Rubber Manufatcuring Co., the Dunlop Tire & Rubber Corp., the Firestone Tire & Rubber Co., the B. F. Goodrich Co., the Goodyear Tire & Rubber Co., the Seiberling Rubber Co., United States Rubber Products, Inc. This was a triple-damage suit for conspiracy, brought by the Government, to fix the prices of tires on sales to the United States Government. The case was dismissed on technical grounds because the United States was not a "person" within the meaning of section 7 of the Sherman Act. And the Judiciary Committee of the House is now remedying that defect in the law. The complaint, however, showed identical bids for tires submitted to the United States Government to three decimal points.

One would be naive, if not foolish, to believe that disposal of these plants to these companies would satisfy the sine qua non we laid down in section 3 (c) of the Disposal Act, and which was referred to by President Truman, namely, to secure a program that would best foster the development of a free competitive synthetic-rubber industry. Have these companies reformed? I see no signs of regeneration. They have habitually repeated their sins not only in the United States but in Canada. A leopard does not change its spots. Suppose you were a businessman, and your supplier attempted to cheat you, as they attempted to cheat the United States Government. You caught him redhanded. You'd be rather foolish to deal with him again. Frankly, you would boot him out. Well, these companies were guilty of wrongdoing against the United States. Shall the United States now reward them for their wrongdoing? The sales to any or all of these defendants in these antitrust suits should be canceled out. Otherwise we are guilty of doubletalk. We speak out of both sides of our mouths if we at one and the same time say we want free, open, competition and at the same time we say turn over these plants to antitrust violators.

Further, section 17, subsection (1) reads as follows:

That the disposal program be designed best to afford small-business enterprises and users, other than the purchaser of a facility, the opportunity to obtain a fair share of the end products of the facilities sold and at fair prices.

Does anyone in his right senses say that these companies--and I say this despite the high regard I have for the chairman and the respect that I have for his opinions just as announced this morning— does anyone in his right senses say that these companies, if possessed of these plants, will help small-business enterprises? Their record proves to the contrary. Take a look at the list of the successful bidders, on page 8 and 9 of the report to Congress by the Rubber Producing Facilities Disposal Commission. With rare exceptions they are all huge companies. They are also huge users of synthetic rubber. They are going to supply themselves. They are not unselfishly going to cater to small-business enterprises, that is, small rubber fabricators. If rubber gets scarce they are going to husband unto themselves all the rubber they can produce. That was our history. The Aluminum Co., for example-we feathered their nest. We gave them every conceivable help and support. When the time came to divide the aluminum they produced small fabricators got the dirty end of the stick. There were 18,000 small aluminum fabricators, and about 2,000 had to die on the vine for lack of supplies from the large producers of aluminum, which we similarly helped during the war. They are go

ing to feather their own nests. All manner and kinds of subterfuges will be used to deprive the small fellows of a fair share of rubber. The little fabricators and manufacturers will die on the vine.

As far as I can see, there is no implementation of the declaration contained in section 17, subdivision (1). It is simply a pontifical declaration, with no sanctions for violation. There is no method of enforcement; it is simply a moral obligation.

And I understand the Deputy Attorney General Barnes appeared before the Senate Banking and Currency Committee yesterday, and from the New York Times I read that he said he was going to keep a watchful eye on this situation. What good is the watchful eye if it is not followed up by sanctions if there is a violation of the spirit or the letter, or both, of the law? There are no sanctions in the statute. And it doesn't do very much good for even the Attorney General to point out that these rubber companies have not abided by the spirit of the act. They will say "What of it?"

Antitrust violators do not usually abide by moral declarations. Take another look at the list of prospective purchasers. You will see that KYS Corp., one of the successful purchasers, is the only purchaser that really contains small operators. All the others are large or monolithic operators. None of these conditions make for fair dealing with small business and small fabricators of rubber, or make for fair dealing with the public, the consumers of rubber.

For these reasons I think this committee should ponder long and well before granting any approval to the sale of these plants. Conversely, as the law requires, the sales should be balked. I hope that this committee will negate the action of the Rubber Producing Facilities Disposal Commission.

We should separate the wheat from the chaff. Those who have not violated the law might well get the plants, but those who have violated the law should not receive these valuable plants from the Government with the tacit approval of this committee.

The CHAIRMAN. Thank you very much, Mr. Celler. It is always a pleasure for members of the committee to have the benefit of the views and observations of the distinguished chairman of the Judiciary Committee.

Mr. CELLER. Thank you, Mr. Chairman.

The CHAIRMAN. We appreciate it very much.

Now, members of the committee, the next witness is our distinguished colleague from Texas, Mr. Wright Patman, chairman of the Small Business Committee.

Mr. Patman desires to proceed now. The committee will be glad to hear from you.

Mr. PATMAN. Mr. Chairman, first I want to congratulate the chairman on the fine statement that he made. It clarifies the issues involved here.

Today at noon when the House meets I expect to introduce a resolution that the House of Representatives does not favor sale of the facilities that are recommended in the report of the Rubber Producing Facilities Disposal Commission. It would have been introduced yesterday, except for the fact that the House was not in session.

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The CHAIRMAN. Well, in connection with that I will say to the gentleman from Texas that under the law we have to consider it within 10 days.

Mr. PATMAN. And Mr. Yates

The CHAIRMAN. We will call that resolution up in the morning. Mr. PATMAN. Mr. Yates has been designated by the chairman of the Committee on Small Business to speak for the Small Business Committee against this disposal program.

I think he would like to talk this afternoon, as he is not prepared right now, because his statement has not been finished, I mean has not been mimeographed.

The CHAIRMAN. In that connection, we will have to set him down for tomorrow morning.

Mr. PATMAN. All right. I would like to

The CHAIRMAN. Wait 1 minute, now.

When you introduce your resolution, it will be referred to this committee by the House.

Mr. PATMAN. Yes, sir.

The CHAIRMAN. Of course, under the law it doesn't have to be acted upon by the Senate if it is disapproved in the House. One body controls in the matter if it acts contrary to what is recommended by the Commission.

Further, as I put out in my statement, it will be a privileged status and the committee will have a hearing on your resolution and will commence in the morning to consider it. When we reach a decision, we will report it to the House. And under the rules, it goes to the House and is called up and there is 10 hours general debate.

Mr. PATMAN. How many hours?

The CHAIRMAN. Ten hours general debate. It is only 1 hour if you are discharging the committee.

Mr. PATMAN. Oh, yes, that is right.

The CHAIRMAN. But when it gets into the House on the resolution, it will be 10 hours general debate, half of it controlled by those of the committee who are opposed to the resolution and half for those for it. In view of the fact that you are going to have a resolution, why not just wait until tomorrow morning?

Mr. PATMAN. And be heard on it?

The CHAIRMAN. And also Mr. Yates, and let the Commission go on, and let the Commission also comment on the resolution.

Mr. PATMAN. And I can be heard at that time?

The CHAIRMAN. Be heard tomorrow as the author of the resolution. Mr. PATMAN. Yes, sir.

The CHAIRMAN. Yes. You will get your chance.

Mr. PATMAN. My statement will not be long, probably not over 5 minutes. But I should be very glad to wait until a resolution is introduced.

The CHAIRMAN. I think, members of the committee-you see, this sale goes into effect on the 25th. And the House will have to act on it and we will all have to act on it between now and the 25th day of March.

We won't put the Commissioners on the stand until we take Patman's resolution. We will do that in the morning.

up Mr.

So there is nothing further to do now. We will take a recessMr. BROOKS. Mr. Chairman, before you recess, what have you in mind as to procedure, in other words, the timing? Take this up in the morning and try to dispose of it in the morning?

The CHAIRMAN. Well, if we finish with the hearing, I certainly want to dispose of it and make the committee's report to the House and then next week call it up on the floor of the House and get rid of it. Mr. BLANDFORD. (Aside.)

Mr. YATES. Mr. Chairman, if I may speak. If the committee would want to hear me at 2 o'clock today, I would be prepared to go on at 2. The CHAIRMAN. We can't. We have a bill on the floor.

Mr. YATES. I see.

Mr. SMART. The pay bill is on the floor this afternoon.

The CHAIRMAN. There is a complaint filed by the Minnesota Mining Co. We can continue this morning for half an hour, because we are going to recess at a quarter of twelve, so Mr. Kilday and all of us can go to the floor.

Well, let's take a recess now until tomorrow morning at 10 o'clock. We will hear the resolution and the Commission and everybody. (Whereupon, at 11:20 a. m., the committee adjourned until 10 a. m., Friday, March 11, 1955.)

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, D. C., Friday, March 11, 1955.

The committee met at 10 a. m., the Honorable Carl Vinson, chairman, presiding.

The CHAIRMAN. Let the committee come to order.

The purpose of the hearing this morning is to consider two resolutions, H. R. 170, introduced by Mr. Patman of Texas, and H. R. 171, introduced by Mr. Doyle of California.

Mr. Patman.

Mr. PATMAN. Yes, Mr. Chairman.

The CHAIRMAN. Members of the committee, we have the pleasure this morning of having Mr. Patman, who is the chairman of the Small Business Committee.

Mr. Patman, we are delighted to have you over here this morning. Now, take the seat right there.

Mr. PATMAN. Thank you, Mr. Chairman. I shall make

The CHAIRMAN. Wait 1 minute. Before you start, for the record, I want to find out-now, are you speaking in behalf of the Small Business Committee, and by direction, or are you speaking in your individual capacity as a Member of the House?

Mr. PATMAN. I am speaking as a Member of the House, and as chairman of the Small Business Committee, and for a majority of the members of the Small Business Committee.

The CHAIRMAN. Now, has it been brought up in the Small Business Committee?

Mr. PATMAN. We have not had an opportunity; yesterday at noon was the time that we were supposed to do it, but we couldn't do it yesterday at noon. We haven't had time to have a meeting. But I was assured by a majority of the members of the committee that I could speak for them. Each individually gave me their assurance.

In addition to that, I conferred with the ranking member of the minority before I made any announcement.

The CHIRMAN. Now, in speaking on behalf of a majority, you mean by that you consulted your Democratic colleagues on the committee, and you are authorized to speak for that group?

Mr. PATMAN. Before I did anything, I conferred with the ranking member of the minority, as I usually do. And after conferring with him I conferred individually with other members.

The CHAIRMAN. All right.

Mr. PATMAN. And I can state to the chairman of this committee that I am speaking for a majority, at the request of a majority of the members of the Small Business Committee.

The CHAIRMAN. All right. Now, proceed. Go ahead.

Mr. PATMAN. All right.

Now, Mr. Chairman, I will make a short statement, and Mr. Yates will speak for the committee, designated by me as chairman to speak for the committee.

The CHAIRMAN. Well, the committee hasn't officially acted on the matter. He is speaking for a majority of the committee.

Mr. PATMAN. That is right.

The CHAIRMAN. The committee has not officially acted?

Mr. PATMAN. That is right; the majority rules.

The CHAIRMAN. We understand.

Mr. PATMAN. The majority rules.

The CHAIRMAN. That is right.

Mr. BATES. Mr. Chairman, I suggest the names of the members who have authorized Mr. Patman to represent them be inserted in the record.

Mr. PATMAN. Don't you think that is going very far, Mr. Chairman?

Mr. KILDAY. Mr. Chairman

Mr. PRICE. Mr. Chairman

The CHAIRMAN. We will get along very well if everybody will be quiet.

Go ahead, Mr. Patman, and make your statement.

Mr. PATMAN. If I were permitted

Mr. KILDAY. Just a minute, Mr. Chairman. Let us see what the Chair means by his questioning.

Do I understand you are going to question the right of Mr. Patman to appear before the committee?

The CHAIRMAN. No, sir; not at all. That wasn't even intimated by any question of mine.

Mr. KILDAY. I am not too sure that it wasn't. What was the purpose of your statement whether he was appearing for the majority?

The CHAIRMAN. I just want the record to show that he is appearing in his capacity as chairman of the committee, and he stated he is not appearing on behalf of the committee by direction of the committee, but in behalf of the majority of the committee.

Mr. PATMAN. On my own responsibility, I state that I am appearing for a majority of the members of the Small Business Committee. The CHAIRMAN. That is right.

Mr. KILDAY. What I want to know is, are you going to require him. to corroborate himself by placing in the record the names of the committee he is speaking for?