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practically all of the alphabetical agencies in the Government, the SEC, the RFC, the FTC, all of them, and there were times when we wondered, Mr. Chairman, if we would have enough

The CHAIRMAN. How about the RFC?

Mr. WAGNER. Yes, the RFC, and I borrowed some money from it in the course of a real-estate situation in Chicago, and I am proud to say that when Sam Reed asked for extension of the RFC powers, he referred to that relationship as one of the good things outstanding in good relations between business and Government—so, if I can have that plug, I would be glad to.

I started to say, Mr. Chairman, there were times when we wondered whether we would have time to attend to the growth of our company and profitability and so on, and so naturally I am concerned about any new imposition on business. I do not mean to use that word “imposition" in a derogatory sense, but when there is anything that adds any time, which adds to the possibility of delay, which adds to the burdens of reporting that we already face, that gives me concern.

And I should say at this point also, Mr. Chairman, that I have a deep respect for the Members of Congress and their effort to do the things that these Departments ask them to do. I am not here in a critical attitude. I hope I am here in a helpful attitude.

But the fact is that very often, in the case of a proposed merger, there frequently is, shall I say, the destruction of the opportunity to complete the merger largely because of the market conditions, or borrowing requirements, maybe the bank won't stay hitched, or something of that nature takes place if delays are added, and there are already some delays like getting ready for the SEC presentation and the delay in public financing.

And if you add delay on top of that and, frankly, I believe that under this bill the delay will be more than 60 days, in many instances, Mr. Chairman, particularly if it is passed and if they attempt to supervise all of these transactions of $2 million or over, where there are acquisitions, many of which are just ordinary business transactions occurring in the regular conduct of a business, I think that the Department of Justice will be utterly swamped, and I don't see how they are going to get through the examination of these many things which will come before them in time to require relevant information, as the bill suggests, before the expiration of the 60 days, or at the last minute.

And so, if they are so heavily engaged in examining these things, it seems to me that they may ask for the relevant information at the last minute, which means, instead of 60 days, that it will be tied up 90 days.

The CHAIRMAN. And, contrarywise, the Attorney General has the right to shorten the period.

Mr. WAGNER. I understand, but in practice, if you look at the SEC, for example, and the load of work that they have in these many things, they must look into these—the chances are for the extension of time rather than for the shortening of the time, and that has been my experience in the things we have had to deal with, and I think it will occur here.

Now, actually, I would like to point out one thing that I think is dangerous in this bill. It has been mentioned here and a lot of this


testimony has been repetitive and I am not going into a great deal of detail for that reason. You have my written statement.

If you take the transactions of $2 million or more where there are acquisitions, you are going to run into a multitude of business transactions which have no meaning at all so far as competition is concerned, or as far as monopoly is concerned.

I am thinking, for example, that maybe over here you may have a plant, and there is a chance to expand the operations, to increase our production and, under this bill, if that plant happens to be $2 million or over, it is essential that we must first go down and make a filing and wait 60 days before something can be consummated.

Mr. KEATING. May I interrupt?
Mr. WAGNER. Yes, sir.

Mr. KEATING. Perhaps that $2 million figure should be increased to some other figure. But, whatever the figure is, in the instances you recite, and there undoubtedly are some, would it not become apparent to the Attorney General immediately that that is not anything that required his action, and would that not be a typical example of where the 60-day period would be greatly decreased?

Mr. WAGNER. Well, Mr. Keating, I go along with you; that is entirely possible, sir, but I do not know what the makeup of the Department is going to be 10 years hence; as the chairman very properly said this morning, we don't know who is going to be running it, and we do not know the circumstances under which these practices are going to continue.

For example, let me give you this idea. In the oil business—we happen to be engaged in the oil business at the moment we have frequently an opportunity to acquire some leases from another company. Maybe they involve more than $2 million, and maybe we do it on a farm-out basis which involves no present consideration.

But I am wondering what this "fair market value” thing means in the bill and who is going to decide what fair market value is, what the fair market value of such an acquisition might be. It might be a sizable lease, bonuses are very costly today in oil matters, and there may be an oil payment involved that could be delayed and maybe a number of conditions, maybe market conditions for money might deteriorate during the time of the delay and there may be, for example, these lease backs that have been mentioned, there are a great many instances of leasebacks which would have to come without any exemption of the bill under any provision

The CHAIRMAN. We have in our report detailed statements concerning waiver of those types of transactions. I don't think we have too much to worry

about. Mr. KEATING. I would expect, Mr. Wagner, that it would be necessary for the Attorney General and the Federal Trade Commission, if they are in it, to set up regulations under any such law. It would probably turn out that all proper exemptions not necessarily envisioned in the legislation itself would be the subject of regulation by them.

I would think that in the specific case you just mentioned, the Attorney General would naturally set up in a regulation, some very expeditious manner of dealing with that transaction which clearly is not one in which he should take an interest.

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Mr. WAGNER. The difficulty with that, sir, as I see it, is that he is required to set up certain procedures and regulations within 120 days after enactment of the bill, but he may, or the Justice Department

The CHAIRMAN. The word is "shall."

Mr. WAGNER. I mean after the original procedure, which might be changed from time to time.

There is a broad administrative provision there that actually if this occurs, how do we, in business, know always when those changes take place, and what are our obligations under these changes. We need à Philadelphia lawyer now to sort of unscramble some of the requirements for reporting and notification.

The CHAIRMAN. As a good businessman, I am sure you will consult the Federal Register.

Mr. WAGNER. Well, our lawyers do, yes, sir, but I can also visualize smaller units, not quite having the talent necessary to conform to these changing practices.

The CHAIRMAN. Any changes that would occur undoubtedly would be spread in the press. I don't think there would be anything secret about it. Changes would be known within a short time after promulgation of the regulation.

Mr. WAGNER. I find also as expressed yesterday, sir, a great objection to this type of prenotification, for the simple reason that the possibilities of publicity prior to actual commitment is increased in many instances where moderate sized businesses are trying to get together and, in their anxiety, not to have it exposed to the competition the fact that they are going to get together and the possible loss of customers, they shy away from anything which might increase the chances of publicity in advance of the fact before committing the deal.

Mr. KEATING. We have got a provision in there. The CHAIRMAN. We have got it in there. Mr. WAGNER. Yes, sir, you have recognized that and I am aware of the confidentiality ideas of the committee, but it is rather difficult in plugging leaks, if you are going to have a department here with many hundreds of people attached to it, and I think you will, the chances of leaks are greater. I am not trying to state the position of the individual who is talking about merger or thinking about merger is correct, necessarily, but I am saying that that is the psychological approach, he will shy away from a merger if he fears that he will have publicity before the actual transaction.

I have had much experience in that in the early days of our venture capital activities, we found that was one of the primary fears of anyone trying to acquire or talking to you about acquisition.

The CHAIRMAN. I want to say at the present time there is a voluntary arrangement, whereby those intending to merge can go to the Department of Justice and get clearance in an appropriate case. As far as I know there have been no leaks in the process of voluntary notification.

Mr. WAGNER. The reason for that, Mr. Chairman, is that those of us in business who are contemplating a merger are not foolish enough to go blindly ahead with something we fear or think might be in violation of the Clayton Act or could so be conceived as a violation of that or the Sherman Act, so those of us who are perhaps a little

more experienced in those matters will go to the Justice Department and ask for clearance and actually when you get into the realm of transactions which might have the effect of lessing competition or creating or tending to create monopoly, you are getting into great big sizeable units and frankly, those are always well known about before they actually occur, they are usually corporations of very substantial size and they have stockholders and the matter goes to the stockholders before it is finally committed, and the Justice Department has full knowledge of the transaction well in advance of the time of the actual consummation.

But I am speaking about these smaller units that do not have any significance from the standpoint of lessening competition or creating monopoly, that is what I am speaking of and, certainly, Mr. Chairman-you were busy, Mr. Chairman, so I will repeat.

I said that in the case of any instance where a business man, a man that is trying to bring together two units, he has a concern about the possibility of the Clayton Act or Sherman Act violations and certainly he is going to go into the Justice Department and get clearance beforehand, or at least an opinion expressed. I understand they do not give you a complete clearance but will give you an opportunity.

The CHAIRMAN. And sometimes they have refused to give clearance and the parties nevertheless elected to go forward. I have in mind Youngstown

Mr. WAGNER. Right, and you know my answer to that, sir-let the buyer beware of the Justice Department and the Federal Trade Commission. I don't think we should be too much concerned what the effect might be on that kind of a situation because obviously the facts are going to prove one thing or another in due course.

But I am concerned about the multitude of smaller businesses or smaller transactions that take the form of merger, and when you get to the question of the dollar limitation, actually that is not in my opinion, a basic limitation in any event, because actually there might be two small units which control a very technical product if they get together, which might constitute a monopoly if they are put together and they might be well below the limitation you are speaking of and might be subject to Justice Department action.

The CHAIRMAN. There are manyof them with less than $10 million, but the Department of Justice can still go after them.

Mr. WAGNER. On behalf of the chamber of commerce-I have been ad libbing and I apologize for it

Mr. KEATING. You need not, sir, you have been a most effective spokesman for the chamber. It is always, I think, more effective to talk the way you are doing out of your own personal experience than to read a prepared statement, particularly-and this is not directed at you, but particularly one prepared by lawyers, read by businessmen.

There is another thing I notice and want to say to you, that I think is refreshing, that is your attitude. You have a very fine and fair attitude and you are not calling names the way some of the other witnesses have, and I commend you for that.

Mr. WAGNER. Thank you.

The CHAIRMAN. And I want to say that I was impressed yesterday, Mr. Wagner, and I am doubly impressed today. I think that you have a very free and easy manner, and the next time I want a lawyer, even if you are not one, I am going to go down and hire you.

Mr. WAGNER. Well, somebody once called me a sea lawyer and after I found out what that meant, I did not like it. Thank you very much, gentlemen.

I would like to stress one or two other points if I may.

First, I think it is only proper, since the question came up in connection with the National Association of Manufacturers, that this position of the Chamber of Commerce of the United States was presented to the board of directors and the board of directors acting at a meeting in January, approved the statement of the chamber in opposition to this bill.

Mr. KEATING. May I ask what date in January that was?
Mr. WAGNER. January 18, sir.
Mr. KEATING. Were all of the

Mr. WAGNER. I beg your pardon, Congressman, that was the finance committee members, they attended a meeting on the 16th and the board meeting was on January 25 at which the findings were reported and confirmed by the board.

Mr. KEATING. Were they aware at that time of all of the exemptions that have been written into this bill?

Mr. WAGNER. I am quite sure the bill being relatively brief-I was not there so I will have to refer that question to Mr. Barton.

Mr. BARTON. I believe they were not supported in full but they took a very strong stand, sir, against the principle.

Mr. WAGNER. There was a report to the board of directors on this prenotification legislation which was briefed and in which the position of the Finance Committee was presented to the board upon which they acted.

May I also say this, that I realize that they have changed the bill in the last year, but last year we did not appear as the chamber before this committee. However, we did appear before the Senate committee in opposition to this bill and the chamber has approximately 20,000 business members and it also has some three thousand-odd don't misunderstand the term "odd,” I did not mean to imply anythingbut they have 3,400 association members in addition, chambers and trade associations and so on, and the position of the chamber was known to the membership by reason of the publicity within its own publications to the membership and in no instance did anybody take a position in favor of this legislation, although the staff tells me that they had a number of letters commending the position of the chamber in opposition to this legislation. I did not see those communications but I have been informed there was a number of instances.

The CHAIRMAN. And there was not a single member that vouchsafed a favorable comment on the bill?

Mr. WAGNER. We had no communication which was in favor of the bill, sir. I think this policy position of the chamber might be mention here. You have this written testimony but I would like merely to stress this for a moment:

The chamber's fundamental objections to the provisions incorporated in this measure are

1. They provide for an unwarranted extension of governmental regulation of a broad range of business transactions under the guise of more effectire antitrust enforcement.

2. They would increase existing dual or overlapping jurisdiction orer law enforcement in the antimerger field.

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