The CHAIRMAN. Let the governor speak. Mr. MILLER. He knows the price published by the bidder or the seller nearest to the point of delivery. The CHAIRMAN. He knows the price? Mr. MILLER. Now, he may, in order to get the business, decide to cut it, and in many cases no doubt does. He may decide to submit a bid to meet the price which he thinks the nearest man to the point of delivery is likely to quote, and if he does do that, he is bound to arrive at the same result, if he makes his mathematical computation accurately. You have referred to the Cement case Mr. WILLIS. You are not defending that, I know. Mr. WILLIS. Are you still defending it? Mr. MILLER. I would defend it now, and I state to you that the undisputed testimony of the people who made those prices, they went on the witness stand and produced the exact figures, the exact computation of how they were arrived at, but the Commission found, just as you are inferring, that they could not possibly have arrived at the same result unless they had done it by collusion. Mr. WILLIS. Well, I did not read the Commission report. I read the Supreme Court report, and it seems to me you are in disagreement with the Supreme Court of the United States. That is all I can make out of it. Mr. BRYSON. You are predicating your position on the theory that figures do not lie, but sometimes liars figure. Mr. MILLER. That is correct. Mr. AUSTIN. The chairman mentioned that there were hundreds of examples that could be used. The CHAIRMAN. We will ask one more question, and then we will adjourn for the day. Mr. LEVI. Mr. Fairless, as a matter of fact, the reason for this identity of bids in this field of stainless steel was because your company had a price-fixing agreement with the other companies; was it not? Mr. FAIRLESS. Absolutely not. Mr. LEVI. Was your company indicted in the Alleghany-Ludlum case for violating the antitrust laws on stainless steel? Mr. FAIRLESS. Governor Miller The CHAIRMAN. Do you not know that, Mr. Fairless? to know whether you know that you were indicted. indictment brought against your company? Mr. FAIRLESS. Carnegie-Illinois was indicted. I would like Was not an Mr. LEVI. And what was the result of that case? Did Carnegie Illinois pay fines? Mr. MILLER. I can tell you what the result was. The CHAIRMAN. Don't you know, Mr. Fairless? Mr. FAIRLESS. Well, now this is litigation. You are asking for facts, and we will give them to you. The CHAIRMAN. I know, but I am asking you. You are the presi dent of a very substantial company. An indictment is a very im portant factor. You say you know there was an indictment. What happened to the indictment? Was the fine paid? Mr. FAIRLESS. I would prefer to have the governor answer. The CHAIRMAN. Wait a minute, Mr. Fairless. If you do not know that, you do not know what something highly important is in your company. Mr. FAIRLESS. Mr. Chairman, after all, I am president of the United States Steel Corp., and as such, I could not possibly be in touch with all of the facts and all the details of every branch of this great corporation's activities. Now you have asked a question here. This committee deserves the facts, and that is what I understand we are meeting for. Now, Governor Miller, who is in charge of our counselThe CHAIRMAN. I am not going to ask Governor Miller. Mr. FAIRLESS. I am not going to answer legal questions. The CHAIRMAN. It is not a legal question. If you operate a company that is so large that you cannot know whether a fine was paid, then I think there is something wrong with the company. Now, was there a fine paid, Mr. Fairless? If you cannot answer, tell us that you cannot answer, or that you do not know. Mr. FAIRLESS. I want Governor Miller to answer it. This is a long time ago, and I do not frankly recall all of the facts surrounding this case. The CHAIRMAN. This was in 1944 and 1945, I think, 5 years ago. Mr. FAIRLESS. I still request that Governor Miller be permittedThe CHAIRMAN. I will bow, and have Governor Miller answer whether there was a fine paid or not. Mr. MILLER. Yes, a fine was paid, a small fine, a nominal fine. Mr. MILLER. I have forgotten it. It was only a very small sum. Mr. LEVI. Was it the maximum fine under the statute? Mr. MILLER. I do not think so. I have forgotten. I can tell you what happened in that case, if you want to know. The CHAIRMAN. Our records show that it was a fine in the maximum amount of $5,000. Mr. MILLER. Well, I think it probably was $5,000. The CHAIRMAN. There were two counts, Governor. We checked the record. They were found guilty on two counts, and the maximum fine was inflicted in each count, and the company paid a fine of $10,000. Mr. MILLER. It probably did, but do you want to know what the facts were? The CHAIRMAN. Governor, you say that is a nominal fine? The CHAIRMAN. Do you not think, therefore, we should increase the penalties for violation of antitrust laws? Mr. MILLER. I would not object at all if you did, sir. The CHAIRMAN. This committee has approved, the Judiciary Committee of the House, has approved a bill offered by our distinguished colleague from Pennsylvania, Mr. Walters, increasing the fines from $5,000 to $50,000. Mr. MILLER. I would not object to that at all, nor would the United States Steel Corp., or any director of the United States Steel Corp. object to your making it high enough to be effective. If $50,000 is not enough, I would make it more. The CHAIRMAN. I hope that you will help us get that bill through. Mr. MILLER. Well, we are not taking any active part, Mr. Congressman, in legislation, as you probably know. The CHAIRMAN. You will not hinder us in getting it through! Mr. MILLER. We certainly will not, but I would like to tell you about what happened in this lawsuit, very briefly, because the bare statement here that we were indicted, and that we paid a fine, without an explanation of what really occurred, creates a misleading im pression. Now, if you do not want to hear it-that is an explanation. Mr. MILLER. I forget the number, but there was a large number, 18, that were indicted in the State of New Jersey in the 1940's, in the early 1940's, charged with collusion. That case dragged along for a long time. Nothing was done about it. We were at war. The Department of Justices' main point in that indictment was they were seeking to bring about an arrangement under which the producers would quote mill prices, and finally we agreed to do that. The CHAIRMAN. Do you deem yourself innocent of the charges? Mr. MILLER. Most decidedly, sir. The CHAIRMAN. Nonetheless, what was the plea that you entered! Mr. MILLER. I think it was nolo contendere. The CHAIRMAN. And despite the fact that you thought you were innocent, you offered a plea of nolo contendere, that you did not want to contest the issues? Mr. MILLER. That is quite true. We were engaged in too many important affairs to have our attention, and the attention of the people that we would have had to have in the case of a trial, diverted from work which they were doing in the war effort, and the proposal was made without any admission whatsoever of guilt, that the Department of Justice would accept a fine and enter into a stipulation, which was done, under which a decree was entered providing for the establishment of mill prices, and that was the real point at issue. The CHAIRMAN. Despite the innocence that you maintain, you paid a fine of $10,000. Mr. MILLER. Yes, sir. The CHAIRMAN. And the Government did not nolle pros that case, did it? Mr. MILLER. No. The CHAIRMAN. You entered a plea of nolo contendere? Mr. MILLER. That is right. The CHAIRMAN. There is a big difference between the two situations. The Chair is going to ask the Department of Justice for its version of this transaction and this indictment, and this plea of nolo contendere, and I hope to have the version given me by the Department of Justice tomorrow, when we meet at 10 o'clock. The meeting will now adjourn. (Whereupon, at 4:45 p. m., the hearing was adjourned to reconvene at 10 a. m., Friday, April 28, 1950.) STUDY OF MONOPOLY POWER FRIDAY, APRIL 28, 1950 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON THE STUDY OF MONOPOLY POWER OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The special subcommittee met, pursuant to adjournment, at 10 a. m., in room 346, Old House Office Building, Hon. Emanuel Celler (chairman) presiding. Present: Representatives Celler, Bryson, Wilson, Willis, Michener, and McCulloch. Also present: Edward H. Levi, counsel to the subcommittee. The CHAIRMAN. The session of this committee will come to order. When we terminated yesterday, there was a colloquy between myself and distinguished counsel for the United States Steel Corp., Governor Miller. I will read it briefly: The CHAIRMAN. Do you deem yourself innocent of the charges? The CHAIRMAN. Nonetheless, what was the plea that you entered? The CHAIRMAN. And despite the fact that you thought you were innocent, you offered a plea of nolo contendere, that you did not want to contest the issues? Mr. MILLER. That is quite true. We were engaged in too many important affairs to have our attention, and the attention of the people that we would have had to have in the case of a trial, diverted from work which they were doing in the war effort, and the proposal was made without any admission whatsoever of guilt, that the Department of Justice would accept a fine and enter into a stipulation, which was done, under which a decree was entered providing for the establishment of mill prices, and that was the real point at issue. The CHAIRMAN. Despite the innocence that you maintain, you paid a fine of $10,000? Mr. MILLER. Yes, sir. The CHAIRMAN. And the Government did not nolle pros that case; did it? The CHAIRMAN. You entered a plea of nolo contendere? Mr. MILLER. That is right. The CHAIRMAN. There is a big difference between the two situations. The Chair is going to ask the Department of Justice for its version of this transaction and this indictment, and this plea of nolo contendere, and I hope to have the version given me by the Department of Justice tomorrow, when we meet at 10 o'clock. In pursuant of that, I communicated with Mr. Herbert Bergson, head of the Antitrust Division of the Department of Justice. I am going to interrupt the proceedings and the interrogation of Mr. Fairless, who has been very patient, and I hope he will be a little more patient, so that Mr. Bergson can give the version of this case from the Department of Justice angle. Is Mr. Bergson present? Would you mind coming forward to the front table, please? STATEMENT OF HERBERT A. BERGSON, ASSISTANT ATTORNEY GENERAL IN CHARGE OF THE ANTITRUST DIVISION, DEPARTMENT OF JUSTICE The CHAIRMAN. You are familiar with the Allegheny Ludlum case, Mr. Bergson? Mr. BERGSON. Yes; I am. The CHAIRMAN. Will you state your version of that case and say something with reference to the indictment and the pleas that were entered and the results thereof? Mr. BERGSON. In November 1944 an indictment was returned in the United States District Court for the District of New Jersey, charging the Carnegie-Illinois Steel Corp., a wholly owned subsidiary of United States Steel, 17 other steel manufacturers, and six of their officers with conspiracy to fix and maintain prices on stainless steel in violation of the Sherman Act. The indictment was in two counts, one charging violation of section 1 of the act, and the other charging violation of section 2 of the act. The indictment charged that beginning in 1934 and continuously until the time of the indictment the defendants and the coconspirators engaged in an unlawful conspiracy arbitrarily to fix and maintain uniform and noncompetitive prices, terms, and conditions for the sale of stainless steel finished products sold in the United States. It charged that the conspiracy was developed and carried out in the following manner: 1. From time to time the defendants or their representatives met together at stainless-steel industry meetings, which were usually held at the Duquesne Club, in Pittsburgh, or the Biltmore Hotel, in New York, or at White Sulphur Springs, W. Va., or Hershey, Pa. In 1934 at such meetings the defendants and the co-conspirators decided to make use of the patent licenses held by them from the Chemical Foundation. They therefore agreed to accept amendments to their patent licenses, which ostensibly would give the foundation the right to fix and establish prices for stainless-steel finished products made and sold thereunder. The foundation on its part agreed to adopt and announced formally prices and extras for such products as agreed upon at the industry meeting. 2. These prices, extras, terms, and conditions of sale, as agreed upon in industry meetings, were formally confirmed by the foundation in letters to its licensees and also in printed booklets. While these letters and booklets purported to deal only with products licensed by the foundation, the defendants adopted the agreedupon extras, terms, and conditions of sale therein for the sale of all types of stainless-steel finished products they manufactured and sold. 3. The defendants also agreed at industry meetings that the base prices for stainless-steel finished products should be published by the defendant Sharon and used by the defendants in computing, publishing, and determining their own base prices for all types of stainlesssteel products. |