I respectfully refer the committee to the many citations contained in the memorandum brief filed by Mr. Connolly in support of this position. I respectfully submit that Mr. Courtney's meaning and interpretation of the law and the cases on this point are erroneous.

Despite the above, Mr. Pettibone advised the Senate Banking and Currency Subcommittee last week that the Commission undertook to "restate" the mandatory requirement of section 7 (b) (4) of the Disposal Act and I quote Mr. Pettibone's testimony in part:

Paragraph 4 of the Commission's Release No. 1 restated the requirement of section 7 (b) (4) of the Disposal Act calling for a statement of the price proposed to be paid for each facility.

By what authority did the Commission undertake to restate or change the mandatory language of the Congress of the United States? If paragraph 4 of the Commission's Release No. 1 means what Mr. Pettibone interpreted it to mean, then paragraph 4 is in direct contravention of the provisions of the act itself and such restatement of the law by the Commission was compleely and wholly unauthorized and has no force and effect.

However, what we are discussing here is the intention of Congress when it stated in section 7 (b) (4):

Proposals shall be in writing and shall contain, among other things the amount proposed to be paid for each of the facilities**

*

To find what was intended, let us again turn to the testimony before the Banking and Currency Subcommittee of the Senate and consider for a moment what the author of the bill in the Senate, Senator Capehart, had to say about what this provision means. I will now quote certain excerpts from the transcript of proceedings before the Subcommittee of the Committee on Banking and Currency in volume IV dated March 11, 1955, less than a week ago.

The quotations from the record are taken from the statement of Mr. Richard C. McCurdy, president of the Shell Chemical Corp., while he was testifying before the Senate subcommittee:

Page 490 record:

Senator CAPEHART. I want to know why did you not say, "I will give you X amount for one plant, X amount for another, and X amount for the other, and I will not buy any of them unless you will sell me all 3 of them, but if you will sell me all 3 of them, I will give this amount for this one, this amount for this one, and this amount for this one."

Mr. MCCURDY. I will give you that.

Senator CAPEHART. Why did you not do it?

Mr. MCCURDY. The reason we did not

Senator CAPEHART. That would have been complying with the law.

Mr. MCCURDY. That is right. There are two reasons that we did not do that, and they agree with one another. First, our bid is in line with the law, and our counsel assured us that the bid was all right legally.

Senator CAPEHART. It would not have cost you a penny more to have stated some price on each of the three.

Mr. MCCURDY. No, but I am going to show you why it would have been against my conscience if I could.

Senator CAPEHART. Is it always against your conscience to comply with the law?

Mr. MCCURDY. We did comply with the law.

Now, I know you want to know why. Any number of people have asked me in the last 3 days, "Why in the name of everything didn't you just put 3 figures on this thing and stop all this business?" Well, the reason that we did not do that was because those figures would have been empty and misleading. Those figures, had I done it, would have had to have been set arbitrarily. We did not

calculate figures for these three plants and then add them up. We figured the whole thing out as one piece.

Senator CAPEHART. But the rules and regulations and the law said that you must bid on each individual plant.

Mr. MCCURDY. Well, Senator Capehart, our legal counsel do not believe that. Those for the Commission do not believe that. And those for the Comptroller General do not believe that.

Senator CAPEHART. I was the author of the bill and I believe it. I so gave my word on the floor of the United States Senate. Now, I do not mind telling you right now that was my understanding then and it is my understanding now. Mr. MCCURDY. But you said, did you not, Senator Capehart, that they were going to be sold plant by plant?

Senator CAPEHART. Yes.

Mr. MCCURDY. Well, this is one plant.

Senator CAPEHART. Now, that is the question. If you prove to me

Senator DOUGLAS. Mr. McCurdy

Senator CAPEHART. If you can prove that to me

Senator DOUGLAS. Mr. Pettibone testified here that there was no question but what they were different plants. You heard Mr. Pettibone testify to that effectthat they were separate plants. The record will show they are separate. Senator CAPEHART. That does not hurt anybody's conscience.

Mr. MCCURDY. No, but in my opinion-and I am sure we will all agree-denationalizing the industry is a lot more intricate problem than selling something off. The intricacies of this problem in one of its most difficult cases caused us to come to this solution. I would really have been in a spot if my conscience had told me that I could not put those figures down and our lawyers had told me that I had to. Then I really would have been in a pickle. I would have had to choose between my conscience and my desire to bid, and that would not be fun. Senator CAPEHART. This conscience of yours is not quite clear to me. You were willing to pay 30 million for the 3 plants, but you had a conscience against saying, "Well, the physical value of this one is 17 million; the physical value of this one is 12 million; the physical value of this one is 10 million; but I withdraw my bids for all 3 unless you sell me all 3."

Page 515 record:

Senator FREAR. After your original bid of 27 million, you then went into a state of negotiation with the Commission, did you not?

Mr. MCCURDY. That is right.

Senator FREAR. I thought it was the understanding of the Commission that they would negotiate with the highest bidder when this state of negotiations started. If you did not put in a separate bid for each of the facilities, in your opinion how could the Commission have started negotiations with you?

Mr. MCCURDY. Well, sir, it was not that important to me that they negotiate with me. If they could not see the proposition on its merits and wanted to go negotiate it with somebody else, that was their business, but—————

Senator CAPEHART. Did the Commission ever ask you to break your bid down into three parts?

Mr. MCCURDY. Yes, they asked me to break my bid down into three parts once after we bid.

Senator CAPEHART. But they did not insist upon it?

Mr. MCCURDY. No.

Senator CAPEHART. After you had bid the 30 million or 27 million?

Mr. MCCURDY. In order that you should understand what went on, I believe that the Commission originally thought that we had assembled our bid by adding up three figures that we had already figured for the plants. We did not do that. It took us quite a while to make the Commission believe that we have not done that. After they found out that we had not indeed done that, then they realized, just as we had in the first place, that the breakdown would have been misleading and immoral.

Page 521 record:

Senator CAPEHART. You have not given me a very good reason yet in my mind as to why you refused to break this down for the Commission.

Mr. MCCURDY. I just did not want to mislead anybody by giving them a figure that they might think meant something but did not.

Senator FREAR. My final question is this

Senator CAPEHART. That would be at their peril, not yours, would it not?

Mr. MCCURDY. Yes, it would, but I did not want to play them a dirty trick. When I put a figure and sign my name to it, the figure is going to mean something.

Page 522 record:

Senator FREAR. What would you have done if this is a fair question to ask you-if the Commission had come to you and said, "We will not accept your proposal as a package deal unless you break it down to

Mr. MCCURDY. To individual pieces?

Senator FREAR. By plancor number; that you would stipulate a price for each, be it higher or lower.

Mr. MCCURDY. I have answered essentially that question before, that if my own lawyers had said that I would have had to choose between my conscience and desire to bid, and I do not know which would have won.

Senator FREAR. I do not know whether we can share all this about your conscience because Senator Capehart has a conscience, too, and I think the people who are going to have to make the final determination on this really want to be satisfied themselves.

Senator CAPEHART. My answer on the floor of the United States Senate was unequivocal. I simply said, "Plant by plant." At that time we meant it, and that was what we intended to do. And I am amazed that when you know the law-I had a case the other day of a constituent who had a pretty large bid for Government work came to see me, and he was the low bidder but he forgot to sign his bid, and under the law, he is out. There is no way in the world in which you can do anything about it. He just forgot to sign his bid, and when they were all opened up before everybody, he was the low bidder and would have gotten the contract but he forgot to sign it.

And they throw out bids every day because they do not bid on the specifications. Now, the specifications may be silly, they may be wrong, they may not seem to make sense, and it may hurt people's consciences to bid on something that they know is not as good as something else would be, but nevertheless that is the law and they cannot be making the law over, you know, every time they bid.

Mr. MCCURDY. Well, the statute does require the terms of the amount proposed to be paid and not the value assigned to the facility.

Senator CAPEHART. Well, we will get into it.

Thus we see that Senator Capehart has stated in plain and unequivocal terms what he intended by the language used. That the proposals would state the amount proposed to be paid, plant by plant, and I have an abiding confidence that the distinguished Congressman, the late Hon. Paul W. Shafer of Michigan, who was the author of the law in the House, would agree with Senator Capehart's interpretation if he were here.

And now reverting for just a moment to the other statement: Of course, the committee report recognized that the Commission would not be precluded from dealing with a lower bid as the basis of negotiations under certain circumstances ((id. pp. 13, 15); see also H. Rept. No. 1055, 83d Cong., 1st sess., p. 16-17 (1953)). But there is not even the slightest suggestion that the Commission would negotiate it if it did not know what the highest bid was on each facility.

If a lump-sum package bid is made without indicating the amount assigned to each facility, it is impossible for the Commission to be certain that it is negotiating on the basis of the "highest amount proposed to be paid for each facility" as required by section 16, supra. This is true even though the lump-sum bid may be higher in the aggregate than any combination of individual bids since allocation might reveal that bids for one or two of the facilities were lower than those submitted by other bidders.

Gentlemen of the committee, the distance to the Government is obvious. Unless the Commission knows at the outset of negotiations

the exact dollar difference between all of the bids on each facility it cannot tell whether to attempt to drive the lump-sum bidder up with reference to a particular facility or whether to try to drive up other bidders on that facility. In other words, it is conceivable that a lumpsum package bidder whose proposal is higher than any combination of individual bids might be negotiated upward even more if he were low on one or two facilities. Or if such a bidder were for some reason disqualified from obtaining all the plants he sought, the Commission by having his bid broken down as required by the act might be able to negotiate on a higher basis with individual plant bidders.

Now, there is one more point that I wish to direct attention of this committee to, on the question as to whether section 7 (b) (4) is mandatory. This is on page 8 of the old statement.

We call attention to the fact that with exception of Shell every successful bidder who proposed to purchase more than one facility specified an amount for each facility separately. To illustrate this very significant fact we call attention specifically to two instances.

The Standard Oil Company of California submitted a proposal of four different plants and stated:

Purchaser offers to pay the sum of $16,600,000 for all facilities defined in the proposal. The price proposed to be paid for each of the facilities except Plancor 611 on an individual basis is set forth in purchaser's alternative proposal. The price otherwise to be paid for Plancor 611 on an individual basis is $3,500,000.

And in addition thereto, an examination of Standard's proposal will show that the total aggregate amount which it proposed to pay for each facility separately totaled $16 million. In addition, Standard submitted a lump-sum package bid for all 4 of the facilities and offered to pay $16,600,000 under its combination bid, which amount was $600,000 in excess of the total of the separate amounts. This bid is in compliance with the law as well as the instructions.

Another illustration can be found in the Phillips Petroleum Co. proposal. Phillips bid upon two facilities. It specified the amount proposed to be paid for each facility separately. It stated its preference between the two facilities and, in addition, Phillips proposed to pay upon a lump-sum package basis for the two facilities an amount which was $1,001,000 greater than the aggregate amount proposed to be paid for the two facilities separately. This proposal is in accordance with the letter and the spirit of the law and followed the instructions.

We submit that it is significant that Shell is the only successful bidder who declined to follow the law and the instructions. It appears that the successful bidders in every instance, with the exception of Shell, understood and placed the same interpretation_upon the law and the instructions as we set forth in this statement. I am attaching to my statement a brief analysis of all successful proposals in substantiation of this fact.

And if you will turn to this very short analysis attached to this statement, you will find that every successful bidder who bid upon more than one facility broke his bid down as to each facility. For instance, Copolymer submitted a separate amount for each facility. Firestone submitted a separate amount for each facility. Food Machinery submitted a separate amount for each facility. GoodrichGulf submitted a separate amount for each facility. Goodyear sub

mitted a separate amount for each facility. Humble submitted a separate amount for each facility. Phillips submitted a separate amount for each facility. Standard of California very carefully broke their bid down to clearly indicate a separate and specific amount for each facility. United States Rubber submitted a separate amount for each facility. Shell Chemical Corp. declined to assign an amount for each facility.

(The material referred to by Mr. Blalock is as follows:)