in American Telephone & Telegraph Co.? Well, what does that mean? I join with the pride of the company, but when they talk about the American Telephone & Telegraph Co. being owned by 1 million' people, they want us to forget that those 1 million people don't have anything to say about the management of the corporation. Corporate organization in the modern world has divided the responsibilities of ownership from the responsibilities of management. That is known to all economists and all lawyers, and has been a matter of common knowledge for almost 20 years. But we pay no attention to it.

And because a collectivist economy grows up with a few large corporations with hundreds of thousands of stockholders, we are finding it more and more difficult for the little independent people to break in. That is why we will always need a Committee on Small Business. Somehow or other we are hoping against hope that we can reestablish a free and open door for small business in the United States.

But we do not do the thing that is necessary to open that door, and that is to lay down the rules which organized business ought to follow and must follow. If once you lay down those rules, then you will no longer have to create Federal bureau after Federal bureau to tell them what they ought to do. Let Congress tell them what they ought to do in a law.

And, Mr. Chairman, since you asked me what to do about these cartels, I should ask permission to send up for the record a copy of a bill which I have been introducing for several years to require the registration of foreign cartels. It gives no power to any Government office to control them or to direct them, but merely requires that they shall lay their cards on the table so that the American people may know what they are doing.

You see the time that it has taken to find out about this statute in the Legislature of Ontario to defeat the processes of the courts of the United States and of the committees of Congress.

The CHAIRMAN. You do not have the number of the bill in mind, do you?

Senator O'MAHONEY. No; but I will send it up.

The CHAIRMAN. Yes; whatever the number is.

Senator O'MAHONEY. It is S. 11 of the Eighty-first Congress.

I did

not introduce it in this Congress, but I am going to do it pretty quickly

now.

The CHAIRMAN. It will be made a part of the record.

Senator O'MAHONEY. Thank you very much.

(S. 11 of the Eighty-first Congress is as follows:)

[S. 11, 81st Cong., 1st sess.]

A BILL To protect the foreign relations and to promote the trade and commerce of the United States, to require the disclosure to the United States of information affecting such trade and commerce and to safeguard the security of the United States

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That as used in this Act

(a) "Foreign contract" includes any contract, agreement, arrangement, or understanding, written or unwritten, now in force or hereinafter entered into (1) in which a domestic company or its affiliate, participates, and which (A) concerns trade, transactions, or commerce between the United States and any foreign country, or (B) restricts or limits the right of any domestic person to engage in trade, transactions, or commerce outside the United States; or (2) in which a foreign company or its affiliate participates and which (A) concerns trade, transactions, or commerce within the United States, or (B) concerns trade,

transactions, or commerce between the United States and any foreign country, or (C) restricts or limits the right of any domestic person to engage in trade, transactions, or commerce outside the United States.

(b) "Domestic company" includes any corporation, business trust, joint-stock company, partnership, limited partnership, syndicate, unincorporated association, or company, incorporated or organized under tht laws of the United States or any of its States, Territories, or possessions, or domiciled or residing in the United States.

(c) "Foreign company" includes any corporation, business trust, joint-stock company, partnership, limited partnership, syndicate, unincorporated association, or company, incorporated or organized under the laws of a foreign state, and any alien not domiciled or residing in the United States or any of its Territories or possessions.

(d) "Domestic person" includes any citizen of the United States, any alien domiciled or residing in the United States or any of its Territories or possessions, and any corporation, business trust, joint-stock company, partnership, limited partnership, syndicate, unincorporated association, or company, incorporated or organized under the laws of the United States or any of its States, Territories, or possessions, or domiciled or residing in the United States.

(e) "Affiliate" of a domestic or foreign company includes the agent, subsidiary, or parent of such domestic or foreign company, and also includes any domestic or foreign company controlled by or under common control with such domestic or foreign company.

(f) "Trade, transactions, or commerce" also includes "manufacture". (g) "United States" also includes Territories and possessions of the United States.

(h) "Commodity" includes goods, wares, merchandise, machinery, and any article of commerce of any nature whatsoever.

SEC. 2. It shall be the duty of each domestic company and of each foreign company doing business in the United States to register with the Attorney General a copy of any foreign contract (or if unwritten, a copy of the terms thereof) in which it or its affiliate participates and which contains in form or substance any of the following terms, conditions, or provisions:

(a) A restriction, limitation, or prohibition upon the amount, types, or kinds of commodities, or processes which any party to the contract, or any nonparty, shall be permitted or authorized to produce, manufacture, sell, use, lease, or purchase.

(b) An agreement as to the prices to be paid or to be charged for any amount, type, or kind of commodity or process bought from or sold to any third party.

(c) An allocation, division, or apportionment between parties to the contract, or between a party and any nonparty, of any territory or markets in which any operations or activities of any business shall be conducted.

(d) An agreement to form or to use, for the purpose of conducting joint operations or a joint venture, any corporation, partnership, unincorporated association, company, or legal person or entity.

(e) A license, cross-license, or sublicense in or under any United States or foreign patent or patent application, or any United States or foreign registered trade-mark or trade-mark application; or an agreement to grant in the future any such license, cross-license, or sublicense; or an agreement not to sue for the infringement of any patent or registered trade-mark.

(f) Any assignment of (or of any interest in) any United States or foreign patent or patent application, or any United States or foreign registered trademark or trade-mark application: Provided, however, That the provisions of this Act shall not apply to any foreign contract which is solely a contract of insurance, contract for personal services, bill of lading or forwarding agreement, bill of exchange, promissory note or other evidence of indebtedness, letter of credit, check or draft, a charter party for a vessel, or a contract or deed, when the interest transferred is not in excess of $50,000 for the sale, lease, or mortgage of real property.

SEC. 3 (a) Any existing foreign contract which is required to be registered shall be registered with the Attorney General within six months after the effective date of this Act; and any foreign contract required to be registered which is hereafter entered into shall within sixty days thereafter be registered; (b) Foreign contracts registered under this Act shall be public records and open to public examination and inspection at such reasonable hours, under such regulation, as the Attorney General may prescribe, except hat, upon the petition of any party to a foreign contract, the Attorney General shall determine whether public disclosure will result in the disclosure of a trade secret and

shall withdraw from public disclosure all or any part of such foreign contract as may be necessary in order to prevent the disclosure of a trade secret. SEC. 4. The Attorney General shall have power

(a) To permit a summary of any foreign contract or any class of foreign contracts to be filed in lieu of the full contract, provided such summary makes full disclosure of the terms and provisions of such contract.

(b) To extend the time for registration of any foreign contract or any class of foreign contracts whenever he finds extension justified by special circumstances.

(c) To make, prescribe, amend, or rescind any rules, regulations, and forms necessary to carry out the provisions and policy of this Act.

SEC. 5. Whenever a foreign or domestic company shall violate any of the provisions of this Act, such violation shall be deemed to be also that of such persons who are individual directors, officers, partners, or agents of such company and who shall have authorized, ordered, or done and of the acts constituting in whole or in part such violation; or, when such violation arises out of the failure to register a foreign contract, shall have knowingly failed to have the foreign contract registered when such action lies within the scope of their authority.

SEC. 6. (a) If any foreign or domestic company violates this Act, or any rule or regulation promulgated hereunder, by failing to file any foreign contract, as herein provided, then such company shall be subject to a civil penalty of $250 for the first day of such violation, $25 for each succeeding day thereafter until the contract shall have been filed. The Attorney General may institute, in the name of the United States, a suit to recover the civil penalty provided for in this section, but no such suit shall be instituted more than one year subsequent to the discovery by the Attorney General of the fact of such violation. (b) Any foreign or domestic company or person violating this Act, or any rule or regulation promulgated hereunder, by willfully failing to file any foreign contract, as herein provided, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding $5,000 or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

(c) The willful making of any false or fraudulent statement or registration under this Act, or under any rule or regulation promulgated hereunder, shall be a violation of section 35 (a) of the Criminal Code, as amended (18 U. S. C., sec. 80).

(d) In the event of any failure to comply with the provisions of this Act or any rule or regulation promulgated hereunder, the Attorney General may institute a suit, in any district court of the United States (or in any other United States court of original jurisdiction in the Territories or possessions of the United States outside continental United States), for a mandatory injunction to compel full compliance therewith.

SEC. 7. Nothing contained in this Act shall be construed to prevent or interfere with the enforcement of the provisions of the Antitrust Acts or the Acts to regulate commerce, nor shall anything contained in the Act be construed to alter, modify, or repeal the said Antitrust Acts or the Acts to regulate commerce, nor shall anything contained in the Act be construed to alter, modify, or repeal the said Antitrust Acts or the Acts to regulate commerce, or any part or parts thereof. The registration of any foreign contract as required by this Act shall not confer any immunity from the enforcement of the provisions of the Antitrust Acts or the Acts to regulate commerce.

SEC. 8. The Attorney General shall, from time to time, make a report to the Congress concerning the foreign contracts registered under this Act. SEC. 9. This Act may be cited as the "Foreign Contracts Act”.

Senator BENTON. May I say that it has been a great privilege to be here to listen to you this morning, Senator O'Mahoney. You remind me of a quotation from William the Silent: "It is not necessary to have in order to undertake or to succeed in order to persevere.” I congratulate you, sir.

The CHAIRMAN. Thank you very much, Senator O'Mahoney.

All right, Senator Benton. We are very glad to have you with us, as you are a former member of our committee, and we regretted it very much when you had to leave us. We are happy to have you with us this morning and to get your comments upon the topics under consideration here on Committee Structure and Operation, and any other topics that

we have listed here to be considered. You may just proceed in your

own way.

STATEMENT OF HON. WILLIAM BENTON, A UNITED STATES SENATOR FROM THE STATE OF CONNECTICUT

Senator BENTON. Thank you so much, Mr. Chairman.

First, let me make a quick comment on one point brought out by Senator O'Mahoney-the relationship between the rise of socialism in England and the British cartel. This relationship is very little understood in this country. I have come to the same conclusion as has Senator O'Mahoney, on this subject, out of my own long interest in the British economy.

That is just a footnote to his interesting testimony.

Mr. Chairman, I congratulate you and your committee on undertaking these hearings. Indeed, I think the quotation I have just given from William the Silent applies to this group here today and to your projected hearings. In my judgment, you are dealing here with one of the most important subjects in the entire world. It is not too much to say that much of the future of the world may depend on how well we can make our Congress function.

I think a man must work here in Washington for some time, possibly even serve in the Senate itself, in order to discover how terribly important one single Senator is. I remember when I left the State Department to go back to Connecticut, I told my friends that I would never again take an administrative job in Washington unless I felt I owned a piece of one Senator. To an administrative officer, one Senator who knows him and is friendly to him, and has an interest in what he is trying to do, can make all the difference between his success and his failure in his administrative and executive operations. If he has one Senator who is prepared to get up and defend him, and stand up for him, other Members of the Senate are far more cautious, are far slower to go after him or to attack him, are far more careful to get the facts and to avoid possible injustice.

The reasons one Senator is of such great importance are not generally understood by the American people or the business community. One reason is that most of our great pieces of legislation are formulated and put through the Senate by perhaps three, four, five, six, or seven Senators. This makes a small group or even a single Senator potentially decisive on crucial pieces of legislation. I like, therefore, to have a small group of this kind here today, such as your committee. If it wants to move in and do a job on the organizing of the Congress, perhaps it can get it done. I know this, if it is done, it will be this small group that will get it done, and not the Congress as a whole. Now, I wish, Mr. Chairman, listening to Senator Moody's comment just now about the Banking and Currency Committee, on whose hearings I have been spending most of my time this last month, and for membership on which I so regretfully resigned from your own committee-I wish our great business and trade associations saw this problem here in Congress in perspective. I wish they would interest themselves in it and would take some real leadership on these acute problems, instead of concentrating their efforts, as most of them do, on interests and testimony wholly within the narrow sphere of what they conceive to be their immediate and selfish business interests.

I congratulate Mr. Robert Heller of Cleveland, who is almost unique among businessmen in the leadership he has tried to take in his studies and efforts in this area, and I commend him to you as a possible witness before you finish your hearings.

The CHAIRMAN. Yes. He is scheduled to appear.

Senator BENTON. Mr. Chairman, there were three reasons why I felt qualified to come to testify today, perhaps better qualified than my short service of 18 months in the Senate would indicate.

First, as I am sure some of you know, I have had three previous jobs here in Washington; thus I have had the chance to observe the Congress from several vantage points.

Secondly, I have had experience in organizing, leading, and developing several businesses. Further, I spent 9 years as a part-time officer at one of our great universities. In business and education are many problems similar to those we face here. Further, the fact that I have only been here 18 months in the Senate, as I was telling Senator Monroney only yesterday, perhaps gives me even a sharper and more. pointed focus on some of the questions that I want to discuss with you today than some of my seniors who have been here so long that they are not equally conscious of the extent of the problems, particularly for a newcomer.

I remember one of the young newspapermen who used to cover me last year, in my first year of the Senate-he commented on the many anecdotes and stories and fresh observations that I had for him during my first 6 months. When the time came when I did not have so many for him any more, he told me that I was getting jaded. Thus, I think that with long experience in the Senate it is natural that Senators tend to forget the acuteness of some of these problems, or even to lose perspective on them.

Thirdly, Mr. Chairman, I do not think I will be accused in my State of self-seeking, because of the many suggestions that I am going to make to you today. This fact perhaps puts me in a better position to advocate some of these proposed reforms than would be true of some other members of the Congress. It is the fear of this charge of selfseeking that has kept the Congress from legislating many of these reforms years ago.

Now, Mr. Chairman, compared to the high-level discussion just presented to you by Senator O'Mahoney, I am afraid that many of my ideas are going to seem to be low-level, indeed. However, it is my judgment that also at the lower levels are these questions of efficiency determined.

I happen to think that at some of these humblest levels rest many of the most important recommendations by your committee which, with your leadership, I hope can be put through the Congress.

I have often thought, Mr. Chairman, that the United States Senate, as a group, can only be called specialists in self-abuse. I have never seen a group of men who flagellate themselves under worse circumstances than our 96 Senators. Indeed, in view of the way we abuse ourselves and fail to take care of ourselves, it is amazing to me how successfully we operate and how well we do.

About the only perquisite that we give ourselves is a free haircut, and even there I suppose most of the Senators tip the barber about as much as it would cost them to go and buy the haircut. But if we