Mr. GLUCK. Generally the Darling Shop.

Mr. HOLIFIELD. Your operation in those places is a specialty operation and not a department store operation?

Mr. GLUCK. Generally they are specialty shops with some subtenants in them.

Mr. KILDAY. Primarily women's clothes and accessories?

Mr. GLUCK. Women's and children's. In Salt Jake City, we have a department store operation, Wallace's Department Store, in Salt Lake City, a larger operation than this one.

Mr. ROTH. We operated this for 3%1⁄2 years. We did a volume that was substantial. We have subconcessionaires who are local people and the majority of them were satisfied, anxious to stay in and were making a living. This was not a case of absentee operation, and by the way, examination of Loveman's will find that they themselves are out offering about seven subconcessions in departments as well. They, too, are not a full integrated department store. There is a very serious question as to whether that kind of operation is better than this.

We know Mr. Levitt, running his book and drug department, and drug department and book will work day and night, and hire a man in his place in the department store and see whether you are sure of getting that kind of service. There is a very serious question whether our technique of concessionaires is better for the town, quite apart from fostering a good old American concept of small independent. businessmen which we are interested in.

Mr. ELSTON. Mr. Wilson made the statement that you were sued a number of times down there.

Mr. ROTH. I never heard about any suit down there. I am general counsel. Why did he not produce the records? He comes in here and testifies and says the court records are full of them, and does not produce one. Is his testimony worth anything? Why didn't he bring the court record in here?

Mr. ELSTON. As counsel for your company, you have no recollection of any suits?

Mr. ROTH. Never heard of one, and it may very well be that there have been disputes of one kind. Remember, at the very beginning of this thing we were putting together a business, and it was done, and it went through a period of jelling. Maybe there were and they were paid promptly. Some delays for questioning a bill. We have had experience in outlying people where people have sued us unfairly and improperly because they could take advantage of a rich New York company.

Mr. ELSTON. That is nothing unusual but the impression he attempted to give was that the records down there were replete with suits against you.

Mr. ROTH. He is a member of the bar, and he knows better than to say that without coming here and producing 1 or 20 or 50, if he can do it. I don't know about that. I never heard of him as general counsel of the company, and I have been for 15 years.

The question boils itself down to one of action. We feel very strongly that the action of this group of men in signing this lease, this Loveman's lease, and right to this minute we have not seen it, in signing this lease on March 11, when they knew on March 7 that

there was going to be a hearing here, was not in good faith. We would have to be very naive to assume that just to say they were not in the ordinary course of business. On January 10 they made this alleged decision. That was no decision comparing these two documents, and by the way, our bid was not prepared by a lawyer, by me. Contrary to what he says, he does not know that it was prepared by a lawyer, If it was, it would be different from what it is. It was not prepared by a lawyer.

The Loveman's bid must have been prepared by a lawyer because it has all of the outs in it that a lawyer would put into it. If I had prepared it, it would be like the Loveman's periods, that we were considering this and that and the other. They were not restrained until around the 1st of February. The local court in another county issued a restraining order. It was over a week end and that was not served on them for a few days. They had 10 or 15 days, 20 days possibly in which to execute this lease. They didn't do it. All of the complaints poured in. As a matter of fact, they were not restrained from executing the lease. They were restrained from kicking us out, or agreeing on the terms.

Now, then, the restraining order was removed on March 2. Between March 2 and March 7, they could have signed the lease. I don't think that we as people of common sense have the right to assume anything but that a hurried action like that was in bad faith, and for the purpose of precluding anything on the part of this committee to take action.

We feel that these hearings should not be closed, that Loveman's should be brought here, that members of the AEC before whom we put this matter should be brought here, and that the fraud that has been perpetrated on the committee itself, on the Commission itself, should be investigated, and that on that basis, the top level members of the Commission have a right to and a duty to withdraw from this lease, throw the matter open again for reexamination and study, and let us go in there and fight it out as a matter of sound business sense. Mr. HOLIFIELD. We are going to have to close. The House is in session at this time, and we have no authority to meet while the House is in session.

The committee will take under consideration the testimony that has been given before us the last 2 days, and will make a statement tomorrow as to whether this investigation will be closed with this meeting, or whether additional evidence is desired.

At the present time we do not have time to have an executive session and discuss this matter, but we will try to make available to you gentlemen a statement from my office by 5 o'clock this afternoon as to whether additional hearings will be held in the meantime.

Is there anyone present from Oak Ridge other than those that have testified who wishes to testify on this matter?

(No response.)

Mr. HOLIFIELD. We will consider that all that have testified at this time, and that wish to testify, have been heard, and close the hearing at this time.

(Whereupon, at 12:15 p. m., the hearing was closed.)

63888-50- -7

APPENDIX
EXHIBIT 1

(Referred to on p. 3)

CONCESSION AGREEMENT BETWEEN TAYLOR'S OAK RIDGE CORP. AND ROANE-ANDERSON CO.

DEAR SIR: Enclosed please find your signed copy of Concession Agreement RA-24C covering the operation of a Department Store at Oak Ridge, Tennessee. Also enclosed is your signed copy of Rental Agreement RA-24C-ER1, covering Government-owned equipment on rent which was signed by your Mr. Frank J. Skurka. Copies of executed Schedules "A" to be attached to the agreement in future will be mailed to you.

Yours very truly,

AC/km

Enc.

FWC 10/24

Prime Contract No. W-7401-eng-115
Concession Agreement No. RA-24C
Dated: July 9th, 1946

AGREEMENT FOR CONCESSION AT OAK RIDGE

Agent: Roane-Anderson Company, Oak Ridge, Tennessee.

Name and Address of Concessionaire: Taylor's Oak Ridge Corporation. Incorporated under the laws of the State of Tennessee and trading at "Taylor's", of Oak Ridge, Tennessee, a wholely owned subsidiary of Darling Stores Corporation, a New Jersey Corporation, whose address is 370 Seventh Avenue, New York City, N. Y.

Type of Concession: Department Store.

Premises: Group 2, Building No. 4, Shop No. 101 on Broadway, and warehouse space consisting of the former E. A. T. Store Building, Baltimore and Miami Avenue, Gamble Valley, Oak Ridge, Tennessee.

Consideration: Six (6%) percent of the gross receipts of all business transacted at said locations.

This agreement, made and entered into this 9th day of July, 1946, between the Roane-Anderson Company, a corporation organized and existing under the laws of the State of Tennessee, of Oak Ridge, in the State of Tennessee, hereinafter called the "Agent", executing this agreement, and Taylor's Oak Ridge Corporation, incorporated under the laws of the State of Tennessee, (with the Darling Stores Corporation, a New Jersey corporation, whose address is 370 Seventh Avenue, New York 1, N. Y., as guarantor) trading as "Taylor's" of Oak Ridge in the State of Tennessee, hereinafter called the "Concessionaire”; Witnesseth that:

Whereas the Agent has heretofore, to wit, on the 14th day of February, 1944, effective as of the 23rd day of September, 1943, entered into a contract, herein

after called the "Principal Contract", with the United States of America, hereinafter called the "Government", to grant concessions for the operation of community retail sales and service establishments, among other things, at Oak Ridge, Tennessee, for the Government, and

Whereas the Agent is authorized under the aforementioned contract to enter into this Agreement and to permit the Concessionaire to use certain part or parts of Government-owned buildings and utilities.

Now, therefore, the parties hereto do mutually convenant and agree as follows: 1. Term of Concession.-The Agent grants to the Concessionaire, for the period commencing on the 1st day of September, 1946, and ending on the 31st day of August, 1947, the privilege of conducting a General Retail Department Store for the sale of ready-to-wear, shoes, millinery, dry goods, notions, novelties, and such other departments for the sale of items usually sold in department stores, in the premises described as Shop 101, Building 4, Group 2 on Broadway, and the building formerly known as the E. A. T. Stores located on Baltimore and Miami Avenue, Gamble Valley, two Government buildings at Oak Ridge, Tenneessee, as outlined in red on the plans attached hereto (marked "Appendix A❞ and "Appendix C" respectively) and made a part hereof. It is understood and agreed that the building located in Gamble Valley shall be used for warehouse space only.

2. Consideration Statement.-The Concessionaire agrees to pay the Agent as compensation for this concession Six (6%) percent of the gross receipts (exclusive of excise and luxury taxes), from all sources derived from the operation or maintenance of said concession, and every part thereof, at the close of business on the last day of each and every month during the term of this Contract. Gross receipts are defined to mean gross receipts less refunds to customers for merchandise returned and shall not include any luxury, excise or sales tax levied by either the Federal, State or local Government, and collected separately from the customers. The Concessionaire shall, within fifteen (15) days of the close of business on the last day of each and every month during the term thereof, state, render and deliver to the Agent a statement in writing, sworn to by the Concessionaire, showing in detail the gross receipts derived from the Concession during the month preceding the delivery of such statement. All sums due hereunder shall be paid to the Agent in the form of Cash, a United States Money Order, Certified Check, or Cashier's Check, made payable to Roane-Anderson Company.

3. Records, Accounts, Inspection and Audit-Payment.-The Concessionaire shall at all times during the term of this Agreement, keep at the said premises accurate books, accounts, records and receipts showing the gross sales and gross receipts of the Concessionaire's business conducted on the premises, and he shall preserve the same until final adjustment hereunder shall have been made. The Agent, the Government, or both, shall at all times have the right to inspect and audit said books, accounts, records and receipts of the concessionaire. Default on the part of the Concessionaire to state, render and deliver sworn statement of gross income, and to make payment of compensation, as herein provided, within fifteen (15) days from the date such statement and payment are due, shall be sufficient grounds for the revocation of this agreement by the Agent.

4. No Warranty as to Profit.-The Agent does not by this Agreement warrant or assure the Concessionaire in any way whatsoever that a profit can be made hereunder.

5. Stock, Services and Prices Therefor.-The Concessionaire shall keep in stock for sale sufficient quantities of merchandise used in the conduct of his business as in the opinion of the Agent shall meet the requirements of the residents of Oak Ridge, and the Agent shall have the right to regulate the quality and prices charged for the merchandise and services to such degree as may be necessary to prevent excessive charges to said residents. The Concessionaire shall submit to the Agent when requested by him, samples of the merchandise sold or to be sold and his records and accounts for examination and audit. In general, the prices charged by the Concessionaire for the various items sold or services rendered by him, shall not exceed the prices charged by similar establishments situated in Knoxville, Tennessee. The Agent shall have the right to regulate prices within the limits indicated above and shall also have the right to deny to the concessionaire the privilege of selling any specified articles whose sale is deemed inimical to the public welfare, or to restrict the classes of merchandise to be either handled or sold, or both, by the concessionaire. Failure on the part of the concessionaire to comply with the requirements as provided herein shall be sufficient grounds for the immediate termination of this Agreement by the Agent. 6. Stock, fixtures and equipment to be installed.

A. The Concessionaire shall install all stocks, fixtures and equipment necessary, in the opinion of and approved by the Agent, to establish, operate and conduct the business aforementioned in the said premises, and shall operate and conduct said business at least Eight (8) Hours of and on each generally recognized business day. B. It is understood and agreed that the Concessionaire shall install fixtures at a minimum expenditure of $50,000. Fixtures as used herein are defined to mean show cases, racks, wall pieces, carpets, lighting fixtures (other than those installed by the Government), chairs, divans, tables, furniture and similar items usually found in department stores. The Concessionaire agrees to carpet the premises in those sections of the store specializing in women's and children's ready-to-wear, a "French Room" or salon, and a shoe department.

C. In the event that this agreement is terminated prior to the expiration of 24 months operation, for any cause beyond the control of the Concessionaire, the Agent agrees, upon request of the Concessionaire, to purchase said fixtures, in part or in whole, subject to the following terms and conditions:

1. Upon the completion of the installation of the fixtures by the Concessionaire in the premises, a sworn statement together with proper receipts shall be delivered to the Agent establishing the actual net cost of said fixtures to the Concessionaire. An inventory of the fixtures shall be attached to said statement.

2. A depreciation charge of four and one-sixth (4%%) percent of the net cost of the fixtures shall be deducted each and every calendar month up to a total of 24 months. The purchase price to be paid by the Agent for said fixtures shall be determined by multiplying four and one-sixth (4%%) percent of the net cost by the number of months required to bring the total of operating months to 24.

3. On August 30, 1948, the entire fixture cost shall be assumed to have been amortized by the Concessionaire and no further obligation to purchase shall be considered by the Agent.

7. Insurance.-The Concessionaire shall carry a public liability insurance policy, in such amount and with such carrier as shall be approved in writing by the Agent covering injury to person or property, or death to persons who may be injured or killed in and about the space used by the Concessionaire. The Concessionaire shall also be required to comply with the statutory requirements concerning workmen's compensation insurance. Such liability and workmen's compensation insurance policies shall not be cancellable without 10 days prior notice in writing to the Agent.

8. Police and fire protection.- The Government and the Agent shall use reasonable diligence in providing police and fire protection for the property of the Concessionaire, located at Oak Ridge, but shall not be liable for loss or damage to any of his property from any cause whatsoever.

9. Sewage Disposal-Water, Heat and Electric Current.-Subject to the limits of available supply, interruptions while making necessary repairs, changes or installations, and conditions over which the Agent has no control, the Agent shall supply to the Concessionaire necessary sewage disposal, water, heat and electric current. Heat for the premises described as the former E. A. T. Stores building, Baltimore and Miami Avenue, Gamble Valley, as used herein, is defined to mean the heating unit only. The operation of the heating unit and the furnishing of fuel for said Gamble Valley Building shall be the responsibility of the Concessionaire.

10. Alterations, Additions and Improvements.

A. The Concessionaire shall make no alterations, additions and improvements in the premises without a prior written approval of the Agent. All alterations, additions and improvements which may be made by either the Concessionaire or the Agent, or other party or persons and which are in any way attached to the floors, walls, or ceilings, shall become the property of the United States, and shall remain upon and be surrendered with the premises as a part thereof without disturbance, molestation or injury at the expiration or earlier termination of this agreement.

B. An entrance door shall be placed in the northeast corner of the premises, which entrance shall conform to the present entrances of other stores on the street at no expense to the Concessionaire. The exterior of the premises shall be painted by the Agent at no expense to the Concessionaire. The interior of the premises shall be painted with one coat of white paint by the Concessionaire. The cost of such interior painting shall be credited to the rental account of the Concessionaire upon the submission of receipted bills to the Agent. In no event shall the sum credited to the rental account of the Concessionaire exceed the sum of Twenty-five Hundred ($2,500.00) Dollars. Any other alterations shall be the responsibility of the Concessionaire.