memory, but the effect of it-and I would like to solicit your concurrence or disagreement, Mr. Courtney. The effect of it was that in the opinion of the Comptroller General, that if a bid were submitted for plants individually, a number, a price in dollars assigned to each plant and an aggregate of those prices for all of the plants, with a condition that if the bidder could not get all of the plants, it didn't want any of the plants-that the net effect of that type of a bid was that the bidder bid nothing for each of the plants or an aggregate if he could get them all. Do you agree with that or not?

Mr. COURTNEY. Well, I think that would have to follow.

Mr. COLE. Of course, doesn't it logically follow?

Mr. COURTNEY. As a matter of logic, Mr. Cole, I see no escape from that conclusion.

Mr. COLE. If a person puts a condition on a bid, the effect of which is that unless he can get them all for the aggregate price, then he doesn't want any of them-the effect of that bid is that he bids nothing for each of them or a definite figure for all of them.

Mr. COURTNEY. Well, Mr. Cole, may I-I fully concur in that. Mr. Connolly concurred in it. I concur in it, and the Comptroller General concurs in it.

Mr. COLE. Isn't that exactly what Shell did?

Mr. COURTNEY. May I point out, Mr. Chairman and Mr. Cole, that if my count is correct, substantially all of the persons here who are recommended as purchasers, bid on joint proposals. I have read through-and I am only quoting from memory now-I have read many of them, where two plants were bought by the same concern or the same group. In those cases the bids were a joint bid. While the amounts were allocated to the different plants, it was stated firmly that the proposal would only be considered by the bidder, if you please, on the basis of the total amount.

Mr. PRICE. Mr. Chairman, may I just ask one more question?
The CHAIRMAN. Mr. Price.

Mr. PRICE. Mr. Courtney, how do you get around this phrase of a bone fide proposal, when it certainly can't be considered a bona fide proposal?

Mr. COLE. Certainly, it is a bona fide proposal.

Mr. COURTNEY. It is a bona fide proposal, for 3 plants or 2 plants, as the case may be. But it isn't

Mr. PRICE. As applied to individual plants, it would be a bona fide proposal.

Mr. COURTNEY. Yes, sir.

Mr. PRICE. If you offered nothing for it.

Mr. COURTNEY. Well, they don't offer nothing for them. They offered to take three.

Mr. PRICE. That is the effect of it.

Mr. COURTNEY. Or two, as the case may be.

Mr. PRICE. The effect of it is that you offer nothing for it.

Mr. COURTNEY. If you want to carry it to its logical conclusion, as the Comptroller General has said, that is where you get.

Mr. PHILBIN. Doesn't the statute require that they should be bid plant by plant? How are you going to get behind that? Who is going to determine that, the Comptroller General or some attorney for the Government agency or the authors of the bill and the Congress?

You are probably familiar with this, as you sat here listening to the reading of Senator Capehart's testimony.

Mr. COURTNEY. Yes, I did.

Mr. PHILBIN. In which he expressly said that he intended that these bids should be accepted plant for plant. How are you going to get around that? That is a direct statutory provision. How are you going to get around it?

Mr. COURTNEY. Well, Mr. Philbin, I should answer that by saying of course that any Member of the Congress has a right to express his opinion and interpret his views in voting upon the law. However, remember this law represents the concurrence of both the House and the Senate.

Mr. PHILBIN. Don't you think that that is some sort of very strong evidence on the question of congressional intent?

Mr. COURTNEY. I am sorry. I think it is informative, but I don't believe it is controlling.

Mr. PHILBIN. Of course, I don't see any question at all of offer and acceptance here. I don't know why that should be injected into this controversy at all. It is merely a question, as I see it, of whether or not this statute has been complied with in the submission of these bids. That is the only question I see here. I think it is a very simple one. But I think there are some very serious questions that have been raised as to whether there has been compliance.

Mr. COURTNEY. Well, may I point out, Mr. Philbin, that that is the burden of my discussions with the committee. I have only been asked to state my legal opinion to the committee as to whether or not this is a mandatory statute, and I hold that it is a direction to the Commission.

Mr. PHILBIN. I understand that.

Mr. COURTNEY. And it is for the Congress to say whether the Commission has fully or completely complied with its direction. It may waive anything in the statute that it chooses as to the directions it gives to the Commission; no rights inhere in the bidders.

The CHAIRMAN. Now

Mr. BROOKS. Will the gentleman yield there?

Mr. PHILBIN. Yes.

Mr. BROOKS. I want to ask you this, in reference to the construction of the word "shall," as to whether it is permissive or mandatory. What would you do with the stipulation that requires the deposit of 22 percent, in either cash or Government bonds. Is that mandatory or is that

Mr. COURTNEY. I think it could be waived, Mr. Chairman-Mr. Brooks. And commonly percent provisions of that kind which are not complied with are held to be irregularities. We have situations of that kind.

Mr. BROOKS. You think that is permissive, too, do you?

Mr. COURTNEY. Let me finish. We have situations of that kind where the requirement is for the deposit of a bid bond at the time a bid is presented, and the Comptroller has, immemorially, has ruled and the Government has taken the bid most favorable to the Government under those conditions and permitted the filing of a bid bond after the bids were opened. That was held to be an irregularity because the prime concern, says the Comptroller, is the protection of the Government.

Mr. PHILBIN. Does the gentleman yield?
Mr. BROOKS. You have the floor.

Mr. PHILBIN. May I ask one further question, Mr. Chairman?
The CHAIRMAN. Mr. Philbin.

Mr. PHILBIN. Supposing, Mr. Courtney, that none of these proposals were in writing, do you think that would have satisfied the requirements of the statute?

Mr. COURTNEY. I think the Congress could waive it.

Mr. PHILBIN. You think the Commission would have authority to waive it?

Mr. COURTNEY. Yes, I think they could

Mr. PHILBIN. You think the Commission could have the authority to waive the requirement that any of these bids should be put or any of these proposals should be put in writing?

Mr. COURTNEY. I think the Congress is the final arbiter of whether or not, and this is the point-the Congress is the final arbiter of how the Commission has performed its work.

Mr. PHILBIN. Well, I think that that is true.

Mr. COURTNEY. Subject to the criteria it has set.

Mr. PHILBIN. My question was addressed to the point of whether or not, if none of these proposals had been required by the Commission to be in writing, whether that would conform with section 7. The CHAIRMAN. I suggest to all the members-

Mr. COURTNEY. I think that would be an irregularity.

The CHAIRMAN. I suggest that all the members of the committee read most carefully the Comptroller's opinion and the logic and the way he arrives at his conclusions.

Mr. GAVIN. Mr. Chairman.

The CHAIRMAN. All right, Mr. Gavin.

Mr. GAVIN. Mr. Courtney, did all the interested parties have an opportunity to submit a proposal on these respective plants to the Commission?

Mr. COURTNEY. Well, now, I can only depend on the Commission's report, and it is my understanding from the Commission's report that all parties were negotiated with.

Mr. GAVIN. Were all what?

Mr. COURTNEY. All of the parties who have been mentioned here, including the two who protested, were negotiated with at some point. Mr. GAVIN. Then, I assume that the Commission did enter into negotiations after all proposals had been received? Evidently they had, because the Commission, as I understand, increased through their negotiations the original offer of $27 million to $30 million, is that right?

Mr. COURTNEY. That is what the Commission's report shows.

Mr. GAVIN. Well, evidently they then, in those negotiations, did consider other bids that had been submitted for these respective plants, to enable them to negotiate to the extent that they secured an additional $3 million, is that right?

Mr. COURTNEY. Yes. I think Mr. Connolly testified, and his prepared statement shows, that the bid of Minnesota Mining, for example, was, in the negotiations, increased substantially.

Mr. GAVIN. Now, for my own information, would the Commission call in those other individual corporations who had submitted pro

posals to attempt to negotiate with them on the respective plants in: which they were interested?

Mr. COURTNEY. Well, if I read the report correctly-and of course the Chairman of the Commission would have to be the one to saybut my understanding from the report in reading it was that all persons were negotiated not once but a great many times until the final figures were arrived at.

Mr. GAVIN. That is the point I am trying to make. If all interested parties were given an opportunity to negotiate with the Commission to submit what would be the high bid, and after that had been determined, then the Commission arrived at a recommendation of this particular proposal from this company.

Mr. COURTNEY. That is my understanding of the report.

Mr. PRICE. Mr. Chairman, just one point. The gentleman from Pennsylvania wants information on that subject. I think that is one of the points at issue.

Mr. GAVIN. That is what I would like to find out.

The CHAIRMAN. I suggest all the questions of the gentleman from Pennsylvania propounded to Mr. Courtney should be addressed to Mr. Pettibone, who will be on the stand with the other members of the Commission as soon as we get through with Mr. Courtney and they are very pertinent questions and we have more questions to ask Mr. Pettibone and his Commission. But those are questions, in my judgment, that should be addressed to him.

Mr. PRICE. But I think we can answer the question of the gentleman from Pennsylvania without Mr. Pettibone.

The CHAIRMAN. All right.

Mr. PRICE. That is one of the points at issue. They were never ableto negotiate for a single plant as against the Shell bid because there were no bids on single plants by Shell.

The CHAIRMAN. Well, we will get to that.

Mr. GAVIN. I think if the gentleman listened to the testimony of Mr. Courtney, who pointed out what could happen, that the corporation submitting that proposal had offered a dollar or $50 or $50,000 for plant 1 and 2 and then $26,800,000 or $900,000 for the other plant, it would have been conforming to the technicalities set upThe CHAIRMAN. Members of the committee

Mr. CUNNINGHAM. Mr. Chairman, at that point may I ask one question?

The CHAIRMAN. Mr. Courtney is going to be here with us all the time. Can't we proceed and take Mr. Courtney a little bit later and get this thing running back on the track?

All right, go ahead.

Mr. CUNNINGHAM. Mr. Courtney, assuming that your interpretation of the meaning of the word "shall" is correct, that it is only a directive, then under the authority granted by Congress to the Commission that it be interpreted as a directive, do you consider that the Commission would have the right to accept any bid that was not a bona fide bid, that is, to accept, say, $1,000 for each of three plants and in order to get by with the directive? Do you think that was the intent of Congress?

Mr. COURTNEY. Oh, no. Assuming the $1,000 in the case you put was the highest bid of all

Mr. CUNNINGHAM. (Nods.)

Mr. COURTNEY. The Commission is enjoined by section 17 to accept the highest amount if, in the opinion of the Commission, the highest amount proposed to be paid was a bona fide proposal.

Mr. CUNNINGHAM. What I am getting at, Mr. Courtney: Was there anything inequitable in what was done? That is what I am trying to find out.

Mr. COURTNEY, Well

Mr. CUNNINGHAM. I think that is what this committee wants to know.

Mr. COURTNEY. I think

Mr. CUNNINGHAM. After all, we are the last arbiter, you say. We can judge this under the rules of law, the rules of equity or under our rules.

Mr. COURTNEY. That is what Mr. Blalock concedes and what I fully concede. That is one point of very substantial agreement.

The CHAIRMAN. Now, members of the committee, I want to ask that-when we convene at 2 o'clock, we are going to have the purchasers, the 11 purchasers of the copolymer plants. I prepared last Saturday a series of questions which gets right down to what small business is going to get from each individual and whether they consider this commitment legally binding. I will start off this afternoonif anyone wants to ask any questions at any time of Mr. Courtney, we will bring him back and go over what Mr. Courtney said. There is no intention to cut anybody off. We have these people here. They have all been requested to come here. And I would like Mr. Blandford to give each member of the committee and put on each one's desk the series of questions we propose to have answered. I want the record to show what small business is going to get.

It was pointed out in Mr. Yates' testimony that from the way he calculated, the small business would only get 88,000 long tons a year. I have been going on the assurances from the commitments guaranteeing to small business at least the amount they were receiving now, or 127,000 long tons.

So I am going to ask each one of these gentlemen who purchase these plants to come here and tell us exactly.

There are 13 questions. I trust all of them will be back here at 2 o'clock and get the answers. Because we will add up our own blackboard and find out the situation.

(Whereupon, at 12 noon the committee adjourned until 2 p. m.)

AFTERNOON SESSION

The CHAIRMAN. Let the committee come to order.

Now, the first witness this afternoon, when we consider these two resolutions, No. 170 and No. 171, is the distinguished Assistant Attorney General, Judge Barnes.

Is the judge in?

Mr. BLANDFORD. I don't see him out there, Mr. Chairman.

The CHAIRMAN. Well, while we are waiting for the judge, we will start in with our questions that I circularized to the industry. Let's see what progress we can make on that.

Now let's see who is our first witness, please.

Mr. BLANDFORD. (Aside.)