not possibly exist. But there has been no action. I have asked for a long time that the Federal Trade Commission hold hearings of this type. The Federal Trade Commission has told me there is a lack of money.

Mr. STEVENSON. Right along that line, the Department of Justice has also used that excuse. There may be some foundation for that statement. However, acting on their statement that they did not have enough funds to employ prosecutors and investigators and the necessary force to carry on these investigations, after the recommendation of the House Small Business Committee to the Committee on Appropriations, there was brought forth an additional appropriation of $400,000 in the last session of the Congress which was made to these departments to give them more funds to employ more people so that they could carry out the provisions of the antitrust laws. That is now on the books.

Mr. FABER. But, Congressman Stevenson, that part which you say is quite true. As I told you, we asked for this action of the Federal Trade Commission before the war. Congress has given them a yearly appropriation.

Mr. STEVENSON. That is right.

Mr. FABER. One would think that finally something that is 8 or 10 years old would reach the top of the pile. They are working continuously; there is no doubt about that, but this situation with the filling-station operator really started in 1934 and 1935 when the chainstore tax and certain social laws were passed and these companies leased the stations.

We have pleaded for action, and the supplying oil companies got more brazen; then along came the war. They could not do it then because there was no merchandise, and no time to quibble with them; we had a war to win.

But, in the postwar period, those who are not in that line are in it now. I think that the committee is aware of what they said in the Wolverton report: the answers that they gave there to the three quesions whether the dealer has freedom to buy where he pleases. It is a shame with what the dealers know. The dealers saw the statement that the oil companies furnished the Wolverton committee, and their experiences are certainly opposite.

There is no relation between the remarks in the Wolverton report and the facts.

We have got to get to the dealer, if you want additional evidence. He will sign a statement, but he does not want to come out in the open because of reprisal.

He has to have some relief because he wants the freedom of doing business.

Here is an example. It seems that the Firestone Tire & Rubber Co. has a connection with a lot of oil companies. These oil companies receive a commission on the merchandise that go through those stations. Nobody would be paying somebody a commission for merchandise going through because there is no lock on the door. They could sell it there anyway. The commission they get must be an unwritten part, that they are going to use a little pressure. Who is going to pay anybody for the privilege of walking into a filling station

and selling merchandise? Nobody can do that. Why do they pay a commission?

Mr. STEVENSON. The companies pay it to the operator?

Mr. FABER. No. The Firestone Tire & Rubber Co. for the amount of Firestone products that goes into the stations of the oil company. They have a deal with that oil company and as a commission I think that should bear investigation under the Robinson-Patman law.

Here is merchandise being sold cheaper, theoretically cheaper, when it is bought through one of those dealers than the dealers who buy it without oil-company pressure. You have two different prices. If the product can be sold cheaper, why should not the retailer get the benefit of that, because the oil company only performs one thing. It has a 1-year lease over that dealer. If he does not buy it, out he

goes.

Mr. FORISTEL. Aside from your suggestion of enforcement of the present law, do you have any further suggestions to make about a new law?

Mr. FABER. It is getting to the point I definitely feel in order to protect the situation, because of vicious tactics used, we should have the equivalent of the meat-packers' consent decree, or we will have to write laws in the example of the tavern business. Most of the States have them. The Federal Government can do it-that no oil company can both be lessor and tenant. It is a bad combination, because the source of your supplies and sales is with the same people, and the rentals are based on what the dealer does.

Mr. FORISTEL. You are suggesting a divorcement between the production of petroleum products and the marketing thereof?

Mr. FABER. No. That is what you have been hearing and what you will hear. That is not far enough. If we are going to have divorcement I think certain people should say divorcement of transportation, production, refining, and marketing. But, gentlemen, marketing has two divisions. If you are going to recommend any segregation and divorcement between retailing and wholesaling, all that will be necessary for an oil company to do is to segregate its marketing from oil refining and production. They are still our suppliers; our landlord; so if there is any divorcement going to take place, divorcement retail from wholesaling, do not let anybody continue to give you that mystified name "marketing" because marketing is where the evils are. That is where the major oil company uses monopoly.

You have to divorce wholesaling from retailing.

I have some copies of ads in the Saturday Evening Post to show you how definite the feeling of the oil companies and the suppliers is. Here is an ad of the Lee Tire Corp., June 26, 1948, where they picture oil company signs. In the copy it says:

Look for the insignia paraded below. They mark those tire dealers who will serve you well.

Just because a dealer is selling this gasoline, the combination of these tire companies and the oil companies has gotten so brazen they will put ads in there and say they will guarantee where Phillips is you can get Lee tires. Why should they be telling where they are going to come from?

Mr. FORISTEL. What other signs are there?

Mr. FABER. High-speed gas, Atlantic, Signal gasoline and Phillips. Here is the Saturday Evening Post ad of August 28, 1948. It says:

The insignia below marks dealers who know good products, deal fairly, serve gladly. Lee tire dealers.

How can Lee run an ad of this type to the public in the Saturday Evening Post and guarantee where the signs are you will find Lee tires? That is how close the tie-up is between those people.

Mr. FORISTEL. Your inference is that the Lee Tire Corp. compels those oil corporations to merchandise the Lee tire?

Mr. FABER. NO; I would not put it that way. They have an arrangement between these particular oil companies and Lee Tire Co. that Lee tires will be in stations controlled by these oil companies.

Mr. FORISTEL. They are compelled to handle the Lee tires at those stations?

Mr. FABER. Yes. The ad will show that there is no choice here. They guarantee Lee at those stations to the public.

Mr. FORISTEL. To hook that up with your statement, would there also be an agreement between the oil companies and their dealers that no other tires would be sold in the places where those tires are displayed?

Mr. FABER. No; there would not be an agreement. That is the point. They do not ask us whether we want an agreement

Mr. FORISTEL. Is there an understanding or coercion?

Mr. FABER. Coercion is correct; a 1-year lease, a lease of 1-year duration; you do as we see fit or you are out.

Let us take another example this spring. The Standard Oil Co. of Indiana came to their dealers and said, "Your quota of tires is 600." How are they going to determine that with a man who has a real-estate lease with them, as an independent businessman, that they come and tell him what his quota is?

They come there and say, "According to the oil you are buying from us you are out of ratio. You should be selling more oil compared to gasoline." Maybe he should not buy it from them in the first place. He is paying them rent for the place. They say, "You are not selling enough oil compared with the gasoline you are selling." That is as far as they go. They may say, "There should be so many mufflers sold according to the gallons of gas you are selling." In other words, so many miles produces a certain number of broken-down mufflers.

Mr. FORISTEL. Have you had any dealers who have told you that there have been insinuations or coercion made, or practices whereby they are led to believe that if they do not increase their quota of oil of that particular company, they will not get gasoline from that company?

Mr. FABER. No; not so much on the gasoline. They do not get a new lease, or they might be getting a 6 months' lease, which brings them plenty of fear or they might not have a lease for a year, or let them struggle along for a while.

Mr. FORISTEL. Or they will not renew it at all?

Mr. FABER. They will not renew it at all. Maybe a dealer is a mighty good merchant; he exercises some independence, which is possibly why he is a successful merchant. We have a gentleman here who is going to appear before you who was in that state. He went

for 2 or 3 years without a lease. They did not want to lose him on account he is a good merchant; at the same time they wanted to keep him in that fear. That is bad. That is what is going on and going on continually.

Then, we have an ad of this type of the Standard Oil Co. of New Jersey, run in the Washington Times-Herald on June 29, 1948, showing the picture of a dealer wiping a windshield. They say, "He is not on continually.

We agree no dealer is on their pay roll but what we are trying to do is to get them off our pay roll because of their tactics, their insistence on our buying merchandise they designate, like the Firestone Tire & Rubber Co. The salesman comes in there and some days when things are not going good, the salesman of the oil company comes in too and they talk about merchandise.

Mr. FORISTEL. Firestone makes other products than tires?
Mr. FABER. I will leave this catalog.

Mr. STEVENSON. Bicycles, tires, rowboats, and so forth.

Mr. FABER. This is the wholesale catalog of the Firestone Co. as of July 1, 1947. Then the dealer who gets caught in this squeeze on the Firestone deal gets a double squeeze. The supplying oil company gets a commission on the merchandise that goes through the station, but, then Firestone in many instances will take a 75-cent item, give a 40-percent discount, so it costs the dealer 45 cents. Firestone, with big page ads in the same community, through their own company-controlled stores, sells it for 59 cents. It would not be so bad if they stopped at 59 cents, but occasionally they sell in their own stores in the same area where the dealers are forced to take the products through the oil company pressure, they will sell it for less than cost to the dealer.

Mr. STEVENSON. Through the Firestone stores?

Mr. FABER. Yes. The average discount is 40 percent. I will leave this catalog with the committee for study because you will find most of them running from 18 to 33 percent.

Mr. STEVENSON. Discount?

Mr. FABER. Yes. In competition with Firestone's prices he gets a bigger discount, but in order to sell he has to compete with their own advertising. Goodyear has some of that; Goodrich has some of it. If anybody can prove to me why Goodrich, Goodyear, or Firestone pays any oil company a commission on the merchandise that goes through those stations, unless there is something in return rather than cash, I do not know economics at all. I do not know much about that anyway.

Chairman STEVENSON. What is the return that might be gotten from that deal?

Mr. FABER. It might run from 5 to 10 percent. Occasionally some oil company when they institute such a program will pay the salesman who calls on the dealer half of that commission. That salesman is going to be very determined, if it is Firestone, that Goodrich products are not going to go in there. In fact, one oil company I know of has deals with two of them and they give a list to each one of the different suppliers of the stations he may put in if he wants to continue with their product. If the one fellow goes across the street, even though he knows this other operator sells his own products, if that

operator is not on that list he better not go over there because he is off the list entirely.

We have one oil company who has gone so far that it calls on all their dealers and gets them together. They are supposed to be independent businessmen. On the wall are charts where he sold so many gallons of gasoline; so many quarts of oil; so many tires. The only way they know how many that he sold is the source they are insisting upon. So the dealer should exercise a degree of independence. It looks very embarrassing there because he did not buy 100 percent through company sources.

Why should any oil company be put in that position? In other words, why should any oil company be putting my business before any other one, if I am considered an independent. That might be all right in the case of an employee, but salesmen should not use those tactics. My business should not be exposed before other dealers. Mr. FORISTEL. Have you anything else?

Mr. FABER. There is one more ad I would like to refer to. Here is an ad an oil company ran on the 4th of July. We arranged a deal for the dealers in Milwaukee so that they could sell tires on time payments and sell their paper to a finance company, the customer to pay for the financing. This oil company thought it was a good thing and immediately they went with a man from the financing company and wanted the dealers to pay the financing charges themselves. Not alone did they talk to them, but here is an ad that appeared in the Milwaukee papers, "No carrying charge."

Mr. FORISTEL. Is that the Shell Oil Co.?

Mr. FABER. That is right. Some of these dealers down here never gave permission for this. Permission should be gotten to run this ad. Now, that is the choice you have.

I will not take any more time of the committee. If there is time later I may have a few more things I would like to put into the record. Mr. STEVENSON. You may do that and we thank you for your contribution. It was very interesting and very helpful.

(Witness excused.)

STATEMENT OF ELMER ROHLFS

Mr. FORISTEL. State your name.

Mr. ROHLFS. Elmer Rohlfs.

Mr. FORISTEL. What is your business, sir?

Mr. ROHLFs. I am not in any business right now.

Mr. FORISTEL. What was your business?

Mr. ROHLFS. Service station.

Mr. FORISTEL. You may proceed.

Mr. ROHLFS. The only thing I can say is pressure. I had a Texas station. They told me I had to stay open until 10 o'clock at night. My hours were from 8 to 7. I said, "It is my business, and I will run it the way I want to." So I got a 10-day cancellation clause in the lease, and they canceled my lease.

Mr. FORISTEL. How long have you been in business?

Mr. ROHLFS. I was in from 1941 to 1946-6 years.

Mr. FORISTEL. Were you leasing from the Texaco Co. all of that time?

Mr. ROHLFS. That is right.