the record that my associate at the witness table is Mr. Emil Schlesinger, counsel for the International Ladies' Garment Workers' Union.

I would like to say just a brief word about myself. I am an economist by training. I am a graduate of Johns Hopkins University in Baltimore in the field of economics, and I hold a doctorate in economics from that university.

I have been connected with the women's garment industry in a research capacity since 1935, except for a period of absence in the armed services of the United States.

At this time I would like to present the views of our union on the problems of growing economic power, with special reference to the effect on the welfare of the industry in which our members work—the manufacture of garments for the women of America.

I. PRELIMINARY STATEMENT

The subject of economic concentration is usually linked with the evolution of the giant corporations which dominate the economic scene and which, by their size and resources, dwarf their smaller counterparts. Despite the injunction of Jefferson penned in a 1785 letter to Madison, that "legislators cannot invent too many devices for subdividing property" and despite antitrust legislation, bigness has not been banned and corporate expansion, even after it has achieved the ability to oppress, has not been curtailed.1

Massive concentration of corporate wealth, strengthened by interlocking connections of one sort or another and the right of one corporation to acquire and hold the stock of another, is definitely a matter of public concern. The larger the business unit or a group of business units acting in concert, the greater is the impact of their business decisions on the welfare of our whole economy.

The matter is all the more serious in view of the fact that the true owners of the giant corporate enterprises-their stockholders scattered through the breadth of this land-exert for all practical purposes no influence on managerial decisions. When stocks are widely distributed, the average stockholder does not have much chance to do more than to sign mechanically the proxies sent to him by corporate management. By reason of this, corporate management no longer acts as a responsible agent of the stockholder, even if the latter is given the questionable privilege of periodically voting "yes" in favor of those in power.

The very existence of the giant business corporations, engaged in a variety of activities frequently unrelated in character, helps to develop and strengthen monopolistic tendencies in our economy. When the number of suppliers is small, or when a small number dominate the

In 1939, 4.900 firms, representing but one-tenth of 1 percent of the total number of business establishments in the United States, employed fully 40 percent of all workers (Department of Commerce). The 200 largest nonfinancial corporations controlled in 1937 around 45 percent of all corporate assets of the country, (TNEC Monograph No. 29. The Distribution of Ownership in the 200 Largest Nonfinancial Corporations, p. 4). 2 A recent study released by the Brookings Institution notes the present-day tendency toward the self-prepetuation of corporate boards of directors. Many of the directors are now selected either by the executives themselves or are placed on the boards at the insistence of such nonstockholding groups as the banks. (Robert A. Gordon, Business Leadership in the Large Corporation, pp. 119 fr.)