Mr. BLATNIK. They are not in it. Mr. McCULLOCH. Bethlehem, Republic, or National Steel; are they in that group? Mr. BLATNIK. I just can't remember. Youngstown Sheet & Tube is in there, and I think Republic Steel is in there and two other companies, and Oglebay-Norton. Mr. MICHENER. Were you in the room yesterday, or possibly day before yesterday, when the engineer, whose name I forget, testified. He was accompanied by a Swedish engineer. He testified that there is a new process whereby they can use this very lowest grade ore in the South to manufacture a sponge, whatever that is, and all in little plants and with gas and water power and electric power, without coal, and that if someone will just encourage the project, every little town will have a furnace and it will not be necessary to go way up in our country to develop the ore, as is being done now. Mr. BLATNIK. I am not familiar with that testimony. The CHAIRMAN. Thank you very much, Mr. Blatnik. We appreciate your coming. The Chair wishes to announce the program for next week: On Monday and Wednesday, we will act as legislative committee and consider the Denton bill offered by our distinguished colleague from Indiana, Mr. Denton. Tuesday morning we will resume activities as the inquiring committee. We will now adjourn until Tuesday at 10 o'clock. (Whereupon, at 4:45 p. m., the committee adjourned to reconvene at 10 a. m. Tuesday, May 9, 1950) STUDY OF MONOPOLY POWER TUESDAY, MAY 9, 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 2 p. m., in room 346, Old House Office Building, Hon. Emanuel Celler (chairman) presiding. Present: Representatives Celler, Bryson, Lane, Wilson, Denton, Michener, Keating, and McCulloch. Also present: Edward H. Levi, counsel to the subcommittee. Our first witness this afternoon is Mr. Leo G. Tokoph of Chicago. The CHAIRMAN. Step over, Mr. Tokoph. Give your name, your firm, and your address to the stenographer, please. STATEMENT OF LEO G. TOKOPH, LEO G. TOKOPH & SONS, CHICAGO, ILL. Mr. TOKOPн. My name is Leo G. Tokoph, T-o-k-o-p-h, Independent Builders' Supply, Chicago, Ill. Mr. LEVI. Would you state the nature of your business, Mr. Tokoph? Mr. TокOPH. Jobbers for wire products; nails; contractors mesh. Mr. LEVI. Where do you buy these products from? Mr. TOKOPн. Wherever I can buy them. Mr. LEVI. Would you state the names of the companies from which you purchased these products? Mr. TокоPH. Central States Steel; other jobbers, we can't buy any from the mill, so we have to go to the jobbers for outlets. Mr. LEVI. Why can't you buy any from the mill? Mr. TOKOPн. I don't know. Mr. LEVI. Have you ever been able to buy them from the mill? Mr. LEVI. Are you now able to get them from other jobbers? Mr. TOKOPн. Not too many. Mr. LEVI. Can you state the quantity that you would normally buy from other jobbers? Mr. TOKOPн. Well, in 1948, I would say-Do you want it in dollars and cents or in the kegs? Mr. LEVI. Perhaps you should give it to us both ways. Mr. TокоPн. In 1948, it was 40,000 kegs representing about $375,000. Mr. LEVI. And are you able to buy that amount now? Mr. TOKOPн. Couldn't buy anywhere near it, and I could not buy it anywhere in 1948 without going out in the open market and bidding for it. Mr. LEVI. What do you think is your reason for your inability to buy any of these products? Mr. TOKOPн. Well, there is either a shortage, factual or not I do not know-it is my opinion, and my opinion comes from people on whom I call, that the mills are selling these nails retail to industrial organizations with their own sales force. Mr. LEVI. In other words, you find yourself in the situation of competing with the mills for customers? Mr. TOKOPн. Well, yes, I would say that. Mr. LEVI. And in a time of shortage they have preferred their own sales force? Mr. TOKOPн. They evidently prefer their own sales force, and people with whom they have been doing business for a good many years, than doing business with me. Mr. LEVI. Is this situation serious with you? Mr. TOKOPн. Very serious. I can't continue in business. Mr. LEVI. Do you know whether a similar situation has existed for other firms in your same line? Mr. TOKOPн. I do. Mr. LEVI. Would you state the name of any other firm which is in a similar situation? Mr. TOKOPн. Atlas Nail Co., Chicago; Manufacturers' Representatives of Chicago. Mr. LEVI. Did any of these firms go out of business? Mr. TOKOPн. Yes, the Atlas Nail Co. has gone out of business, because of their inability to obtain material. Mr. WILSON. Do you just sell nails alone? Mr. TOкOPH. Nails, mesh. Mr. WILSON. Has there been a shortage in your estimation? Mr. TOKOPн. If there hasn't been, I don't know why I should not be able to get them. Mr. WILSON. In your belief, there has been a shortage? Mr. TOкOPH. Yes; there has been a continuous shortage since the end of the war and there is still a shortage. Mr. WILSON. In case of a shortage in your business, do you prefer your old customers or the ones who come to you Johnny-come-lately! Mr. TоKOPH. I believe if the mills were selling to their jobbers and distributors they would have enough for everyone, but they are selling directly to the end users. is. Mr. WILSON. You mean they are retailing them? Mr. TокоPH. That is right. I don't know what their pricing system Mr. WILSON. You did not answer my question. In case of shortage in your business, do you prefer your old customers that have been with you to some man who is just buying with you this trip and may never see you again? Mr. TOKOPH. I would try to help everybody. That man's business is just as important as my old customers'. While I wouldn't give him all the consideration, I would certainly help him if I could. Mr. WILSON. In other words, you would sell the new man who just came because you had the product? Mr. TOKOPн. If I could; if I could, yes, sir. Mr. WILSON. And you would give him equally as much? Mr. TOKOPн. No, I can't say that. Mr. WILSON. Then, you would prefer your old customers, wouldn't you? Mr. TOKOPн. Beg your pardon? Mr. WILSON. You would prefer your old customers? Mr. TOKOPн. Naturally. Mr. WILSON. That is human nature, isn't it? Mr. TOKоPH. Naturally, I don't know where there is a shortage existing. Mr. WILSON. I thought you said there was. Mr. TOKOPн. There evidently is. That is the information they give me through the mills. Mr. WILSON. Do you doubt whether there is any shortage? Mr. TOKOPн. I don't know what to think. I have no access to the mills' books to know what their output is or what they do with it. Mr. WILSON. You just know that you are not able to get all you want? Mr. TоKOPH. That is right, along with some other people. Mr. WILSON. That is all. The CHAIRMAN. Thank you very much. Our second witness this afternoon will be Mr. Robert S. Waters, president of the National Radiator Co. of Johnstown, Pa. STATEMENT OF ROBERT S. WATERS, PRESIDENT, THE NATIONAL RADIATOR CO., JOHNSTOWN, PA. Mr. WATERS. Mr. Chairman and gentlemen. My name is Robert S. Waters, president, the National Radiator Co., Johnstown, Pa. My appearance here today is the outcome of my concern over press reports of the hearings before your committee. I have not read any of the testimony and realize that press reports are not complete and may be biased one way or the other, but I gather that an attack is being made upon big business simply because it is big, and carrying the implication that if size were limited there would be a benefit to so-called little business. The CHAIRMAN. At this point the Chair would like to make a statement. The Chair has seen similar statements to the one you have made, sir, and imputations have been made concerning my attitude, and I desire, for the record, to give my attitude, my personal attitude. We are examining the antitrust laws in regard to present economic facts, to determine whether there are some industrial concerns which have so overdeveloped that they, in the words of Justice Douglas of the Supreme Court, "tend to develop into a government," in themselves. It is not my contention that a uniform standard of size be imposed upon any business. There are many businesses today which for reasons of efficiency and because of the very nature of their product, must be big; but there are others which control basic sources of supply, which control the means of transporting such supplies, which compete in end products with the very customers they supply with the 96347-50-ser. 14, pt. 4a- -59 basic material which, in financial and foreign relations, has a very serious impact upon the economy of the Nation and upon the conduct of our foreign affairs. I wish to make no blanket accusations. I say that when such conditions do exist, it is a most legitimate area of inquiry, and where they do exist they threaten our free and competitive system. I personally I repeat, I personally-am against Government regulation in the matter of prices charged, or Government regulation in the operations of any business of the nature of the businesses that we are making inquiry into. I am opposed to their being even regarded by the Government as public utilities. My idea is to restore free and open competition. I thought it would be helpful and well to offer that statement, because I noticed your statement indicated an attack is made upon big business simply because it is big. You may proceed. Mr. WATERS. Yes, sir. Mr. BRYSON. Mr. Chairman, I would like to say that I think the Chair has made a fine statement, and I concur in it. There have been stories in the press that there was some idea being promoted by this committee that business was evil if it was large, if it was great; that big business is evil per se. We have had differences of opinion about much of the testimony that has been given here and no doubt will continue to differ in our views, but I think the chairman has stated my views in that regard. Mr. WATERS. This attack and this implication disturbs me much more as an American citizen than as a small-business man, because, after 30 years of experience, I cannot agree that all big business is bad any more that I could agree that all small business is good. I believe that forcing the dissolution of big business as such will not bring about healthier competition for the benefit of small business, but on the contrary will be detrimental to our economy and to the national welfare. Furthermore, I believe that the apparent keynote of these hearings sounds ominously in the direction of increased governmental regulation not only of the steel business in which I am indirectly interested but of all business. The CHAIRMAN. You noticed in my statement, if you will forgive the interruption, that that is quite contrary to the purposes of the chairman in originating this inquiry and acting as chairman of the committee investigating various types of business. Mr. WATERS. That is merely the opinion that I have gotten from reading the accounts of the proceedings in the press. I have not read any of the formal testimony. The CHAIRMAN. The volumes are available to you, and I hope that you will take the time and trouble to read the volumes that have been printed. They are very interesting, and I think they will be very helpful to you. Mr. BRYSON. Mr. Chairman, the testimony is voluminous, and the Legislative Reference has prepared a recapitulation of the testimony, and this is available; you can get the substance of it in a very concrete form. Mr. WATERS. You say that is available? Mr. BRYSON. Yes. |