(The statement by Henry Mulryan, Los Angeles County, Calif., is as follows:)

My name is Henry Mulryan. I am a resident of Los Angeles County, Calif. I have resided in California since 1904 and am a graduate of Stanford University. I have received bachelor of arts and master of arts degrees in economic geology. I was employed as a mining engineer in 1925 and 1926 near Wickenburg, Ariz. In 1926 and 1927 I was superintendent of the Groom mine for the American Smelting & Refining Co. Subsequent to 1927 I specialized in nonmetallic minerals. From 1927 to 1937 I was a geologist, quarry inspector, assistant mining superintendent, and research engineer for Johns-Manville Corp., at Lompoc, Calif. From 1938 to 1942 I was a mining engineer and plant superintendent for Gladding, McBean & Co., Los Angeles, in charge of all that company's mining activities in southern California.

Since 1942 I have been a consultant geologist and mining engineer in Los Angeles, specializing in nonmetallic minerals. I am listed in Who's Who in Engineering and Who's Who on the Pacific Coast. In 1944 I became a director and vice president of the United States Pumice Supply Co. with mines in Mono and Siskiyou Counties, Calif., and plants in North Hollywood and Leevining, Calif. In 1944 I also became a director and president of the Globe Los Angeles Mining Co., which owned asbestos mines in Gila County, Ariz. Since 1949 I have been a director of Viber Co., Burbank, Calif., manufacturers of vibrating equipment. In 1946 I became executive vice president and general manager of the Sierra Talc Co. which operates mines and mills in California, Nevada, Nebraska, and Montana, and in February 1953 I became president and general manager of that company, now called Sierra Tale & Clay Co.

I am a member of the American Institute of Mining Engineers, a member of the American Ceramic Society, a member of the industrial committee of the California State Chamber of Commerce. I served as chairman of the mining committee and a director of the Los Angeles Chamber of Commerce 1947-52 inclusive. I am presently a member of the mining committee and also the manufacturing and industries committee of that organization. I am also presently serving as a member of the executive committee of the Western Governors Minerals Policies Conference. During its existence I was a member of the Army and Navy Munitions Board, Nonmetals Industry Advisory Committee.

I have appeared as an expert witness for the United States in condemnation actions in many courts in California. I have contributed technical publications to the American Institute of Mining Engineers, to the California Division of Mines and to the American Ceramic Society. Under my direction publications concerning nonmetallic metals and minerals have been published by the Los Angeles Chamber of Commerce.

THE NATURE, OCCURRENCE, AND MINING PROCESSES OF TALC

Talc, a nonmetallic mineral, is a hydrous silicate of magnesium derived from the alteration or metamorphism of ingenious and sedimentary rocks and minerals having a high magnesium content.

Talc has been mined for centuries and in many parts of the world. It is found principally in California, George, Maryland, Montana, New Mexico, New York, Nevada, Vermont, Virginia, Texas, and Washington. In the United States practically all talc is mined by undeground operations. Tale mining is comparable to other hard rock metal mining and frequently presents exceptional hazards and diffculties greatly increasing costs, and often threatening the loss of the mine entirely. In the West talc mines are in isolated areas where weather conditions reach extremes and labor turnover is high.

In the West the crude ore occurs in lenses which are sometimes isolated and sometimes occur in definite geological structures. The cost of finding, developing, and mining an individual lens is quite high. Even after discovery it is difficult to determine the location of talc ore bodies because of their lenticular nature. Drill holes might pass between two lenses and the operator would never know of their existence. Considerable drifting, crosscutting, tunneling, and sinking are necessary to lcoate these lenses. After the ore has been located, mining can only be done by expensive square-set timbering.

In the East the talc deposits differ somewhat in their geological occurrences especially in that the geological structures containing the tale are much stronger. Consequently the ore bodies are larger and less erratic. But the same care must be exercised in selecting and mining ore in the eastern as in the western mines. Since tale is the product of heat, pressure, and water, applied to any one of a

number of different rocks, generally the alteration is incomplete, and only a portion of the rock has been changed to talc. This makes necessary careful hand seelction of crude ore in order to maintain a uniform quality.

The crude ore must be crushed, ground, and bagged. Conventionally the talc taken from the mine is first crushed in primary and sometimes in secondary crushers to minus one-half inch material. Fine grinding is then achieved in tube mills, roller mills, hammer mills, mills using fluid energy, Raymond mills, and Hardinge mills, using closed circuits with Sturtevant, Raymond, or other types of air separators. About 90 percent of all talc is put through a fine grinding process by the mining company before its first sale.

I have given you this brief, general description of talc mining to show that even a small miner must have a fairly sizable investment in property and plant in order to produce a salable commodity.

Why I am here: My purpose in appearing here is to ask you to consider the effect of this legislation on business transactions not involving monopoly, and to balance the possible harm which might result from its enactment against the good it will accomplish.

The report of the House Judiciary Committee explains the purpose of the bill, H. R. 9424, to be the giving of advance notice of mergers so that the Attorney General and the Federal Trade Commission may decide in advance what impact the proposed merger will have on competition. It points out that advance notice of a proposed merger will give the authorities a reasonable time to study the situation and to decide whether to seek a preliminary injunction restraining the merger pending a determination of its legality.

The House committee's report goes on to say that the notification requirements of the bill will impose no burden on small business mergers, since the notification is required only in those cases where the combined capital structure of the acquiring and acquired corporations is in excess of $10 million.

I am in no position to judge the need of the authorities for prior information about proposed mergers where the result of the transaction might substantially lessen competition or tend to create a monopoly. I certainly do not favor monopolies, and I think the authorities should have all the power reasonably necessary to prevent them. I do, however, question the wisdom of enacting this bill, because I think it will make impossible many normal day-to-day transactions, none of which have monopolistic implications. Let me try to explain what I mean.

The House committee's report says that the third paragraph of the bill, which is new, "*** makes it clear that a transaction which is not in essence a merger or its equivalent is not subject to advance notification." But the language of the third paragraph does not seem to bear out this statement. If the combined capital, surplus, and undivided profits of 2 corporations exceed $10 million, the purchase of any asset, except stock in trade, by one from the other would require prior notification if the purchase involves more than $5 million or 5 percent of the capital, surplus, and undivided profits of either corporation, whichever is less. In my judgment, this provision will impose unnecessary burdens on business-whether large or small-and may well impede their normal growth. The mining business, as you know, involves what is called a wasting asset. Consequently, mining companies are constantly on the lookout for new sources of supply. Under this bill a mining company having a capital structure of only $1 million could not purchase mining properties from another company for as little as $51,000 without giving prior notification and waiting at least 90 days, if the selling company had a capital structure in excess of $9 million. It is anyone's guess as to what effect the prepurchase notification would have on any given situation. In some instances I am sure the only effect would be the bother and expense of giving the required notification and waiting the required period before consummating the transaction. In other situations there could be far-reaching economic effects. Some companies might simply refuse to sell rather than give the notice and possible additional information required by the Attorney General or Federal Trade Commission. Or a change in the price of the product of a mine occurring during the 90-day waiting period might keep the transaction from being carried out. In either event, one company or the other could suffer serious and perhaps crippling economic consequences. If, for example, the company needed the mining properties it proposed to purchase in order to continue supplying its regular customers or to be in a position to compete for business in the future, its inability to get them for any reason would impair its business growth. And I have no doubt that the disclosures which are or may be required under this bill will make many companies hesitate

before taking any action, no matter how trivial, which will put them under a legal obligation to make them.

The situation I have just described can be restated in different ways with respect to many different types of businesses. The point is, that while the bill may prevent large companies from swallowing small ones it may also prevent small ones from making needed acquisitions from larger ones, or from other relatively small companies.

What will be the situation, for example, of a small mining company which by diligence or good luck or both has discovered a valuable ore deposit but does not have sufficient capital to exploit it. If it wants to merge with another company it may have difficulty finding one willing to do so in the face of the requirements of this bill. If it wants to sell the property, the number of prospective purchasers is almost certainly to be limited for the same reason. Raising additional capital by a sale of stock may not be feasible in today's money market. I cannot escape the conclusion that the results of this proposed legislation may be more harmful to small businesses than the good it can do to prevent monopoly. It seems to me that the bill's provisions are so far-reaching and impinge on so many business transactions that its principal effect will be to slow down and stagnate normal business growth.

I want to repeat that I am opposed to monopoly and favor any reasonable legislation which will enable the Government to stop it, but I hope this committee will not act on this legislation until after business has had a chance to learn of the possible adverse effects of this bill and to make its reaction known. I urge you to give serious study to the possible bad effects any such legislation might have on small businesses before you act.

(The statement by Alvin Shapiro, Vice President, American Merchant Marine Institute, dated May 25, 1956, is as follows:)

My name is Alvin Shapiro. I am vice president of the American Merchant Marine Institute which represents the owners and operators of 55 American steamship lines operating ocean-going vessels providing service into and out of United States ports on all three coasts.

The bill, S. 3424, and its companion, H. R. 9424, would amend section 7 of the Clayton Antitrust Act by making shipping companies provide advance notice to the Attorney General of acquisition of stocks or assets in excess of specific amounts and by providing for a 90-day waiting period, before completion of such proposed transactions, and other purposes. We avail of this opportunity to emphasize the reasons for making this proposal, if enacted, inapplicable ot the maritime industry.

Ships of the American fleet operate to and from United States ports in services and on trade routes throughout the world. These trade routes have been established by our Federal Government, which through its administrative agencies maintains continuous supervision and control as to the essentiality and service of the respective operations. As a result, there is, as a matter of fact, relatively little duplication of service between or among American-flag carriers. This, in part, accounts for some of the uniqueness of the maritime industry from a competitive point of view, as compared with other businesses or transportation media in this country. The sale of assets from one company to another tend, therefore, not to affect the competitive situation in any particular service or on any specific trade route.

Further, it should be emphasized that any shipper has available to him not only the services of American-flag vessels but virtually identical service in foreignflag ships as well. As a result, it would be impossible for American shipping companies which render only a part of the total service available in any trade to engage in practices aimed at restraint of trade or monopoly. Any such effort would automatically result in delivering his customer into the hands of a foreign competitor who is of course outside of the scape of the legislation presently under consideration.

One other vital fact must be borne in mind. All American overseas trades are not simultaneously or similarly affected by changes in general economic conditions. Certain trades may be faced with reduced cargo offerings while others are prospering. It takes some 2 to 4 years to build a vessel and a sum of $5 million or more is a very commonplace capital investment requirement. If an operator on a trade route that is expanding is to be enabled to take advantage of that condition without having to wait for the construction of a new ship, such can only be done by the purchase of a facility from another company under

circumstances which enable it or make it desirable for it to sell a ship. The legislation under consideration by your committee today would make it more difficult and subject any potential maritime transaction of this type to delays which are basically unjustified and, as shown in the following, unnecessary. In that respect, the proposals of S. 3424 and H. R. 9424 may deter business interests from providing immediate shipping services of a type and volume essential to the changing requirements of our international commerce and our national defense.

PRESENT MARITIME BOARD REGULATION

Broadly speaking, the American maritime industry can be divided between those ships which are subsidized and those which are not. Subsidy covers approximately 300 ships, or almost a third of our fleet. The owners of subsidized vessels are, by provision of the basic subsidy act-the Merchant Marine Act of 1936-under the closest and most exhaustive scrutiny of maritime agencies of the Department of Commerce. No transaction of the type characterized by S. 3424 and H. R. 9424 could take place without prior investigation and approval of the maritime agency. Moreover, section 15 of the Shipping Act of 1916 provides that the Maritime Board shall be furnished with true and complete details of every agreement of a common carrier by water which may affect "controlling, regulating, preventing, or destroying competition." The Maritime Board has the authority to disapprove, cancel, or modify any such agreement.

It is to be noted that both the Congress, in passing Public Law 899, and the President, in approving it, indicated clearly the intent to retain in the regulatory agencies unrestricted control of operations of those subject to their authority. By specific wording in chapter 1184 enacted by the 81st Congress, it was made clear that such supervision would suffice in the protection of the public interest. The Senate committee in its report favoring the passage of H. R. 2734 wrote in a paragraph unequivocally stating the adequacy of present control of transactions.

It appears to us, therefore, that both under the Merchant Marine Act of 1936 and the Shipping Act of 1916, adequate notification requirements and safeguards concerning trade practices on the part of American shipping companies are provided. Since the maritime industry is a highly complicated one in which any evaluation of practices must deal not only with the American aspects but also those of foreign competitors, the martime agency of our Federal Government is the appropriate and most skilled body for any such evaluation. We point out that the proposal concerning review by the Attorney General of such transactions as referred to by us would be an unnecessary duplication of effort, and therefore suggest that a provision to this effect as well as that requiring a 90-day waiting period in the legislation under consideration is unnecessary and not in the public interest, in respect of transactions in the maritime area. (The statement by James F. Fort, Assistant to the General Counsel, American Trucking Associations, Inc., is as follows:)

Mr. Chairman and gentlemen of the subcommittee, my name is James F. Fort and I am assistant to the general counsel of the American Trucking Associations, Inc., a federation composed of organizations in each of the 48 States and the District of Columbia. Our membership encompasses all forms of trucking, both private and for-hire.

The purpose of my appearance before the subcommittee is to bring to your attention certain objections which the trucking industry has to H. R. 9424 and its substantially identical companion, S. 3424.

The purpose of these bills, insofar as they affect the motor carrier industry, is to require notification to the Attorney General and the Interstate Commerce Commission, prior to the merger of certain corporate entities. The American Trucking Associations, Inc., takes no position on the overall merits or demerits of such a proposal as it would affect business organizations, but we do feel objection must be raised to those aspects of the bill which would apply to motor carriers subject to the jurisdiction of the Interstate Commerce Commission.

For many years the Congress has seen fit to resolve the basic conflict between regulated industries and the antitrust laws in the United States by giving exemptions to these regulated industries following approval by the regulatory agency of mergers and other matters which might otherwise be in violation of the antitrust laws. Such a situation is provided for in section 5 of the Interstate

Commerce Act and in section 7 of the Clayton Act. Court interpretations, insofar as the motor carrier field is concerned, have, pursuant to this congressional mandate, held that "as a factor in determining the propriety of motorcarrier consolidations, the preservation of competition among carriers, although still a value, is significant chiefly as it aids in the attainment of the objectives of the national transportation policy." McLean Trucking Co. v. U. S. (321 U. S. 67, 85 (1944)).

It is the feeling of this industry that the pending bills constitute an encroachment into this historic policy. We know of no outcry from the Interstate Commerce Commission which would warrant the measures called for in this pending legislation. There has been but little criticism of the administration of the Interstate Commerce Act by the Commission relating to its observance of those directives dealing with mergers within the motor-carrier field. Similarly the Department of Justice has raised no objection to the present methods until quite recently.

The report of the House Judiciary Committee accompanying H. R. 9424 (Rept. No. 1889, 84th Cong., 2d sess.) states that

"Premerger notification by regulated corporations is deemed particularly necessary by the Department of Justice since the Attorney General has a statutory right, provided by section 11 of the Clayton Act to intervene and appear in merger proceedings by commissions and boards" (p. 5).

It should be emphasized that this statutory right to intervene relates only to ICC proceedings to enforce section 7 of the Clayton Act and not to normal merger application proceedings pending before the ICC under section 5 of the Interstate Commerce Act. Under the provisions of section 5 of the Interstate Commerce Act carriers subject to its jurisdiction must obtain ICC approval of mergers and the Attorney General has a right, just as any proper party, to intervene in the proceedings. This is not, however, spelled out in a specific statutory provision,

The appearance of the Department of Justice before the Interstate Commerce Commission in section 5 proceedings is in the nature of an adversary party. H. R. 9424 and S. 3424 would require that trucking companies meeting the criteria proposed in the bill and contemplating a merger furnish to the Attorney General not only such information as might be required by the ICC but in addition they would be forced to furnish to the Attorney General upon request “such additional relevant information as may be required." In effect, therefore, the bill proposes to give blanket subpena powers into the hands of the opposition. It is of great significance that the ICC is the party with the primary jurisdiction in this field.

Neither the duty to enforce section 7 of the Clayton Act or section 5 of the Interstate Commerce Act lies with the Attorney General.

This blanket subpena power which would be given to the Department of Justice will constitute a "fishing license." We recognize and have respect for the Department of Justice in matters involving the antitrust laws, but we firmly believe that the expertise of the Interstate Commerce Commission is entirely sufficient to carry out the directives of the Congress.

It is suggested that there is a more feasible and proper solution to this problem and one which would afford to the Attorney General the notice which he desires. It appears that closer liaison between the Department of Justice and the ICC could fulfill this need. At the present time the Attorney General does not receive direct notice of (or word concerning) proposed merger applications which are filed with the ICC except through the formal notice of proposed merger applications which are published in the Federal Register by the Commission. The Commission presently requires that many copies of section 5 applications be filed, and it is our suggestion that a copy of the application (when the criteria are met to bring the merger within the purview of the bill) could be furnished to the Attorney General by the ICC without the necessity for giving to the Attorney General this most extensive authority to intervene in merger proceedings before the Commission.

Applications made under section 5 of the Interstate Commerce Act must, pursuant to ICC regulations (49 C. F. R. 180), file information far more detailed than that which would be required by the proposed legislation. The ICC form for motor-carrier merger applicants, BMC form 44, with appendixes, is 11 pages and the application form used to acquire control of a motor carrier, BMC form 45, is 9 pages, with appendixes. These applications are usually supplemented by extensive additional information.