The Independent Bankers Association is opposed to holding-company banking, to the extension of branch banking. Both of these types of multiple banking have much in common as to substance, differing only in corporate structure. Both systems collect banks, set their policy and their direction from the head office, and make their subsidiaries less personal institutions than the independent bank.

No one in the Congress would advocate the direct destruction of our independent banking system. This system of banking has rendered the Nation a great service. It has stretched from the big cities to the small hamlets, performing well in both places.

Independent banking now is in grave danger; the gravest, perhaps, since Nicholas Biddle and his Second Bank of the United States, with its chain of banks, became so powerful that he became abusive and ran smack into that indomitable man, Andrew Jackson. Perhaps we need another Old Hickory.

While no one would openly advocate destruction of independent banking, it is being weakened by bank holding companies, branch banking, and mergers. Mergers beget branch banks. When two banks merge, the resulting bank usually gets permission to establish a branch in the office of the bank that was taken over.

The history of this merger movement, this consolidation movement, the number of banks that have been taken over, has all been recorded in past hearings of this committee.

The record shows how mergers have been increasing, how old and honored names of banking institutions have disappeared, how the control of bank deposits has increased percentagewise, through our great banks absorbing more and more lesser banks. It is an unhealthy sign. It is a concentration of banking power that should be feared greatly.

The only thing we would take exception to in this bill is on page 2, line 14. We quote:

Where the combined capital, surplus, and undivided profits of the acquiring and acquired corporations are in excess of $10 million.

We believe this figure should be placed at $1 million. Our primary interest in this legislation is its effect upon banking mergers. In the Ninth Federal Reserve District, in which I live, there are only 3 banks with a capital structure in excess of $10 million.

The Ninth Federal Reserve District covers a small portion of Wis consin and Michigan and the States of Minnesota, North and South Dakota, and Montana.

In Wisconsin there are only 3 banks with a capital structure of over $10 million. There is 1 in Nebraska and 1 in Iowa. Therefore, to stop this merger trend that could take place in these States, the $10 million figure is too high.

To sum up H. R. 2143 proposes a number of necessary requirements if the merger wave is to be halted. Prior notification of corporate mergers is logical and fundamental and in the interest of respectable businessmen. Giving the Attorney General the same footing as the agencies in enforcing the act is of great importance. The denial of the sole administering authority to the three Federal supervisory banking agencies will have a wholesome effect. With the Attorney General

breathing down the necks of these agencies, we can, I believe, expect action that will show sharply the growing trend toward more bank

mergers.

Thank you, Mr. Chairman and members of the committee, for the privilege of appearing before you.

The CHAIRMAN. Thank you, Mr. DuBois. You have been very helpful to this committee. I want to say in reference to the $10 million figure that is only for the purposes of the present legislation. That does not mean that if the merging banks' total capital is $2 million, that the Department of Justice could not proceed. They could.

Mr. DUBOIS. I see, sir. Of course I view these, Mr. Chairman, from the viewpoint of a fellow who has always lived in a small town. Mr. McCulloch, I think mentioned that he came from a small town and I feel I am among friends. I take the town, for instance, which I live in. We have two banks there. If we merged the people would get less consideration.

The CHAIRMAN. Thank you, Mr. DuBois.

The CHAIRMAN. Mr. Welsh, general attorney of the Association of American Railroads will be our next witness.

TESTIMONY OF PHILIP F. WELSH, GENERAL ATTORNEY, ASSOCIATION OF AMERICAN RAILROADS

Mr. WELSH. I am general attorney with the Association of American Railroads in Washington, D. C. That association is an unincorporated organization composed of railroad companies having 95 percent or more of the railroad mileage of the United States and 5 percent or more of the railroad revenues of the United States.

I appear very briefly before your committee in connection with H. R. 2143 and H. R. 264 for the purpose of making a very limited comment. The bills pending before the committee are H. R. 2143 and H. R. 264. The principal difference between those bills as it is observed by our industry is the fact that H. R. 2143 contains 10 specific exemptions for the railroads to give advance notice of the contemplated corporate

transactions.

It is the view of the railroad industry that the exemptions contained in 2143 are important and helpful and desirable. And the railroad industry for that reason takes no position with respect to this bill.

My purpose in appearing today is to urge and recommend to the committee that in the event any bill other than H. R. 2143 should be favorably considered, it should contain exceptions or exemptions substantially identical to those already embodied in H. R. 2143 and we are, of course, particularly interested in that exemption that relates to transactions subject to regulation and approval by administrative agencies such as the Interstate Commerce Commission.

The CHAIRMAN. You have no objection to 2143 if it contains those exemptions?

Mr. WELSH. That is right, sir. That is precisely my point.
The CHAIRMAN. Thank you very much.

Our next witness is Mr. James F. Fort, assistant to general counsel, American Trucking Association.

TESTIMONY OF JAMES F. FORT, ASSISTANT TO GENERAL COUNSEL, AMERICAN TRUCKING ASSOCIATIONS, INC.

Mr. FORT. Mr. Chairman and members of the committee, my name is James F. Fort. I am assistant to the general counsel of the American Trucking Associations, Inc., with offices at 1424 16th Street NW., Washington, D. C.

The American Trucking Associations, Inc., is familiar to most of you, but for the record I will state that it is a federation composed of organizations in each of the 48 States and the District of Columbia, and our membership includes both private and for-hire forms of truck transportation.

Mr. Chairman, the purpose of my appearance today is the same as Mr. Welsh who immediately preceded me.

I would like to ask that my prepared statement be incorporated into the record and merely summarize it at this time.

The CHAIRMAN. I take it then you have no objection to H. R. 2413 provided it contains the exemptions which you are going to tell us about?

Mr. FORT. That is correct.

The CHAIRMAN. And that you actually favor it with those exceptions?

Mr. FORT. We formally take no position on it, sir, but we certainly would not oppose it. I would like to invite the attention of the subcommittee to the more detailed testimony presented last year before the Senate Antitrust Committee at the time they held hearings on H. R. 9242 and S. 3424.

The CHAIRMAN. Thank you very much. Your statement will be incorporated into the record.

(The statement of Mr. James Fort follows:)

STATEMENT OF JAMES F. FORT, ASSISTANT TO THE GENERAL COUNSEL, AMERICAN TRUCKING ASSOCIATIONS, INC.

Mr. Chairman and members of the subcommittee, my name is James F. Fort. I am assistant to the general counsel of the American Trucking Associations, Inc., with offices at 1424 16th Street NW., Washington, D. C. The American Trucking Associations, Inc., is familiar to most of you but for the record I will state that it is a federation composed of organizations in each of the 48 States and the District of Columbia, and our membership includes both private and for-hire forms of truck transportation.

In order to make this appearance a brief one, I invite the attention of the subcommittee to the more detailed testimony presented by ATA last year before the Senate Antitrust Subcommittee on H. R. 9424 and S. 3424, bills similar to those before you today. This testimony appears at page 501 of the printed hear. ings on the above bills.

While the trucking industry has no position as to the overall purpose of the pending legislation, we do wish to bring to the attention of the subcommittee certain objections to language contained in H. R. 264 and to suggest that a provision included in H. R. 2143 be made a part of any bill reported by the committee.

Section 5 of the Interstate Commerce Act requires that the Interstate Commerce Commission approve, prior to their consummation, consolidations, or mergers of the properties, franchises, or control of carriers subject to its jurisdic tion. Section 7 of the Clayton Act provides that that section shall not apply to "transactions duly consummated pursuant to authority given by the Interstate Commerce Commission ***.”

Thus the Congress has resolved the inherent basic conflict between federally regulated industries and the antitrust laws by giving the regulatory agency the

right to control such industries in the public interest without the duty to insure that all of their actions would comply with the antitrust acts. As the ICC said in its comment last year on H. R. 9424: "This is necessarily so because a completely regulated industry is involved, which regulation in itself protects the public interest."

H. R. 264 would require that trucking companies, meeting the prescribed criteria, notify not only the ICC and obtain its formal approval but also give the prescribed notice to the Attorney General.

The Attorney General presently has the right to intervene in merger proceedings before the ICC. He has the same rights as any other intervenor to be heard and to make known his views. We feel that this is an adequate procedure particularly in view of the fact that it is the ICC, rather than the Department of Justice, which has the duty to enforce section 7 of the Clayton Act against carriers subject to its jurisdiction.

In our testimony last year before the Senate subcommittee we proposed:

1. that the notice provisions not apply to mergers pending before regulatory agencies when such mergers are unlawful unless approved by the regulatory agency; and

2. that if the Attorney General desires notice of pending mergers the regulatory agency, in our case the ICC, be required to formally advise him of applications under the several statutes controlling regulated industries. These suggestions are today before this subcommittee in the chairman's bill, H. R. 2143, appearing at lines 1 to 12 on page 6 and reading as follows:

"(10) Any acquisition of stock or assets which, under any specific provision of law, requires the approval in advance of a commission or board or other agency of the United States, and when so approved is exempt under any specific provision of law from the provisions of this section: Provided, however, That any commission, board, or agency of the United States which is authorized by law to approve the acquisition by one corporation of the stock or assets of another corporation where by virtue of such approval such acquisition is exempted from the provisions of this section shall promptly notify the Attorney General of any application or request for such approval."

We respectfully request that should the subcommittee recommend enactment of a bill such as those before you that a provision such as that be included in its provision. To do otherwise would be to create a situation which in the words of the ICC "would have the effect of dividing jurisdiction over such matters between this Commission and other Government departments and agencies (and) would be unnecessary for the protection of the public."

The CHAIRMAN. The next witness is Don Durand, Air Transport Association.

TESTIMONY OF DON DURAND, AIR TRANSPORT ASSOCIATION Mr. DURAND. My name is J. D. Durand and I am secretary and assistant counsel of the Air Transport Association which is composed of substantially all of the certificated airlines of the United States. I have a 3-page statement, Mr. Chairman, which I would like to have included in the record.

The CHAIRMAN. You have that permission.

Mr. DURAND. I think, in view of the lateness of the hour, it might suffice for me to say here that our position on the bill is generally the same as the position of the two gentlemen who preceded me.

We take no position on the desirability or advisability of general legislation of this kind. We do favor the inclusion in any bill reported by the committee of a paragraph substantially along the lines of subparagraph (10) on page 6 of H. R. 2143, the chairman's bill. With the inclusion of such a paragraph, we would have no objection to bills of this nature.

The CHAIRMAN. Thank you very much. Your statement will be incorporated into the record.

(Mr. Durand's statement is as follows:)

STATEMENT OF THE AIR TRANSPORT ASSOCIATION OF AMERICA

My name is J. D. Durand. I am secretary and assistant general counsel of the Air Transport Association of America, which is composed of substantially all of the certificated airlines of the United States.

I welcome the opportunity of appearing before this committee on behalf of the airline industry. We urge that the committee include in any bill reported by it, dealing with prior notification of corporate mergers, a provision substantially similar to subparagraph No. (10), which appears at the top of page 6 of H. R. 2143. This paragraph would have the effect of exempting. from the notification and waiting period provisions of H. R. 2143, airline mergers and consolidations, or the acquisition of the stock or assets of one airline by another. Since these matters are, by virtue of section 408 of the Civil Aeronautics Act, completely under the jurisdiction of an arm of Congress, the Civil Aeronautics Board, we believe that this exemption is proper and should be included in any legislation approved by this committee.

When, in May of 1956, similar legislation was pending before the Judiciary Committee of the Senate, the Chairman of the Civil Aeronautics Board, in a letter dated May 22, 1956, advised the committee that because of the comprehensive jurisdiction of the Civil Aeronautics Board over airline mergers, consolidations, and acquisitions, premerger notification, and waiting periods are ́“unnecessary in relation to air transportation and to some extent duplicative of existing law."

As committee members will recall, in March of last year the committee reported favorably H. R. 9424, which in many respects was similar to the two bills presently before the committee. However, H. R. 9424 did not have an exemp tion provision similar to paragraph (10) of H. R. 2143. An examination of the reasons stated in the committee's report (No. 1889) in support of H. R. 9424, indicates that none is applicable to the airlines. Such an examination also reveals very clearly the manner in which section 408 of the Civil Aeronautics Act operates.

The first of these reasons, which appears on page 2 of the report, is that "at the present time the staff of the antitrust enforcement agencies must rely upon newspapers, financial periodicals, trade journals, and other publications for information regarding proposed mergers ***. These procedures are quite unsatisfactory, especially since many significant mergers are not publicized in advance of consummation." This statement can have no application to airline mergers. Section 408 of the Civil Aeronautics Act makes it unlawful for any airline to consolidate or merge with another or to acquire another airline unless, upon application to the Civil Aeronautics Board, such merger, consolidation, or acquisition is approved by the Board. The Board does not have the duty of keeping itself informed with regard to mergers or consolidations of airlines. The airlines have the duty of informing the Board of contemplated mergers and of obtaining the Board's approval of them, and failure to discharge this duty subjects the airlines to civil and criminal penalties.

The second reason advanced as supporting the need for H. R. 9424 is that "the enforcement agencies are also confronted with the problem of collecting elementary information about the companies involved in mergers in order to determine the merger's impact upon competition, and whether a full investiga tion should be made ***. While this type of information is ordinarily requested from the companies, at present they have no legal obligation to furnish the information requested, or to make it available expeditiously" (p. 3). These statements also are completely inapplicable to airline mergers. In order to obtain Board approval of a merger the airlines concerned, must demonstrate, in a public hearing, to the satisfaction of the Board that the proposed merger is consistent with the public interest, that it will not result in creating a monop oly or monopolies and thereby restrain competition or jeopardize another airline not a party to the transaction. Thus, the airlines are under a statutory duty to submit all the information and data which the Board needs to determine the merger's impact upon competition. The statute provides for the "full investigation" contemplated as a possibility by the House committee's report. Moreover, the information must be made available to the Board “expeditiously," otherwise the proceeding will not go forward.