so. The sworn testimony will be presented and it has been testified elsewhere to the fact that we were not advised, and on the contrary we felt we were lulled into a point of security on that. We think it was done deliberately, and under the circumstances we have no other inference.

Now, we submitted a bid and a bid was submitted by an outfit called Loveman's.

Mr. HOLIFIELD. You mean another business organization?

Mr. ROTH. Another firm which operates a store in Chattanooga. We do not know the exact details of what their conversations were with Loveman's. We do know that they had negotiations with Loveman's before, and we have information that they had negotiations and discussions with Loveman's even after the bids were in. That will be a matter for testimony, but I think from the facts that are here it will be perfectly clear what happened.

First, let me compare the two bids, which is a thing that is in issue. Mr. HOLIFIELD. Do you not think that you had better finish your testimony in regard to the manner in which you were treated, and the discrimination which you maintain was used against you, and continue that, and then get into the comparison of the bids?

Mr. ROTH. Well, the discrimination is right in the bids. We maintain that right on the face of the bids, there is no question about the fact that they took the lower of the two bids, and I want to explain that and show you just how that works out.

We have here the Loveman's bid dated December 12, 1949. It is addressed to Mr. Winfrey, the manager of the Roane-Anderson rental department, and I would like to read practically all of it, if I may, with your permission:

We propose to and submit our proposition subject to contractual negotiations in regard to leasing the department store in Oak Ridge now known as Taylor's, we propose to negotiate a contract with Roane-Anderson Co., acting as agents for the United States Atomic Energy Commission, on the basis of 4 percent of sales on the first $1,000,000, and 32 percent of sales between $1,000,000 and $2,000,000, and 3 percent of sales on over $2,000,000.

As evidence of our good faith in this connection, we propose to pay a minimum rental of $25,000 a year, such minimum to be charged against the percentages herein mentioned.

Further as a matter of qualifying ourselves in this connection, we consider the minimum rental as inconsequential and are only using it as evidence of good faith on our part, subject to reaching the proper contractual negotiations with you.

We would like to point out the reason we are offering such a low guaranty is due to the fact that we believe the department store which you have there now is being improperly and unsatisfactorily run for the benefit of the people of Oak Ridge. We would have to give consideration on our part, in establishing the proper facilities there, to the installation of a credit system

We would have to give consideration to the installation of a credit system

preferably the chargeplate system which we are using here. This one expense would cost approximately 2 percent of our sales. We would give further consideration

and this again is consideration

to the establishment of a delivery system, which would cost us about 11⁄4 percent; and also, we feel that we would have to use advertising and promotion, which will approximate us between 3 and 4 percent of our sales.

I am sure that you will realize as well as we do that the above facilities are not being offered now to the people of Oak Ridge.

Further, we would have to give consideration

again "give consideration"

to the establishment of a proper air-conditioning system for the building. So I am sure that you and your associates can see by test figures that on the basis of such percentage, we propose to negotiate a reasonable contract.

Our proposal is made subject to our reaching an agreement on the proper terms and conditions of the lease, and further subject to our reaching some definite agreement by January 1, 1950.

Further, it is understood between us that in the event we are able to get together on the lease, we will be able to occupy the building by March 1, 1950, or sooner. Now, let me point out these things about this bid: First of all, it merely states that they will give consideration to certain factors, nothing more. There is no commitment and no promise, or nothing. They state that it is conditioned upon reaching some definite agreement by January 1, 1950. The bids, according to our information, were not to be opened and were not opened, as far as we know, until after that; or if they were, we were only notified after January 10, 1950. So there must have been a further agreement, or if there was not, something is wrong. This bid is conditioned upon its being accepted and in force and effect by January 1, and we were notified that the bidding was not concluded until January 10, 1950. Mr. ELSTON. Your notice is in writing?

Mr. ROTH. It is a telegraphic notice, and there is no question about the fact, we received it around the 12th, and it was issued on the 10th of January. I have the telegrams here, but I do not think that there will be any question from the Roane-Anderson people on that.

Mr. HOLIFIELD. Will you specify again that particular telegram, the purpose of it?

Mr. ROTH. Just that particular telegram, I would like to present it. It was the award, announcing the award. It simply stated:

We are advising you that your bid is not accepted, and that it has been awarded to someone else.

Mr. ELSTON. What is the date of that?

Mr. ROTH. January 10.

Mr. HOLIFIELD. The cut-off date on the applications for the lease was December 15?

Mr. ROTH. Yes, this was in by December 15, according to the testimony, and so was ours in by December 15. There is no question about that.

Now, turning to our bid, if I may I would like to take the time to read our bid, which was dated December 12, 1949:

GENTLEMEN: We are handing you herewith three alternative proposals for leasing the premises on Jackson Square now occupied by us. Our purpose in giving you three proposals from which to choose is to make it possible for you to elect that lease arrangement which will permit us to give the community the type of store which you feel is desirable.

Up to the present time our operation has been circumscribed by two factors: (1) the shortness of our lease, and (2) the high percentage rent which our lease contract called for. These factors precluded our building patronage and prestige through any long-term program, and prevented us from rendering services of the type which cost money but build good will, and further prevented us from obtaining the most desirable tenants. In the past we could have interested better subtenants to operate some of the departments, but were unable to because our lease was too short and the percentage of sales they were asked to pay was too high.

Our present proposals are designed to permit us to get offering lower percentage arrangements and longer leases.

better subtenants by Even though we are

now faced with the prospect of competition from the new $5,500,000 commercial center (we are convinced that the community will not support two department stores), each of the three alternative proposals permits us to perform in varying degree part of the following program, varying from the minimum in proposal No. 1, to the maximum in proposal No. 3, under which proposal we would give Oak Ridge, subject to the limitations imposed by the size of the community, a real community department store.

1. Install air-conditioning.

2. Replace many of the leased departments with national operators whose merchandising ability is superior and mark-up lower than that of the existing leases.

3. Install new improved lighting, both overhead and counter.

4. Revamp, refurbish, and refinish the fixtures.

5. Install a centralized charge-account system for the charge departments. 6. Arrange for limited store delivery.

7. Engage in community-service activities and make our store an integral part of the community life.

Mr. HOLIFIELD. May I just ask you for a moment if you considered these seven points which you have outlined here as being included in any one of the three proposals which you made?

Mr. ROTH. They are all included in all three proposals. It is merely a question of how much money you spend over-all on them. Mr. HOLIFIELD. In proposal No. 1, you would do all of these things?

Mr. ROTH. We would have done all of them, except that we would have spent more or less money, depending on how much we would have net.

Mr. HOLIFIELD. There was no firm commitment as to how much money you would spend in any instance?

Mr. ROTH. In any particular instance, except under proposal No. 3, we specified, and I will come to that, a minimum of $50,000 for all of these. That is because proposal No. 3 is, in terms of amounts, the worst one, and I will come to that, and we had taken $50,000 out of rentals and reduced it in that way, and agreed to apply that. But I will clarify that as we go along.

Mr. HOLIFIELD. In your presentation here, are you going to pick any one of these three proposals in its entirety as being the one you wish to be considered against the Loveman's lease that was let?

Mr. ROTH. We think all three should be considered against the Loveman's lease.

Mr. HOLIFIELD. But each one will have to be considered separately. Mr. ROTH. Each one separately?

Mr. HOLIFIELD. Each one separately; and you will not pick one thing from one proposal and tie it to something else in another proposal?

Mr. ROTH. No; each one of these proposals is separate, and we believe all three of them are better than the Loveman's proposal. Mr. HOLIFIELD. Any one of the three is better?

Mr. ROTH. But certainly 1 and 2 are better, right on their face; and 3 requires some analysis in order to come to the conclusion that it is better. But we feel even that one is better.

The term: All of the proposals are for a 5-year term, with a 5-year option on the part of the concessionaire. All of the proposals are to embody a paragraph giving the concessionaire the right to terminate the lease in the event the operation at Oak Ridge is substantially reduced and the new projected commercial center opened.

Here are the proposals-you must bear in mind that Loveman's proposal was a minimum of $25,000, 4 percent up to $1,000,000, and 32 percent on the next million. And I might mention that, according to a report filed by the Atomic Energy Commission in answer to our complaints to Members of Congress and to this joint committee, the Commission mentioned the fact that they projected a maximum potential of $1,250,000, although the University of Tennessee report talked about the possibility of its being $2,000,000. They based their figures on page 5 of their summary statement; that is on 14 million dollars. Mr. ELSTON. Was Loveman's bid on the basis of a 5-year lease, too? Mr. ROTH. Yes; I think it was. I am trying to check to see whether it says so. I don't think that I find in the bid a specific statement to that effect.

As a matter of fact, I think, sir, that you have covered a point there that we have overlooked, which is that the bid itself—and this bid was not made available to us until recently-the bid itself does not contain the term. In fact, we do not even find a term in the bid. It is merely subject to reaching an agreement on proper terms and conditions. There is nothing firm at all about their bid, nothing whatsoever, that is, including the term.

Mr. HOLIFIELD. That is, as far as their letter is concerned. As to what negotiations they had and what they agreed to do in negotiation, you are not, of course, saying?

Mr. ROTH. No. But we are assuming one thing, and this is one of the points at issue. We feel, from all of the facts and all of the evidence that is in there, that it is clear that we were not treated on a parity with Loveman's.

Mr. ELSTON. Your contention is that your bid was absolute and final and the mere acceptance made a contract; whereas Loveman's bid was open to further negotiation, and a contract could not be completed unless they did negotiate and finally come to an understanding?

Mr. ROTH. I do not think that that could have been done legally, but for all practical purposes that was true. Ours was a complete bid in itself, or substantially complete; and theirs was substantially incomplete, and the Government would have had to sign some formal documents, of course.

Mr. ELSTON. The mere acceptance of your bid would have constituted a contract?

Mr. ROTH. Between private parties, it probably would have.

Mr. HOLIFIELD. Mr. Levitt, did you have something to add at this point?

Mr. LEVITT. Yes, sir.

Mr. HOLIFIELD. Will you give your full name for the record, please? Mr. LEVITT. My name is Stanley Levitt.

Mr. HOLIFIELD. Do you solemnly swear that the evidence or testimony you are about to give will be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. LEVITT. Yes.

TESTIMONY OF STANLEY LEVITT, REPRESENTING THE SUBCONCESSIONAIRES OF TAYLOR'S OAK RIDGE CORP.

Mr. LEVITT. I want to interject one statement here, and I do not want to take any time from Mr. Roth's testimony.

By the sworn testimony of Mr. Winfrey, assistant manager of the commercial realty department of Roane-Anderson Co., and this was sworn testimony before the Federal court of east Tennessee district on February 20, the entire

Mr. HOLIFIELD. What year?

MR. LEVITT. This year. The entire Loveman's proposal was encompassed by that letter which was just read to you by Mr. Roth, dated December 12, 1949. Mr. Winfrey was asked: "Are there any side agreements?" by our counsel, and this is what he stated on the stand, and he said, "No, sir."

And he was asked, "Are there any other verbal agreements?", and he said, "No, sir."

The counsel asked him, "Is, then, the Loveman's letter their complete proposal, in fact?" And he said, "Yes, sir."

Those are sworn statements before the court.

Mr. ELSTON. Was a lease later entered into?

Mr. LEVITT. At that time there was no lease, and there had been no lease signed.

Mr. ROTH. We do not know whether one has been signed.

ML. ELSTON. You do not know whether one has been signed yet? Mr. ROTH. At any rate, our term is stated:

All of the proposals are for a 5-year term, with a 5-year option on the part of the concessionaire.

Now I might mention this, that, in this letter from Loveman's, they minimize the meaning of the minimum guaranty and state that it is merely an evidence of good faith, and otherwise they would not put it in.

However, our guaranty is a minimum, as it will be seen, ranging from $25,000 to $45,000 over a period of 5 years, and we were backing our judgment up with an absolute guaranty, with money. We were willing to do it for a 5-year term and say so, and we didn't equivocate the way the Loveman's bid did, and they didn't say anything at all about the term there.

Mr. ELSTON. Did they make any point in the Federal court that your proposal was for 5 years and they did not want to execute an agreement for that long a period of time?

Mr. ROTH. I don't think that they did; no, sir. they were parties to the Federal court proceeding. by the Government itself.

Mr. KILDAY. Why did you make it 5 years? mation that you had received in the conferences?

I don't think that
That was handled

Was that the infor

Mr. ROTH. We wanted 5 years and they wanted 5 years, and they were told that they could give 5 years.

Mr. KILDAY. You say that they wanted 5 years?

Mr. ROTH. And we were willing to give them 5 years.

Mr. KILDAY. In your discussions, you agreed that you were talking about a 5-year term?

Mr. ROTH. We thought that we were, anyway.

Mr. HOLIFIELD. As a matter of fact, in the negotiations between the Roane-Anderson people and the applicants for leases, that fact was made known that there was a change in policy from the 1-year leases heretofore entered into to a longer-term lease, in order to give more stability to the business people there? That statement was made; was it not?