that discounts extracted from suppliers and lower prices to consumers were both non-predatory and economically justified. Finally, the use of straight line projections to predict the expected monopoly power

of chains was fraught with risk. The FTC study much more clearly stated the facts with respect to this issue.

Current justification for the Act has been elicited by a number

of recent studies on the effects of Robinson-Patman. Two investigations

of the antitrust laws, the Neal and Stigler reports, 251/ raised doubts about Robinson-Patman's consistency with the policies in Those reports

favor of competition embodied in the antitrust laws.

triggered Congressional response in the form of a special subcommittee

to study small business and the Robinson-Patman Act. 252/

The most recent round of debate on the statute began with two Department of Justice draft proposals for reform of the Act, which were circulated in 1975 for the purpose of eliciting comments. As occurred in response to the Neal and Stigler reports, the House Small Business Committee established a special subcommittee, the Ad Hoc Subcommittee on Antitrust, The Robinson-Patman Act, and Related Matters, to respond to the proposals.

During December of 1975, hearings were held before the Domestic Council Review Group to gather facts about the effects of the RobinsonPatman Act, to consider proposals for change and to provide a forum for public response to the Department of Justice proposals.

Testimony given before the Domestic Council Review Group and

the House Subcommittee reveals a number of common themes in the

defense of Robinson-Patman.

251

White House Task Force Report on Antitrust Policy (1968) (the Neal Report); The President's Task Force Report on Productivity and Competition (1969) (the Stigler Report).

252/ Hearings on Small Business and the Robinson-Patman Act Before the Special Subcommittee on Small Business of the House of Representatives, 91st Cong., 2d Sess. (1970).

1. Protection of Competitors

Protectionism remains an explicit goal of some supporters. 253/

This law [the Robinson-Patman Act] has stood the
test of time. It has repeatedly been attacked and
after each encounter with its detractors, this
statute has emerged stronger than ever, and it
still stands as solid as the Rock of Gibraltar--
a bulwark of protection for the 9 1/2 million small
entrepreneurs of this great Nation of ours.

*

Mr. Gonzalez: Mr. Chairman, I might ask a
question. I certainly agree with you. I think the
small businessman, as Dr. Webb, Prescott Webb
defined it as a fellow who wasn't able to get

a lobbyist in his behalf in Washington. The small
businessman certainly needs congressional oversight,
continuous congressional oversight and protection.
I think that he is an endangered species...

254/

As has been shown, the Robinson-Patman Act was passed at a time when a number of factors combined to make protectionist regulation, rather than competition, seem a reasonable course for national economic policy. In the present, when public debate is focused on ways to untangle the web of regulatory legislation of that period, it is not surprising that those who would retain the Act attempt to disassociate Robinson-Patman from other depression-era legislation, such as the fair trade laws. Counsel for the National Small Business Association, in his testimony before the Review Group, made just such an attempt. 255/

253/ Testimony of Rep. Patman, Subcommittee Hearings, pt. 1 at 7.

254/

255/

Id. at 13.

Testimony of Thomas A. Rothwell, DCRG Hearings, Tr. 455.

The McGuire Act, anybody who asks or tries to compare
McGuire and Robinson-Patman is either ingenuous or, as

I said, an over-zealous advocate.

Any such assertion, however, must be weighed not only against the evidence

of similar purpose contained in the legislative history, but against the

admission of similar purpose expressed by that same organization in its defense

of the recently repealed fair trade legislation. 256/

Today there are only two statutes in our antitrust code
that give any protection to small business against the unfair
competition of giants. These are the Fair Trade laws and
the Robinson-Patman Act.

2. Maintenance of Equal Competitive
Opportunity for Small Businessmen

Support for the Act would continue regardless of the legislation's ability to protect small business interests. Without conceding that the Act may be unable to insure the survival of small business, supporters point out that it may nevertheless have the salutary effect of giving a psychological boost to the small businessman faced with competition from larger rivals. Its supporters argue that the existence of the statute may, in many cases, provide the encouragement which is needed if a small businessman is to enter into or remain in the admittedly hazardous occupation of retailing. In response to a question concerning the net benefit of the Act, one Review Group witness testified: 257/

There is a net benefit that a man who is struggling in
business and looks to the Government for help is going
to survive. In essence, that is what we are talking

256/ Prepared statement of the National Small Business Association, Hearings on H.R. 2384 Before the Subcommittee on Monopolies and Commercial Law of the Committee on the Judiciary House of Representatives, 94th Cong., 1st Sess. 153 (1975).

257 / Testimony of Philip 0. Friedlander, DCRG Hearings, Tr. 436.

about, at least our group is.

He may be only one guy employing twenty-five
people, but when he's got a problem, he has no
place else to go except to get an enforcement under
the current statutes, and that is what we are
objecting to because they are not being enforced
even when the dealer comes to Washington, takes the
risk and comes down here and nothing happens.

Similarly, one witness before the 1975 House Hearings testified that the Robinson-Patman Act has the beneficial effect of

promising small firms that the federal government is enforcing
fairness in the marketplace, giving the small businessman the
psychological boost which may be needed to motivate him to enter
into or remain in the marketplace. 258/

The survey documents another quasi-sociological
aspect, the value of Robinson-Patman enforcement in
improving morale of small buyers and encouraging them
to assert themselves in bargaining. Even in markets
where handicaps do not exist, small buyers might be
demoralized by the feeling of unjust handicaps in
bargaining, were it not for the reassurance provided
by the presence of Robinson-Patman enforcement. This
demoralization itself might substantially contribute
to socially disfunctional declines in the offerings of
the many varieties and variations to be found among small
firms, when it is often to these very firms that we must
look for innovation and provision of varieties and
variations in product and service alternatives.

Robinson-Patman Act supporters urge that the small businessman

is as efficient as the large, and needs only an equal opportunity to

compete with large companies.

For example, one small business repre

sentative testifying before the Review Group quoted from a study of

the food distribution industry: 259/

258/ Testimony of Robert C. Brooks, Jr., Subcommittee Hearings, pt. 1 at 429.

259/ Testimony of Donald A. Frederick, DCRG Hearings, Tr. 378.