Mr. BROWNELL. Yes, indeed; I think it will be clear after I have made a statement on the proposal.

The CHAIRMAN. It is correct, is it not, that at the present time under the Federal statutes the approval of the Comptroller of the Currency is necessary for all mergers between national banks or between national banks and State banks where the resulting institution is a national bank?

Mr. BROWNELL. Yes, that is right; but only certain ones and only the stock acquisitions can they apply an antitrust standard to.

The CHAIRMAN. That is right. Are you familiar with the fact that the Comptroller of the Currency, Mr. Gidney, testified on several occasions that he would not approve any bank merger or consolidation subject to his jurisdiction where the effect in any section of the country may be to substantially lessen competition or tend to create a monopoly?

He made those statements before this committee and before the Senate Antitrust Committee. Are you familiar with those statements?

Mr. BROWNELL. In a general way, yes.

The CHAIRMAN. In other words, it is correct, is it not, that Mr. Gidney has testified that he will not approve any national bank merger which is contrary to the principles set forth in the so-called Celler-Kefauver Act? That is the effect of those statements, isn't that correct?

Mr. BROWNELL. Of course he said also in his testimony:

I have not any competency in the antitrust field and I do not know what the courts have done.

The CHAIRMAN. I am coming to that.

Mr. BROWNELL. So that he is the first to recognize, and so stated in his own testimony, that that was not his baliwick, that he was really interpreting the provisions of the Banking Act outside the field of antitrust.

The CHAIRMAN. I will come to that in a minute. I will repeat the question though.

In other words, it is correct, is it not, that Mr. Gidney has testified. that he will not approve a national bank merger which is contrary to the principles set forth in the Celler-Kefauver Act, that is he said that he would not approve it where there would be a tendency to create a monopoly or to substantially lessen competition in any section of the country.

When he makes those statements, that means that he wants to act within the purview of the Celler-Kefauver Act which amends section 7 of the Clayton Act; is that right?

Mr. BROWNELL. I would have a little different interpretation of that, Mr. Chairman. I think that he said that if that was the clear standard set up by the Congress, he would follow it.

I do not interpret him as saying that if the "unduly" provision is in there, that he would follow the present standard. The CHAIRMAN. He said he would not follow

Mr. BROWNELL. Whatever the Congress set up.

Now we are trying to make the point that the Congress should set up one single standard which is just as clear as can be so that we

won't have the different agencies coming out with differing interpretations.

Mr. MALETZ. Mr. Attorney General, has it been called to your attention that the Comptroller of the Currency has testified before several congressional committees that in the exercise of his discretion he would not approve any national bank merger, where the effect may be substantially to lessen competition or tend to create a monopoly in any

section of the country?

Mr. BROWNELL. I think that he was qualifying that to say that if that was the standard setup by the Congress, he would follow it.

Mr. KEATING. In other words, that was the standard at that time? Mr. BROWNELL. Yes.

Mr. KEATING. As to other corporations and he said he would follow it as to banks.

But if they put the "unduly" in there, in the Senate bill and we set up the standard of "undue," he would not then require

Mr. BROWNELL. That is right.

Mr. KEATING (continuing). The compliance with this word "substantial"?

Mr. BROWNELL. I agree with Congressman Keating.

The CHAIRMAN. Let us read what was said at the hearing.

Mr. MALETZ. Mr. Chairman, testifying before the Senate Antitrust Subcommitte, Mr. Jennings, who is Deputy Comptroller of the Currency, stated as follows:

It is the opinion of our counsel that under section 7 of the Clayton Act, if there is a substantial or if there may be a substantial lessening of competition, it is required that the application to merge be denied. That is the opinion of our counsel. The decision is based wholly on competitive factors.

Testifying before this committee, Mr. Gidney stated as follows at pages 452 and 453 of volume I, Hearings on Current Antitrust Problems:

Question: In other words, the Celler Act serves as a guide for your office in determining whether you approve or disapprove a merger involving national banks; is that correct?

Mr. GIDNEY. We would not feel that we could approve what we consider to be a violation of that principle, that is true. I do not believe we are charged with theadministration of the act. That is a technical point. I do not want to labor it because I am not very well qualified.

At page 483, Mr. Chairman, Mr. Gidney wrote a letter to you dated. March 14, 1955, which stated in part :

There may be a technical question as to the specific application of section 7 of the Clayton Act to these mergers. However, it has been the practice of the Comptroller before giving his approval to determine whether the effect of a merger in any section of the country may be to substantially lessen competition or to tend to create a monopoly.

Mr. BROWNELL. I think that bears out, Mr. Chairman, what I said. and what Congressman Keating also said, that he was talking about the present situation, and that that would not be binding on him at all if the new statute were passed and the new standard were created. The CHAIRMAN. Wasn't he indicating what his policy was?

Mr. BROWNELL. As at present, but not if the new act were passed which established a different standard.

The CHAIRMAN. Let's see how he has carried out the policy. The Comptroller of the Currency has approved 376 national bank mergers

involving total resources of $5,224,000,000. That is found in volume I, Current Antitrust Problems, page 451, 1955.

Are you aware of the fact, Mr. Attorney General, that in this same period Mr. Gidney testified the Comptroller of the Currency has not formally disapproved a single merger for competitive reasons? Mr. BROWNELL. Yes.

The CHAIRMAN. Do you recall testifying, you yourself, before the Senate Banking and Currency Committee on February 18, 1957, as follows, page 1027:

Senator DOUGLAS. In other words, up to date the Comptroller of Currency had tended to give little or no weight to the question as to whether or not competition would be substantially less?

Mr. BROWNELL. I believe that is a fact, and I think his own testimony indicates that.

You remember that, do you, that testimony?

Mr. BROWNELL. Yes; I do.

The CHAIRMAN. In other words, even though the Comptroller testifies that he will not approve a merger where the effect may be to substantially lessen competition, from 1950 to May 1955 he did not formally disapprove any bank merger whatsoever for competitive reasons; is that correct?

Mr. BROWNELL. Yes. I think that illustrates what I have been trying to say here, that when you have two different agencies issuing interpretations of the same thing, you are bound to get differing results.

Mr. KEATING. Let me ask a question.

The CHAIRMAN. You ask a question later. Let me develop this, please.

Mr. KEATING. I think it is important to this point.

The CHAIRMAN. Make a note so you won't forget. In how many instances has Mr. Gidney sought advice from your office as to whether the effect of a given merger may be substantially to lessen competition or tend to create a monopoly?

How many times has he consulted with you?

Mr. BROWNELL. I would have to look that up.

The CHAIRMAN. Would you supply that to the committee the number of times?

Mr. BROWNELL. Surely.

The CHAIRMAN. Have you any idea? Was it 7, 8, a dozen or 1? Mr. BROWNELL. I will furnish those figures.

(Subsequently, the Department of Justice supplied the following:) DEPARTMENT OF JUSTICE, Washington, March 20, 1957.

Hon. EMANUEL CELLER,

Chairman, Antitrust Subcommittee, Committee on the Judiciary,
House of Representatives, Washington, D. C.

MY DEAR CONGRESSMAN CELLER: In Attorney General Herbert Brownell's appearance before your subcommittee on March 6, 1957, it was requested that the Department furnish you with instances in which Comptroller of the Currency Ray M. Gidney sought advice from the Antitrust Division as to whether the effect of a given merger may be substantially to lessen competition or tend to create a monopoly. We have reviewed our records and find that in only one instance was the Department's advice sought on a competitive effect of a particular bank merger problem. In that instance, members of the Comptroller's staff conferred informally with the Division around the end of September 1956

on the proposed acquisition of the Peoples Saving Bank of Port Huron (Mich.) by the Michigan National Bank. This proposed acquisition has been subject to a rather thorough investigation because of Sherman Act as well as Clayton Act problems.

In two other instances, the Comptroller's office has forwarded information to the Division on bank mergers. On August 8, 1956, the proposed merger of Farmers & Merchants National Bank of Los Angeles and Security First National Bank of Los Angeles was brought to the Division's attention before the Comptroller had given his approval. It was with respect to this merger that I personally talked to Mr. Gidney on the telephone. Lack of section 7 jurisdiction because this transaction was consummated by an acquisition of assets precluded the Department from considering this matter under section 7. On August 17, 1956, the Comptroller called the Division's attention to his approval of the merger of the Delaware Valley Bank & Trust Company of Bristol (Pa.) and the Philadelphia National Bank of Philadelphia.

In three other instances, our records show that the Comptroller's office was notified of our interest in certain bank merger problems. Notice was given on January 5, 1955, on the Chase-Manhattan Bank merger, March 7, 1955, on the National City-First National Bank merger, and around the 1st of December 1956 on the pending New York bank holding company formation which is now before the Federal Reserve Board for approval. In the Chase-Manhattan and National City-First National Bank mergers, this Department specifically requested from the Comptroller's office information or data relating to competitive aspects of these mergers. In the pending holding company problems, our requests for information have been mainly channeled through the Federal Reserve Board, the agency with primary jurisdiction over this matter under the Bank Holding Company Act of 1956. However, a recent information request has been made

directly to the Comptroller's office. Sincerely yours,

VICTOR R. HANSEN,

Assistant Attorney General, Antitrust Division.

The CHAIRMAN. Can Judge Hansen testify to that?

Mr. BROWNELL. No; he is not prepared. We were just asking each other if we had any records with us which would show the answer to that, and we do not have them here.

The CHAIRMAN. Would you say, Judge, from the time you became head of the Antitrust Division it was a limited number of occasions that the Comptroller of Currency conferred with you on these matters? Mr. HANSEN. I would rather get the facts. I know that I have talked to Mr. Gidney with reference to mergers.

The CHAIRMAN. Do you remember now, have you any present recollection of any particular occasion when the Comptroller of Currency asked your advice about a bank merger?

Mr. HANSEN. I remember specifically that he called me with reference to the merger of the Security First National Bank and the Farmers and Merchants National Bank in Los Angeles, but I would want to look at the record to find out exactly any others?

The CHAIRMAN. Do you have in mind any other occasions when he called you?

Mr. HANSEN. That is the one I recall now. There may have been others.

The CHAIRMAN. Mr. Attorney General, Mr. Gidney testified, I believe, as follows before the Senate Banking Committee: "I have not any competency in that, the antitrust field. I do not know what the courts have done."

You are aware of that statement; aren't you?

Mr. BROWNELL. Yes. As a matter of fact I quoted that to you a moment ago.

The CHAIRMAN. If the standards were to be changed as recommended by Mr. Gidney, it would require him only to consider among other things whether the effect may be unduly to lessen competition or unduly to create a monopoly.

That is correct; isn't it?

Mr. BROWNELL. Would you say that again, Mr. Chairman? I did not follow that.

The CHAIRMAN. If the standards were to be changed as recommended by Mr. Gidney?

Mr. BROWNELL. Yes.

The CHAIRMAN. It would require him only to consider among other things whether the effect may be unduly to lessen competition? Mr. BROWNELL. That is right.

The CHAIRMAN. Or unduly to create a monopoly?

Mr. BROWNELL. That is right.

The CHAIRMAN. And yet he admits that he has no expertise on these questions.

Mr. BROWNELL. That is why we would think that it would only be a matter of commonsense and good government to have the Attorney General, that is, the Antitrust Division of the Department of Justice, consulted in all these cases.

I think it is very important to have one single agency which will maintain the standard and interpret it.

The CHAIRMAN. Under Mr. Gidney's proposal he would not have to ask your advice at all?

Mr. BROWNELL. No; he would have the option to but he would not have to.

The CHAIRMAN. He could disregard the Attorney General's Office completely?

Mr. BROWNELL. Yes.

The CHAIRMAN. Suppose that section 23 of the Senate Banking and Currency Committee bill should be adopted without the savings clause, such as you recommend, for the purpose of making clear continued applicability of the antitrust laws.

Suppose, further, that a bank merger should take place accomplished by stock acquisition. Could the Department of Justice still proceed under section 7 by virtue of the fact that the acquisition is not exempted by present section 7 of the Clayton Act?

Mr. BROWNELL. It would take a Philadelphia lawyer to answer that one.

The CHAIRMAN. It is difficult.

Mr. BROWNELL. It is difficult, and will be affected somewhat by the legislative history of these two proposals as they are developed in the succeeding weeks.

The CHAIRMAN. It would certainly complicate the situation as far as your office is concerned.

Mr. BROWNELL. Very much so.

The CHAIRMAN. To pursue this further, if section 23 of Financial Institutions Act of 1957 is adopted without the antitrust savings clause, and if the present premerger notification bill is adopted, would a bank merger that has received advance approval by a Federal bank supervisory agency still be subject to antitrust prosecution by you under the Clayton Act?

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