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    "ocrText": "The original documents are located in Box 2, folder \"Antitrust - General\" of the John\nMarsh Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 2 of The John Marsh Files at the Gerald R. Ford Presidential Library\nTHE WHITE HOUSE\nWASHINGTON\nMay 1, 1976\nMEMORANDUM TO:\nTHE PRESIDENT\nFROM:\nED SCHMULTS\nDas\nSUBJECT:\nYour meeting with John Rhodes today\nJack Marsh advises that John Rhodes may wish to discuss the\npending antitrust bills at your 9:30 meeting today.\nOn April 29 I called on Mr. Rhodes to seek his views about the\nvarious antitrust bills pending in Congress. He seemed to be familiar\nwith only the parens patriae legislation, which the House has passed.\nMr. Rhodes continues to believe that this legislation should be\nvetoed, and is doubtful that it can be modified in any acceptable way.\nAttached is a copy of your letter to Rhodes on parens patriae.\nA subcommittee of the House Judiciary Committee has voted out\nunanimously the Civil Process Act Amendments which will be taken\nup by the full committee in three weeks. This bill is very close to\nthe Administration's proposal, which you asked Chairman Rodino to\nact on in a recent letter. The Senate Omnibus antitrust legislation\nhas been marked up by the full Judiciary Committee, and Senators\nHart and Scott have asked the Administration to enter into negotiations\nwith a view to obtain a mutually acceptable bill.\nWe have scheduled a meeting with you on May 4 to discuss the pending\nantitrust legislation. In view of that meeting I recommend that you\nnot commit yourself, one way or another, to Congressman Rhodes.\nFORD is LIBRARY GERALD\nOffice of the Unite llouse Press Secretary\nTHE WHITE HOUSE\nTEXT OF 1 LETTER BY THE PRESIDENT\nTO REPRESENTATIVE JOHN J. RHODES\nMarch 17, 1976\nDear John:\nAs I outlined to you on Tuesday, March 16, I support vigorous antitrust enforcement,\nbut I have serious reservations concerning the parens patriae concept set forth in\nthe present version of H.R. 8532.\nI question whether federal legislation is desirable which authorizes a state\nattorney general to sue on behalf of the state's citizens to recover treble damages\nthat result from violations of the federal antitrust laws. The states have the\nability to amend their own antitrust laws to authorize parens patriae suits in\ntheir own courts. If a state legislature, acting for its own citizens, is not\nconvinced the parens patrice concept is sound policy, the Administration questions\nwhether the Congress should bypass the state legislatures and provide state attorneys\ngeneral with access to the federal courts to enforce it.\nIn addition to ny reservations about the principle of parens patriae, I are concerned\nabout some specific provisions of the legislation developed by the House Judiciary\nCommittee.\nThe present bill is too broad in its reach and should be narrowed to price fixing\nviolations. This would concentrate the enforcement on the most important anti-\ntrust violations.\nIn addition, the Administration is opposed to mandatory treble damage awards in parens\npatriae suits, preferring instead a provision which would limit awards only to the\ndamages that actually result from the violation. The view that federal penalties\nwere inadequate, which has been used to justify mandatory treble damages in the past,\nis no longer justifiable given the substantial increases in these penalties in\nrecent years.\nThe Administration opposes extension of the statistical aggregation of damages,\nbeyond parens patriae legislation, to private class action suits because this is\noutside of the appropriate reach of this legislation.\nFinally, the Administration prefers discretionary rather than mandatory award of\nattorney's fees, leaving such awards to the discretion of the courts.\nDuring the last two years, the Administration has sought to improve federal\nenforcement efforts in the antitrust area and the resources devoted to antitrust\nenforcement have increased substantially. In December 1974, I signed the Antitrust\nPenalties and Procedures Act which increased maximum penalties from $50,000 to $1 Billion\nfor corporations and $100,000 for individuals. As I indicated above, I support\nvigorous antitrust enforcement, but I do not believe H.R. 8532 is a responsible way\nto enforce federal antitrust laws.\nSincerely,\n&\nFORD\n/s/ Gerald R. Ford\nRALD\nThe Honorable John J. Rhodes\nLIBRARY\nMinority Lender\nHouse of Representatives\nWashington, D.C. 20515\nTHE WHITE HOUSE\nWASHINGTON\nAugust 4, 1976\nMEMORANDUM FOR:\nED SCHMULTS\nFROM:\nYesterday during the Congressional Dennis Taylor,\nJACK MARSH Jul\nCongressman John Rhodes' Legislative Assistant, brought to\nmy attention the plan that is being discussed in the House\nconcerning anti-trust legislation.\nDennis says the present proposal is to lump in one package\nthe three anti-trust measures passed by the House and send\nthem as one bill to the Senate, and the purpose of his con-\nversation was to inquire as to what would be the Administra-\ntion's position on parens patriae which is one of the pro-\nvisions.\nI indicated to Dennis that I felt the President's view on\nparens patriae had not significantly changed and before they\nproceed too far, there should be some further discussions and\nconferences. I think it would be very helpful if you could\ntouch base with Dennis Taylor and mention this matter to him.\nHis telephone number is 225-0608.\nMax and I will be glad to meet with you and go over this some-\ntime when you would like.\nMany thanks.\nCC: Max Friedersdorf\nFORD is LIBRARY GERALD\nAUG 1 0 1976\nTHE WHITE HOUSE\nWASHINGTON\nAugust 10, 1976\nMEMORANDUM FOR:\nLARRY SPEAKES\nFROM:\nKEN LAZARUS th\nJack Marsh asked our office to provide you with some guidance in\nfashioning a response to inquiries arising from the news reports\nof an antitrust investigation of the auto manufacturers (see Tab A).\nAttached (at Tab B) is some background information on the subject\nprovided by the Antitrust Division of the Department of Justice.\nThe Department recommends that any questions which are received\non this matter be referred to them for response. However, I have\nbeen apprised of the fact that all of this information is already a\nmatter of public record.\ncy to Schmults\ndo\nAttachments\ncc: Phil Buchen\nJack Marsh\nFORD i LIBRARY GERALD\nTAB\nA\n6817 BALD P. FORD\nKen\nTHE WHITE HOUSE\nWASHINGTON\nAugust 5, 1976\nMEMORANDUM FOR: PHIL BUCHEN\nFROM:\nAs you are aware, that there will\nJACK there MARSH Jane\nbe an anti-trust investigation of the auto manufacturers.\nThis is more fully reported on in today's New York Times.\nIt is not unlikely that we are going to get some questions\non this as to the President's view and position. Parti-\ncularly, Ron Nessen can expect these inquiries.\nI think it would be helpful if we could develop some guidance\nfor Ron as to how to respond. It may be that he will want to\nrefer the questions to Justice.\nMany thanks.\n&\nFORD\nRALD\nANTITRUST STUDY\nANTITRUST STUDY\nON CARS PLANNED\nON CARS PLANNED\nN.Y Times\n8/4/76\nContinued From Page 1, Col. 7\nMove by F.T.C. and Justice\nthe manufacture and distribu-\nDepartment is Deplored by\ntion of automobiles.\"\nGeneral Motors and Ford\n\"Among the matters to be\ninvestigated are pricing poli-\ncies, scale economics, vertical\nBy The Associated Prese\nintegration, and automobile\nWASHINGTON, Aug. 3-An\ndistribution practices,\" the\nantitrust investigation of the\nterse statement added.\nnation's automobile makers\nThe announcement said that\nwas approved today by the\n\"the existence of an investiga-\nFederal Trade Commission and\ntion does not imply that viola-\nthe Justice Department.\ntions of law have occurred.\"\nThe General Motors Corpo-\nStaff proposals for antitrust\nration, which controls more\nactivity against the auto indus-\nthan half the United States\ntry have been in existence for\nyears in both. the commission\nmarket. was considered to ise\nand the Justice Department.\nthe prime target, though the\nThe Justice Department was\nother companies might also be\non the verge of filing a suit\ndrawn into a legal attack\nagainst General Motors in 1968,\nThomas A. Murphy, G.M.'s\nbut dropped the matter for lack\nchairman, said that he expect-\nof support from the incoming\nAdministration of President\ned to be able to show that the\nRichard M. Nixon.\nconspiracy to control the mar-\nindustry. was competitive and\nA Justice Department spokes-\nketplace. Instead, the argu-\nin compliance with the law.\nman confirmed today that the\nment is that the industry lead-\nBut he added that he deplored\nF.T.C.'s action had been cleared\ners effectively block or stifle\n\"the waste of public and pri-\nwith the department. He said\ncompetition from smaller con-\nthe Justice Department's own\nvate resources that this: task\ncerns through tacit similarities\nlawyers have been keeping an\nwill entail.\"\nin marketing and prices.\neye on the industry but \"we\n'Yet Another Investigation*\nweren't close to any kind of\nLee A, Iacocca, president of\nimminent filing.\"\nHowever, it was agreed, he\nthe Ford Motor Corporation,\nadded, that if the F.T.C. devel-\nthe No. 2 car maker, said that\noped any kind of criminal case\n\"the decision of the Federal\nagainst the auto makers, the\nTrade Commission to com-\ndepartment would move in The\nmence yet another investiga-\nF.T.C. is empowered only to\ntion of the automobile industry\nbring civil actions.\nis unfortunate and unneces\nThe investigation can be ex-\npected to take considerable\nsary.\"\ntime, and any resulting litiga-\nThe Chrysier Corporation\ntion could last several years.\nranks behind Ford and the\nOwen Johnson, director of\nAmerican Motors Corporation\nthe F.T.C.'s Bureau of Compe-\nis next in the industry\ntition, said that if an antitrust\nThe F.T.C.'s announcement\nsuit. should develop, General\nMotors, which had sales of $32\nsaid that the inquiry would\nbillion in 1974, would not\nfocus on \"the economic struc-\nnecessarily be the only de-\nture of the American automo-\nfendant.\nbile industry on the economic\nHe noted, for example, that\nperformance of firms, both do-\nthe F.T.C. earlier this year\nmestic and foreign, engaged in\nbrought a \"shared monopoly'\n&\nFORD\ncasa against all the major\nContinued on Page 52, Column 5\ncereal makers. The shared mon-\n110\nopoly argument acknowledges\nthat there may be no overt\nTAB\nB\n&\nFORD\nLIBRARY\nU.S. DEPARTMENT OF JUSTICE\nAugust 10, 1976\nTo:\nKenneth A. Lazarus\nAssociate Counsel to the President\nFrom:\nJoe Sims\nDeputy Assistant Attorney General\nAntitrust Division\nSubject: Automobile Investigation\nThis memorandum is in response to your request last\nnight for a short statement of the facts surrounding our\nclearance to the Federal Trade Commission to initiate\ntheir broad-scale investigation of the automobile industry.\nThe Department of Justice and the Federal Trade\nCommission have, for many years, had an informal clearance\nprocess which basically involves each agency, prior to\nbeginning an investigation, informing the other agency and\nasking whether such an investigation would conflict with\nanything underway or contemplated by the other agency.\nThis \"clearance\" process is not binding on either agency,\nbut is simply an attempt to avoid duplication of effort.\nPursuant to this clearance process, the Federal Trade\nCommission in late July informed the Department that they\nwere prepared to undertake a substantial investigation of\nthe automobile industry, and were ready to commit significant\nresources to such an investigation. They asked whether\nsuch an investigation would conflict with anything underway\nor contemplated by the Department. In fact, although the\nDepartment has traditionally been the active agency in the\nautomobile industry, we had no investigation underway and\nhad in fact just completed an economic analysis of the\nindustry which was not particularly sanguine about the\ndesirability of antitrust investigations in that industry.\nBased on these facts, we ordinarily would routinely grant\nthe requested clearance to the Commission.\nBecause this industry had traditionally been in our\nbailiwick, however, and because of the obvious importance\nof this industry, we carefully considered the question of\nFORD\nREVOLUTION\nAMERICAN\n1778-1978\nclearance. In fact, we also met at their request with\ncounsel for General Motors to hear their views on the\nquestion of clearance, which they opposed. After con-\nsidering the matter for about two weeks, we determined\nthat there was no rational basis for refusing clearance\nto the Federal Trade Commission and, on August 2 we\ninformed Chairman Collier by letter that we were prepared\nto clear the Commission's investigation subject to two\nconditions: first, that this clearance would not foreclose\nthe Department from future investigations in the industry,\nincluding specifically criminal investigations; and\nsecond, that at the conclusion of the Commission's investi-\ngation, the Department would be given access to information\ndeveloped by the Commission.\nOn August 3, Chairman Collier responded to our letter\nby accepting the conditions contained therein.\nAttached are copies of the exchange of correspondence\nbetween the Antitrust Division and the Commission, which\nhave been made available to the press with the Commission's\nconcurrence.\nI would suggest that any questions that the White\nHouse receives on this matter be referred to the Department\nof Justice for response.\nAttachment\nFORD & LIBRARY\nFEDERAL TRADE COMMISSION\nWASHINGTON, D. C. 20580\nOFFICE OF THE CHAIRMAN\nAUG 3 1976\nThe Honorable Donald I. Baker\nActing Assistant Attorney General\nAntitrust Division\nDepartment of Justice\nWashington, D. C. 20530\nDear Mr. Baker:\nThis is in reference to your letter of August 2, 1976,\nin which you agreed to clear to the Commission a broad\ninvestigation of the automobile industry, subject to the\nconditions specified in your letter. The specified\nconditions are acceptable to the Federal Trade Commission.\nAccordingly, the Commission will initiate the necessary\npapers for the formalization of this clearance agreement.\nSincerely\nCalvin J. Collier\nChairman\nFORD i LIBRARY 07V\n02 AUG 1975\nHonorable Calvin J. Collier\nChairman\nFederal Trade Commission\nWashington, D.C. 20580\nDear Mr. Chairman:\nPursuant to the liaison procedure between the\nFederal Trade Commission and the Department of Justice,\nthe Commission has requested clearance to conduct a\nbroad investigation of the automobile industry. We\nunderstand that the Commission has completed a detailed\neconomic study and now desires to conduct a comprehensive\ninvestigation to determine whether or not violations of\nSection 5 of the Federal Trade Commission Act are present.\nSubject to the following conditions, the Department\nis prepared to process the clearance request without\nobjection. First, this clearance would not foreclose\nthe Department of Justice from future specific investi-\ngations in this industry, including particularly investi-\ngations of a criminal nature. Any such future investi-\ngations would be subject to normal clearance procedures,\nIn that connection, the Commission, consistent with our\nestablished practice, would undertake to advise the\nDepartment if any evidence of a potential criminal\nnature is uncovered.\nSecond, at the conclusion of the investigation,\nthe Department would be given access to information\nobtained by the Commission. Obviously, this would be of\nparticular importance if the Commission should decide\nthat no action under Section 5 were appropriate.\nIf these conditions are acceptable, please let\nus know and we will proceed to process the clearance\nrequest.\n&\nFORD\nLIBRARY\nAs a final point, I should note that the Department\nhas a substantial number of documents obtained by grand\njury subpoena during the course of a prior investigation.\nThat investigation was closed long ago, and the return\nof those documents has recently been requested. Since\nwe have no basis to retain them, we will begin returning\nthem on August 15.\nSincerely yours,\nDONALD I. BAKER\nActing Assistant Attorney General\nAntitrust Division\nFORD & LIBRARY\nFEDERAL TRADE COMMISSION\nWASHINGTON, D. C. 20580\nOFFICE OF THE CHAIRMAN\nAUG 3 1976\nThe Honorable Donald I. Baker\nActing Assistant Attorney General\nAntitrust Division\nDepartment of Justice\nWashington, D. C. 20530\nDear Mr. Baker:\nThis is in reference to your letter of August 2, 1976,\nin which you agreed to clear to the Commission a broad\ninvestigation of the automobile industry, subject to the\nconditions specified in your letter. The specified\nconditions are acceptable to the Federal Trade Commission.\nAccordingly, the Commission will initiate the necessary\npapers for the formalization of this clearance agreement.\nSincerely\nCalvin J. Collier\nChairman\nFORD i LIBRARY\n02 AUG 1975\nHonorable Calvin J. Collier\nChairman\nFederal Trade Commission\nWashington, D.C. 20580\nDear Mr. Chairman:\nPursuant to the liaison procedure between the\nFederal Trade Commission and the Department of Justice,\nthe Commission has requested clearance to conduct a\nbroad investigation of the automobile industry. We\nunderstand that the Commission has completed a detailed\neconomic study and now desires to conduct a comprehensive\ninvestigation to determine whether or not violations of\nSection 5 of the Federal Trade Commission Act are present.\nSubject to the following conditions, the Department\nis prepared to process the clearance request without\nobjection. First, this clearance would not foreclose\nthe Department of Justice from future specific investi-\ngations in this industry, including particularly investi-\ngations of a criminal nature. Any such future investi-\ngations would be subject to normal clearance procedures,\nIn that connection, the Commission, consistent with our\nestablished practice, would undertake to advise the\nDepartment if any evidence of a potential criminal\nnature is uncovered.\nSecond, at the conclusion of the investigation,\nthe Department would be given access to information\nobtained by the Commission. Obviously, this would be of\nparticular importance if the Commission should decide\nthat no action under Section 5 were appropriate.\nIf these conditions are acceptable, please let\nus know and we will proceed to process the clearance\nrequest.\nERALD R. FORD\nAs a final point, I should note that the Department\nhas a substantial number of documents obtained by grand\njury subpoena during the course of a prior investigation.\nThat investigation was closed long ago, and the return\nof those documents has recently been requested. Since\nwe have no basis to retain them, we will begin returning\nthem on August 15.\nSincerely yours,\nDONALD I. BAKER\nActing Assistant Attorney General\nAntitrust Division\n&\nFORD\nALD\nLIBRAR\nTHE WHITE HOUSE\nWASHINGTON\nAugust 24, 1976\nMEMORANDUM FOR:\nJACK MARSH\nFROM:\nMAX FRIEDERSDORF\nw.6.\nSUBJECT:\nH. Res. 1462, Anti-Trust Resolution\nThe House will consider today H. Res. 1462, a parliamentary\ndevice reported by the Rules Committee which would permit three\npreviously passed House bills to be taken to Conference with the\nSenate as a package.\nThe bills include H.R. 8532 (Parens Patriae passed previously by\nvoice vote); H.R. 13489, Anti-Trust Civil Process Amendments and\nH.R. 14580, Pre-Merger Notification, both previously passed on\nsuspension.\nChairman Rodino, supported by Representative Bob McClory, appeared\nbefore Rules prior to recess to seek the Resolution in order to\nfacilitate a Conference.\nI recommend we oppose the Resolution. It marries good legislation,\npre-merger and civil process, to objectionable legislation, namely,\nparens patriae which has passed both the House and Senate in\nobjectionable form.\nTo oppose the Resolution today would signal objections only to the\nunusual parliamentary procedure of merging three previously\npassed bills.\nDefeat of H.Res. 1462 would insure the President of considering\nthe three bills on their separate merits and not having to buy\nall or nothing.\nEd Schmults concurs that we oppose H. .Res. 1462. Bill Seidman\ndisagrees, maintaining that this puts the Administration on\nthe politically objectionable side of big business.\nCC: Bill Seidman\nEd Schmults\nFORD\n10\n-2-\nADDENDUM\nMinority Leader John Rhodes is putting out a whip advisory\nthat he is personally opposed to the bill as a bad piece\nof legislation.\nMichel defers to the Republican Members of the House Judiciary\nCommittee; John Anderson believes the House will adopt the\nResolution and that the White House should not get out front\non a Custer's Last Stand.\nHutchinson favors the Resolution; opposes Parens Patriae.\nWiggins is noncommital and Caldwell Butler's dislike of\nParens Patriae is constrained because the Virginia attorney\ngeneral is running for Governor.\nFORD & LIBRA\nAugust 31, 1976\nCONGRESSIONAL RECORD-DAILY DIGEST\nD 1175\nvide for participation by the Veterans' Administration\ntive relief against threatened loss or damage by a viola-\nin the national Swine Flu immunization program.\ntion of the antitrust laws.\nPage S15023\nPages S15045-S15046\n(8) By 57 yeas to 25 nays, tabled Hruska amend-\nPostal Service Organization and Financing: Senate\nment No. 2253, to provide that if a State fails to estab-\nagreed to the conference report on H.R. 8603, to amend\nlish that the defendant acted in willful violation of the\nthe laws with respect to organizational and financial\nántitrust laws, the mandatory relief shall be reduced\nmatters of the United States Postal Service and the\nfrom treble to single damages;\nPage $15025\nPostal Rate Commission, thus clearing the measure for\n(9) By 52 yeas to 26 nays, tabled Bellmon motion\naction by the House.\nPages 514996-S14997\nNo. 3, calling for Senate to agree to the House amend-\nGovernment in Sunshine: Senate agreed to the con-\nment to the Senate amendment with an amendment\nference report on S. 5, to provide that meetings of gov-\nto provide that no portion of any monetary relief shall\nernment agencies be open to the public, thus clearing\nbe paid to any private counsel employed by the State,\nthe measure for the White House.\nPages $15043-515045\nor any person other than the natural persons residing\nAntitrust Amendments: Senate continued to debate\nin such State in whose behalf such action was brought;\nHouse message on H.R. 8532, to improve and facilitate\nPage 515028\nthe expeditious and effective enforcement of the anti-\n(10) By 43 yeas to 2I nays, tabled Allen amendment\ntrust laws, taking action on proposed amendments and\nNo. 2239, to provide that no person may participate in\nmotions made in connection therewith, as follows:\nbringing an action under Title III while seeking the\n(I) By 63 yeas to 27 nays, three-fifths of those Sena-\nnomination for election to any State or Federal public\ntors duly chosen and sworn having voted in the affirma-\noffice;\nPage 515037\ntive, agreed to motion to close further debate on Robert\nSenate reached unanimous consent agreement con-\nC. Byrd motion that Senate agree to the House amend-\ncerning the further consideration of this bill as follows:\nment to the Senate amendment with an amendment\nTo resume consideration thereof at 2 p.m. on Tues-\nin the nature of a substitute to this bill;\nPage $15003\nday, September 7-2 hour time limitation for debate-\n(2) By 27 yeas to 62 nays, rejected Alten amendment\nwhen it will be in order for Senator Allen to reoffer his\nNo. 2232, in the nature of a substitute for substitute\namendment No. 2232, in the nature of a substitute;\namendment embodied in Robert C. Byrd motion;\nTo resume its consideration at 2 p.m. on Wednesday,\nPage S15004\nSeptember 8, with vote at 3 p.m. on question of adoption\n(3) By 82 yeas to 3 nays, agreed to motion to in-\nof Allen amendment No. 2232, and, if rejected, to be\nstruct the Sergeant at Arms to request the presence of\nfollowed by vote on Robert C. Byrd motion; and that\nabsent Senators;\nAbourezk unprinted amendment No. 410, in the nature\nPage $15014\nof a substitute, be withdrawn from consideration.\n(4) By 83 yeas to 4 nays, agreed to motion to instruct\nPage $15047\nthe Sergeant at Arms to compel the presence of absent\nPages $15000-$15043, 515047\nSenators.\nPage $15017\nToxic Substances Control: Senate disagreed to the\n(5) Tabled Allen unprinted amendment No. 411,\nHouse amendments to S. 3149, to protect human health\n(in the nature of a substitute for the substitute amend-\nand the environment by requiring testing and necessary\nment embodied in Robert C. Byrd motion) as follows:\nuse restrictions on certain chemical substanees, agreed\n(a) Division I-Title Amendment-tabled by voice\nto conference with the House and appointed as con-\nvote; (b) Division 2-Declaration of Policy-tabled by\nferees Senators Magnuson, Hartke, Hart of Michigan,\n63 yeas to 2I nays; (c) Division 3-Antitrust Civil Pro-\nDurkin, Tunney, Baker, and Stevens.\nPage S14986\ncedure Act Amendments-tabled by 6I yeas to 19 nays;\nIndian Claims Commission: Senate disagreed to the\n(d) Division 4-Parens Patriae amendments-tabled\nHouse amendment to S. 2981, authorizing funds for\nby 62 yeas to 24 nays; (e) Division 5-Premerger. No-\nthe Indian Claims Commission for fiscal year 1977,\ntification and Stay-tabled by 63 yeas to 23 nays; and\nrequested conference with the House and appointed as\n(f) Division 6-Making the bill effective no sooner than\nconferees Senators Jackson, Metcalf, Johnston, Abou-\nJanuary I, 1977-tabled by 61 yeas to 23 nays.\nrezk, Fannin, and Bartlett.\nPages $15117-515118\nPages $15009, $15017-515019\nWater Pollution Control: Senate laid down for fur-\n(6) By 55 yeas to 23 nays, tabled Thurmond amend-\nther consideration tomorrow S. 3037, authorizing funds\nment No. 2255, placing compensation on plaintiffs at-\nfor fiscal year 1977 for programs under the Water\ntorney's fees on same basis as that paid by State to pri-\nPollution Control Act.\nPage $15117\nvate counsel retained;\nPage S15022\nPresidential Communication: Senate received a com-\n(7) By 58 yeas to 24 nays, tabled Tower unprinted\nmunication from the President transmitting a report\namendment No. 412, to strike provision which provides\nsetting forth his determination that import relief for the\nfor court costs and attorney's fees in actions for injunc-\nU.S. industry engaged in the commercial production\nRhudes - 150-180\nor stury veto sig.\nD 1176\nCONGRESSIONAL RECORD-DAILY DIGEST\nAugust 31, 1976\nand extraction of honey is not in the national economic\nticipation by foreign banks in domestic financial mar-\ninterest, and explaining the reasons for his decision-\nkets, receiving testimony from George H. Dixon,\nreferred to Committee on Finance.\nPage $15049\nDeputy Secretary of the Treasury; Stephen S. Gardner,\nPresidential Messages: Senate received the following\nVice Chairman, Board of Governors of the Federal\nmessages from the President:\nReserve System; John B. Olin, Conference of State Bank\nTransmitting annual report of the National Council\nSupervisors, Washington, D.C.; William Volckhausen,\non the Arts and the National Endowment for the Arts\nFirst Deputy Superintendent of Banks of New York,\nfor fiscal year. 1975-referred to Committee on Labor\nAlbany; Carol Greenwald, Commissioner of Banks of\nand Public Welfare; and\nMassachusetts, Boston; Robert Ackerman, Pacific\nTransmitting legislation to establish a IO year national\nCoast Stock Exchange, San Francisco; Michael Tobin,\ncommitment to double America's heritage of national\nMidwest Stock Exchange, Chicago; James Dowd, Bos-\nparks and national wildlife refuges-referred jointly to\nton Stock Exchange, Boston; Theodor Schmidt-\nCommittees on Interior and Insular Affairs and\nScheuber, ABD Securities Corporation, New York\nCommerce.\nCity; Hart Perray, So Gen-Swiss International Corpora-\nPages S15047-S15048\ntion, New York City; Dr. Wolfgang Jahn, Duesseldorf,\nLegislative Program: Majority Leader discussed Sen-\nrepresenting European Economic Community Banking\nate's legislative program for tomorrow and following\nFederation, accompanied by his associates; Paul E.\nforthcoming Labor Day Recess.\nPage S15119\nHollos, and Steuart L. Pittman, both of Institute of For-\nCommittee Authority To Sit: Certain committees\neign Bankers, Washington, D.C.; and Douglas A.\nwere authorized to sit during sessions of the Senate on\nSmith, Bankers Association for Foreign Trade, Wash-\nWednesday, September I, and on Wednesday, Septem-\nington, D.C.\nber 8.\nPage S15022\nSubcommittee adjourned subject to call.\nTreaty Received: International Convention for the\nSECOND CONGRESSIONAL BUDGET RESOLUTION\nSafety of Life at Sea (Ex. O, 94th Cong., 2d sess.) was\nreceived, the injunction of secrecy removed therefrom\nCommittee on the Budget: Committee ordered favor-\nand the treaty, together with accompanying papers,\nably reported an original concurrent resolution revis-\nwas referred to Committee on Foreign Relations.\ning the congressional budget for the Federal Gov-\nPage S15045\nernment for fiscal year 1977. As approved by the\nNominations: Senate received the nomination of\ncommittee the resolution recommends $412.8 billion\nEverett T. Keech, of the District of Columbia, to be an\nfor outlays; $447.5 billion for new budget authority; and\nAssistant Secretary of the Air Force.\n$362 billion for total revenues for fiscal year 1977.\nAlso, Senate received the withdrawal of the nomina-\ntions of Margareta E. White, of Virginia, and Joseph\nREVENUE SHARING AND WITHHOLDING RATES\nR. Fogarty, of Rhode Island, each to be a member of\nCommittee on Finance: Committee announced that in\nthe Federal Communications Commission, and the\nnominations were then resubmitted for different terms\nan evening session on Monday, August 30, it ordered\nof office.\nfavorably reported the following bills:\nPage $15120\nH.R. II997, to amend the Internal Revenue Code of\nQuorum Calls: Three quorum calls were taken today.\n1954 with respect to the tax treatment of certain divesti-\nPages $15004, $15014, $15017\ntures of assets by bank holding companies; and\nRecord Votes: Fourteen record votes were taken today\nH.R. 13367, to amend and extend the State and Local\n(total-559).\nFiscal Assistance Act-\"revenne sharing\" (amended).\nPages $15004-$15005, $15014, S15017, S15018-S15020,\nS15022, S15023, $15025, S15028, $15038\nAs approved by the committee, the bill would (a) ex-\nRecess: Senate met at II a.m. and recessed at 10:58\ntend the program for an additional 53/4 years through\np.m. until IO a.m. on Wednesday, September I. (For\nSeptember 30, 1982; (b) set funding for fiscal year 1977\nprogram for Wednesday, see last page of today's\nat $6.9 billion; and (c) increase annual increment by\nRecord.).\n$150 million starting with fiscal year 1978.\nPage $15119\nAlso, committee agreed to an amendment to extend\nCommittee Meetings\nthe present withholding tax rates until September 15,\n(Committees not listed did not meet)\n1976, intended to be offered as a committee amend-\nment to H.R. 3052, to amend the Internal Revenue Code\nINTERNATIONAL BANKING\nof 1954 with respect to the tax treatment of the gain on\nCommittee on Banking, Housing and Urban Affairs:\nthe lapse of options to buy or sell securities, when such\nSubcommittee on Financial Institutions held hearings\nmeasure (now on Senate Calendar) is considered by the\non H.R. 13876, to provide for Federal regulation of par-\nSenate.\nAugust 31, 1976\nCONGRESSIONAL RECORD- DAILY DIGEST\n1177\nCOMMITTEE BUSINESS\nceiving testimony from Clifford I. Barrett, Assistant\nCommittee on Foreign Relations: Committee ordered\nCommissioner, Bureau of Reclamation, Department of\nfavorably reported the following business items:\nthe Interior.\nCustoms Convention on Containers, 1972, and the\nCOAL MINE SAFETY\nInternational Convention for Safe Containers (Ex. X,\n93d Cong., Ist sess.);\nCommittee on Labor and Public Welfare: Committee\nAgreement on the Conservation of Polar Bears (Ex.\nordered favorably reported, with amendments, S. 1302,\nI, 94th Cong., Ist sess.);\nto promote safety in the mining industry; and ordered\nConvention for the Conservation of Antarctic Seals,\nreported without recommendation H.R. 13555, House\nwith Annex (Ex. K, 94th Cong., 1st sess.);\ncompanion measure.\nProtocol amending the Interim Convention on Con-\nBLACK LUNG\nservation of North Pacific Fur Seals (Ex. M, 94th Cong.,\n2d sess.); and\nCommittee on Labor and Public Welfare: Subcommit-\nFifth International Tin Agreement (Ex. J, 94th Cong.,\ntee on Labor approved for full committee consideration\n2d sess.); and\nwith amendments, H.R. 10760, to improve program of\nThe nominations of Robert J. McCloskey, of Mary-\nbenefits for victims of black lung disease.\nland, to be Ambassador to the Kingdom of the Nether-\nKENNEDY CENTER FUNDS\nlands; and William G. Bradford, of Illinois, to be Am-\nbassador to the Republic of Chad.\nCommittee on Public Works: Subcommittee on Build-\nings and Grounds held hearings on H.R. 14360, author-\nPrior to these actions, committee received testimony\nizing $3.3 million for repair and reconstruction of the\nas follows:\nJohn F. Kennedy Center for the Performing Arts, re-\nOn the nomination of Ambassador McCloskey from\nceiving testimony from Roger Stevens, Chairman, Board\nJ. Ashton-Greene, Pass Christian, Mississippi;\nof Trustees, John F. Kennedy Center for the Perform-\nOn Ex. I, 94-1, Ex. K, 94-1, and Ex. M, 94-2 from\ning Arts, and Jimmie L Dunning, Deputy Director,\nLindsay Grant, Acting Deputy Assistant Secretary for\nNational Park Service, Department of the Interior.\nEnvironmental and Population Affairs, Bureau of\nHearings were adjourned subject to call.\nOceans and International Environmental and Scientifie\nWATER RESOURCE DEVELOPMENT\nAffairs, Department of State; and Richard Frank, Cen-\nter for Law and Social Policy, Washington, D.C.; and\nCommittee on Public Works: Subcommittee on Water\nOn Ex. X, 93-I from Richard Abbey, Assistant Chief\nResources continued to consider proposed water resource\nCounsel, and David Bamowetz, International Opera-\ndevelopment legislation, but did not complete action\ntions Division, both of the U.S. Customs Service, Depart-\nthereon and will meet again tomorrow.\nment of the Treasury; and Rear Admiral William M.\nSENATE COMMITTEE REORGANIZATION\nBenkert, Chief, Office of Merchant Marine Safety, U.S.\nCoast Guard, Department of Transportation.\nSelect Committee on Committees: Committee met to\nconsider proposals for \"starting points\" in dealing with\nWATER PROJECTS-TEXAS,\nthe Senate committee jurisdictional problem, and an-\nNEW MEXICO/CALIFORNIA\nnounced that further hearings on this subject will be\nCommittee on Interior and Insular Affairs: Subcom-\nheld September I4 through 16.\nmittee on Energy Research and Water Resources con-\ncluded hearings on S. 3712, authorizing the construc-\nMEDICAID PRACTICES\ntion, operation, and maintenance of an extension to the\nSpecial Committee on Aging: Subcommittee on Long-\nexisting American Canal, Rio Grande Project, Texas-\nTerm Care continued hearings to report the results of\nNew Mexico, after receiving testimony from Representa-\nits investigation into alleged fraud and abuse among\ntive White; Edwin F. Sullivan, Assistant Commissioner,\nparticipants in the medicaid program, receiving testi-\nBureau of Reclamation, Department of the Interior;\nmony from Robert B. Fiske, Jr., U.S. Attorney, and\nE. H. Bacza, Mayor of El Paso; Jessie Gilmer, Rio\nGeorge Wilson, Associate U.S. Attorney, both of the\nGrande Compact Commission, State of Texas, Austin;\nSouthern District of New York; Joseph Ingber and\nand George Mosley, El Paso County Water Improve-\nSheldon Styles, Chiropractors, New York City; Irving\nment District, Texas; and\nSeidman representing Dr. Clyde Weissbart, and Dr.\nOn S. 3727, authorizing the construction, operation,\nNancy Kurke, East Harlem Medical Center, New York\nand maintenance of the Allen Camp Unit, Pit River\nCity.\nDivision, Central Valley Project, California, after re-\nHearings were recessed subject to call.\nD 1178\nCONGRESSIONAL RECORD-DAILY DIGEST\nAugust 31, 1976\nHouse of Representatives\nChamber Action\nAgreed to an amendment that inserts language con-\ntained in H.R. 12835, H.R. 12851, and H.R. 14070 as\nBills Introduced: 36 public bills, H.R. 15337-15372;\npreviously passed by the House.\n4 private bills, H.R. 15373-15376; and 13 resolutions, H.J.\nRes. 1081, H. Con. Res. 726 and 727, and H. Res. 1503-\nSubsequently, the House insisted upon its amendment\nand asked a conference with the Senate. Appointed as\n1512 were introduced.\nPages H9319-H9321\nconferees: Representatives Perkins, Thompson, Brade-\nBills Reported: Reports were filed as follows:\nmas, O'Hara, Hawkins, Ford of Michigan, Mink,\nConference Report on H.R. 8603, Postal Reorganiza-\nMeeds, Chisholm, Biaggi, Andrews of North Carolina,\ntion Act Amendments of 1976 (H. Rept. 94-1444);\nLehman, Benitez, Blouin, Cornell, Simon, Beard of\nH.R. 13950, to provide for the cooperation between\nRhode Island, Zeferetti, Miller of California, Mottl,\nthe Secretary of the Interior and the States with respect\nHall, Quie, Ashbrook, Bell, Erlenborn, Esch, Eshleman,\nto the regulations of surface coal mining operations,\nBuchanan, Jeffords, Goodling, and Smith.\nand the acquisition and reclamation of abandoned\nPages H9249-H9251\nmines, amended (H. Rept. 94-1445);\nCommittee Elections: House agreed to H. Res. 1503,\nH.R. 15136, to authorize appropriations for construc-\nelecting Representative Steed chairman of the Commit-\ntion of facilities on Guam, amended (H. Rept.\ntee on Small Business; and\n94-1446);\nConference report on S. 2184, to authorize appropri-\nH. Res. 1504, electing Representative Ichord as a\nmember of the Committee on Small Business.\nations for the winter Olympic games (H. Rept.\nPage H9251\n94-1447);\nH. Res. 1507, providing for the consideration of H.R.\nFire Prevention Authorization: By a voice vote the\n14238, making appropriations for the Legislative\nHouse passed S. 2862, Fire Prevention and Control Act\nBranch for fiscal year 1977 (H. Rept. 94-1448);\nauthorization for fiscal year 1977 and 1978; clearing the\nH. Res. 1472, providing funds for the Select Com-\nmeasure for the President.\nPages H9251-H9252\nmittee on Narcotics Abuse and Control (H. Rept.\nPrivate Bill: By a voice vote the House passed S. 3779,\n94-1449);\na private bill; clearing the measure for the President.\nH. Res. 1497, authorizing appropriations for special\nPage H9252\ncounsel to represent the Sergeant at Arms in the case\nToxic Substances: Speaker appointed Representative\nof Pressler V. Simon, et al. (H. Rept. 94-1450);\nBrodhead, Scheuer, and Rinaldo as additional con-\nH. Res. 1510, providing for the consideration of H.R.\nferees to the committee of the conference on S. 3149,\n3605, relating to the Federal excise tax on beer (H. Rept.\nToxic Substances Control Act; and Representative\n94-1451);\nDevine, vice Representative McCollister, resigned.\nH. Res. 1511, providing for the consideration of H.R.\nPage H9252\n6684, Exclusive Territorial Franchise Act (H. Rept.\n94-1452);\nNational Emergencies: House agreed to the Senate\nH. Res. 1512, providing for the consideration of H.R.\namendments to H.R. 3884, National Emergencies Act;\n14886, Presidential Transition Act of 1976 (H. Rept.\nclearing the measure for the President.\nPage H9253\n94-1453);\nPresidential Message-Arts: Received and read a\nH.R. 14829, to provide for consumers a further means\nmessage from the President transmitting the Annual\nof minimizing the impact of inflation and economic\nReport on the National Council on the Arts and the\ndepression by narrowing the price spread between costs\nNational Endowment for the Arts for fiscal year 1975-\nto the producer and the consumer of needed goods, serv-\nreferred to the Committee on Education and Labor.\nices, facilities, and commodities through the develop-\nPage H9258\nment and funding of specialized credit sources for, and\nGovernment in Sunshine: By a yea-and-nay vote of 384\ntechnical assistance, to self-help, not-for-profit coopera-\nyeas the House agreed to the conference report on S.5,\ntives (H. Rept. 94-1454) and\nGovernment in the Sunshine Act; clearing the measure\nH.R. 12808, to improve peanut programs (H. Rept.\nfor Senate action.\nPages H9258-H9262\n94-1455).\nPage H9319\nElectric Vehicles: By a voice vote the House agreed\nEducation Amendments: By a voice vote the House\nto the conference report on H.R. 8800, Electric and\npassed S. 2657, to extend the Higher Education Act of\nHybrid Vehicle Research, Development, and Demon-\n1965, to extend and revise the Vocational Education\nstration Act of 1976; clearing the measure for the\nAct of 1963, amended.\nPresident.\nPages H9262-H9267\nAugust 31, 1976\nCONGRESSIONAL RECORD-DAILY DIGEST\nD1179\nAutomotive Research: By a yea-and-nay vote of 344\nAn amendment which sought to retain the present\nyeas to 39 nays the House agreed to the conference\nlaw definition of \"local elected officials\" in the Regional\nreport on H.R. 13655, Automotive Transport Research\nPlanning Unit representation requirement; and\nand Development Act of 1976; clearing the measure\nAn amendment in the nature of a substitute which\nfor Senate action.\nPages H9267-H9273\nsought to require mutual resolution of differences be-\nPueblo Indians: By a yea-and-nay vote of 387 yeas\ntween the State chief executive officer and the State legis-\nthe House agreed to the conference report on S. 217,\nlature over statewide plans prior to submission to the\nto repeal the Act of May 10, 1926, relating to the con-\nAdministration.\ndemnation of certain lands of the Pueblo Indians in\nH. Res. 1246, the rule under which the bill was con-\nthe State of New Mexico; clearing the measure for\nsidered, was agreed to earlier by a yea-and-nay vote of\nSenate action.\n388 yeas.\nPages H9273-H9274\nPages H9274-H9309\nCommittee to Sit: Objection was heard to a request\nLegislative Program: Majority leader announced the\nthat the Committee on House Administration be per-\nlegislative program for tomorrow.\nPage H9312\nmitted to sit during proceedings of the House today\nAmendments Ordered Printed: Amendments ordered\nunder the 5-minute rule.\nPages H9275-H9276\nprinted pursuant to the rule appear on pages H9321-\nLate Report: Committee on Rules received permission\nH9338.\nto file certain privileged reports by midnight tonight.\nQuorum Calls-Votes: One quorum call, five yea-\nand-nay votes, and three recorded votes-developed dur-\nPage H9276\ning the proceedings of the House today and appear OR\nLaw Enforcement: House completed all general debate\npages H9261-H9262, H9272, H9273-H9274, H9275,\nand began reading for amendment H.R. 13636, to.\nH9287, H9298, H9304, H9307.\namend title I (Law Enforcement Assistance) of the\nAdjournment: Adjourned at 7:06 p.m.\nOmnibus Crime Control and Safe Streets Act of 1968-\nbut came to no resolution thereon. Proceedings under\nCommittee Meetings\nthe 5-minute rule will continue tomorrow.\nPending when the Committee of the Whole rose\nNATIONAL FOREST MANAGEMENT ACT\nwas an amendment that sought to strike out language\nCommittee on Agriculture: Met for markup of H.R.\nprohibiting funds for improving state and local cor-\n15069, National Forest Management Act, and will re-\nrectional institutions unless such improvements comply\nsume tomorrow.\nwith Administration and State standards.\nINTERIOR APPROPRIATIONS\nAgreed to:\nA series of committee amendments en bloc;\nCommittee on Appropriations: Subcommittee on Inte-\nA series of amendments of a clarifying nature;\nrior held a hearing on the National Visitors Center.\nAn amendment to the committee amendment requir-\nARMED SERVICES MISCELLANY\ning that the civil rights enforcement procedures comply\nCommittee on Armed Services: Met and ordered re-\nwith the provisions of the revenue sharing bill as passed\nported favorably to the House the following bills:\nby the House;\nH.R. 14773 as amended, to authorize cost-of-living\nA series of technical amendments; and\nadjustments of annuities under the Retired Service-\nAn amendment which retains the language of pres-\nman's Family Protection Plan, to suspend retired-pay\nent law requiring the approval of local governments for\ndeductions under the Survivor Benefit Plan when there\nlaw enforcement program grants (agreed to by a re-\nis no eligible spouse beneficiary, and to reduce the dura-\ncorded vote of 253 ayes to 133 noes). Earlier, the amend-\ntion-of-marriage requirement under the Survivor Bene-\nment was rejected by a division vote of 38 ayes to 57\nfit Plan from two years to, one year; and\nnoes.\nH.R. 15136 as amended, to authorize appropriations\nRejected:\nfor construction of facilities on Guam.\nA committee amendment adding language requiring\nThe Committee also approved reprogramming\nthat no less than one-third of discretionary funds be\naction to provide funding for $15.7 million in abnormal\nused for improving the administration of criminal jus-\nescalation costs associated with the Economic Price\ntice in the courts (rejected by a recorded vote of 173\nAdjustment clauses of the FY 1975 A-ro airframe and\nayes to 214 noes);\ngun contracts; and\nAn amendment extending the authorization for three\nRealignment of modification funds for the F-14\nyears (rejected by a recorded vote of 119 ayes to 268\nprogram totalling $24.5 million.\nnoes);\nAn amendment authorizing mini-block grants to gen-\nSCHOOL LUNCH PROGRAM\neral units of local government (rejected by a division\nCommittee on Education and Labor: Subcommittee on\nvote of 42 ayes to 50 noes);\nElementary, Secondary, and Vocational Education con-\nD 1180\nCONGRESSIONAL RECORD- DAILY DIGEST\nAugust 31, 1976\ntinued oversight hearings on the school lunch program\nWILDERNESS LANDS\nwith testimony from public witnesses.\nCommittee on Interior and Insular Affairs: Subcom-\nHearings continue tomorrow.\nmittee on Public Lands met and approved for full com-\nSERVICE CONTRACT AMENDMENTS\nmittee action draft of an Omnibus Wilderness bill.\nCommittee on Education and Labor: Subcommittee on\nEXPORT ADMINISTRATION ACT\nLabor-Management Relations met and approved for full\nCommittee on International Relations: Continued\ncommittee action H.R. 15246, to amend the Service\nmarkup of H.R. 7665, to extend the Export Adminis-\nContract Act to ensure that all \"service employees\" ex-\ntration Act of 1969, and will resume tomorrow.\ncept bona fide executive, administrative or professional\nemployees will be covered by the Act.\nDETENTE\nTETON DAM COLLAPSE\nCommittee on International Relations: Subcommit-\ntee on International Political and Military Affairs held\nCommittee on Government Operations: Subcommit-\na hearing on Détente: An Overview. Testimony was\ntee on Conservation, Energy, and Natural Resources\nheard from Helmut Sonnenfeldt, Counselor, Depart-\ncontinued hearings on the Teton Dam collapse. Testi-\nment of State; and Arthur A. Hartman, Assistant Sec-\nmony was heard from Bureau of Reclamation Commis-\nretary of State for European Affairs.\nsioner Stam; Brig. Gen. Drake Wilson, Deputy Director\nHearings continue Thursday, September 2.\nof Civil Works, Army Corps of Engineers; and Henry\nEschwege, Director, Resources and Economic Devel-\nU.S. INVESTMENT OVERSEAS\nopment Division, GAO.\nCommittee on International Relations: Subcommit-\nHOUSE ADMINISTRATION MISCELLANY\ntee on International Economic Policy met and ap-\nproved for full committee action S. 2839 amended, Inter-\nCommittee on House Administration: Met and ordered\nnational Investment Survey Act of 1976.\nreported favorably to the House the following\nresolutions:\nRAIL AMENDMENTS\nS. Con. Res. 85, authorizing the printing as a Senate\nCommittee on Interstate and Foreign Commerce: Began\ndocument of a report by a special consultant to the Ad-\nmarkup of H.R. 14932, Rail Amendments of 1976, and\nministrative Conference of the United States on some\nwill continue tomorrow.\nadministrative procedures of the Internal Revenue\nService;\nMUNICIPAL SECURITIES FULL\nH. Res. 1472, to provide for the expenses of investiga-\nDISCLOSURE ACT\ntions and studies to be conducted by the Select Com-\nCommittee on Interstate and Foreign Commerce: Sub-\nmittee on Narcotics Abuse and Control; and\ncommittee on Consumer Protection and Finance held\nH. Res. 1497 amended, authorizing appointment of a\na hearing on H.R. 15205, Municipal Securities Full Dis-\nspecial counsel to represent the Sergeant at Arms in\nclosure Act of 1976. Testimony was heard from SEC\nthe case of Pressler V. Simon, et al.\nCommissioner Philip Loomis; Treasury Assistant Sec-\nBy a vote of II to 7, the Committee tabled H. Con.\nretary Robert A. Gerard; and public witnesses.\nRes. 48 and 49, to provide for the printing of copies\nof the Constitution of the U.S.\nFTC RULING ON CONSUMER CLAIMS\nCONSULTANT CONTRACTS\nCommittee on Interstate and Foreign Commerce: Sub-\ncommittee on Consumer Protection and Finance held a\nCommittee on House Administration: Subcommittee\nhearing on Federal Trade Commission ruling ón pres-\non Contracts met and reviewed consultant contracts.\nervation of consumer claims and defenses, Testimony\nBOUNDARY CHANGES\nwas heard from public witnesses.\nCommittee on Interior and Insular Affairs: Subcom-\nCOMMITTEE BUSINESS\nmittee on Public Lands held hearings on H.R. 3596,\nCommittee on Interstate and Foreign Commerce: Sub-\nboundary changes in the Cibola National Forest in New\ncommittee on Oversight and Inyestigations met and ap-\nMexico; H.R. 14799 and H.R. 14800, boundary changes\nproved a report entitled \"The Arab Boycott and Amer-\nin the World and Mountain Home Tracts in Wyoming;\nican Business.\"\nand private bills. Testimony was heard from Repre-\nsentatives Udall, Roncalio, Lujan and McFall; and\nPETROLEUM MARKETING PRACTICES\nDepartments of Interior and Agriculture.\nCommittee on Interstate and Foreign Commerce: On\nFollowing the hearing, the Subcommittee approved\nMonday evening, August 30, Subcommittee on Energy\nfor full committee action H.R. 3596, H.R. 3818, H.R.\nand Power approved for full committee action H.R.\n14227, and S. 2511, all private bills.\n13000 amended, Petroleum Marketing Practices Act.\nAugust 31, 1976\nCONGRESSIONAL RECORD-DAILY DIGEST\nD 1181\nHABEAS CORPUS\ngations and Review met for joint briefing by Depart-\nCommittee on the Judiciary: Met and ordered reported\nment of Commerce on regulations and program guide-\nfavorably to the House H.R. 15319 amended, to approve\nlines being developed for the administration of the Pub-\nin whole or in part, with amendments, certain rules\nlic Works Employment Act of 1976.\nrelating to cases and proceedings under sections 2254\nBEER TAX\nand 2255 of title 26 of the United States Code.\nThe committee began but did not complete action\nCommittee on Rules: Granted a closed rule providing\non H.R. 13157, Victims of Crime Act of 1976.\none hour of general debate on H.R. 3605, to amend sec-\ntion 5051 of the Internal Revenue Code of 1954 (relat-\nORGANIC ACT OF GUAM AMENDMENT\ning to the Federal excise tax on beer). Testimony was\nCommittee on the Judiciary: Subcommittee on Courts,\nheard from Répresentatives Pickle, Vigorito, Lundine,\nCivil Liberties, and the Administration of Justice met\nNolan, and Clancy.\nand approved for full committee action H.R. 4580, with\nan amendment in the nature of a substitute.\nINTERSTATE HORSERACING ACT\nWARM WATER FISH HATCHERY PROGRAM\nCommittee on Rules: Held a hearing but postponed ac-\nCommittee on Merchant Marine and Fisheries: Sub-\ntion on H.R. 14071, Interstate Horseracing Act of 1976.\ncommittee on Fisheries and Wildlife Conservation and\nTestimony was heard from Representatives Rooney, and\nMurphy of New York.\nthe Environment held an oversight hearing on the Fish\nand Wildlife Service's warm water fish hatchery pro-\nPRESIDENTIAL TRANSITION ACT\ngram. Testimony was heard from Lynn A. Greenwalt,\nCommittee on Rules: Granted an open rule providing\nDirector, Fish and Wildlife Service; Paul Dembling,\none hour of general debate and waiving section 402(a)\nGeneral Counsel, GAO; Jack Crawford, Georgia De-\nof P.L. 93-344, the Congressional Budget Act, on H.R.\npartment of Natural Resources; and Charles Bowers,\n14886, Presidential Transition Act of 1976. Testimony\nDirector, Division of Fisheries, State of Kentucky.\nwas heard from Chairman Brooks and Representative\nWATER RESOURCES DEVELOPMENT ACT\nHorton.\nCommittee on Public Works and Transportation: Sub-\nLEGISLATIVE BRANCH APPROPRIATIONS\ncommittee on Water Resources continued hearings on\nthe Water Resources Development Act of 1976. Testi-\nCommittee on Rules: Granted a modified rule provid-\nmony was heard from U.S. Coast Guard and Members\ning two hours of general debate; waiving all points\nof Congress.\nof order against title I of the bill for failure to comply\nHearings continue tomorrow.\nwith the provisions of clause 2, Rule XXI, and providing\nthat no amendment shall be in order except amend-\nLOCAL SERVICE AIR CARRIER SUBSIDY-\nments recommended by the Committee on Appropri-\nALL-CARGO SERVICE\nations and the amendments printed in the Congressional\nCommittee on Public Works and Transportation: Sub-\nRecord of August 31, 1976 by Representative Shipley,\ncommittee on Aviation held hearings on the following\nand said amendments shall be in order, clause 2 of\nbills:\nRule XXI to the contrary notwithstanding, but shall\nH.R. 12349, to require retroactive adjustment of local\nnot be subject to amendment except amendments rec-\nservice air carrier subsidy for 1966. Testimony was heard\nommended by the Committee on Appropriations and\nfrom Representative Pickle; Fred Chabot, CAB; Paul L.\npro forma amendments, on H.R. 14238, making appro-\nBradshaw, Ozark Airlines; and Francisco A. Lorenco,\npriations for the Legislative Branch for fiscal year 1977.\nTexas International Airlines, Inc.; and\nTestimony was heard from Representatives Schroeder,\nH.R. 14623, to permit CAB to authorize all-cargo\nCoughlin, Armstrong, Regula, Edwards, Archer, Bau-\nservice by exemption pending CAB consideration of an\nman and Grassley.\napplication for initial certification of such service. Tes-\nEXCLUSIVE TERRITORIAL FRANCHISE ACT\ntimony was heard from John Robson, Chairman, CAB;\nJohn W. Barnum, Deputy Secretary of Transportation;\nCommittee on Rules: Granted an open rule providing\nand Frederick W. Smith, Chairman of the Board, Fed-\ntwo hours of general debate; waiving the provisions of\neral Express Corporation.\nclause 2(1) (5) (B) of Rule XI and dividing debate\nHearings continue tomorrow.\ntime between the Committee on Interstate and Foreign\nCommerce and the Committee on Judiciary, on H.R.\nPUBLIC WORKS EMPLOYMENT ACT\n6684, Exclusive Territorial Franchise Act. Testimony\nGUIDELINES\nwas heard from Chairman Rodino and Representatives\nCommittee on Public Works and Transportation: Sub-\nMurphy of New York, McCollister, Flowers, Seiberling\ncommittees on Economic Development, and on Investi-\nand Cohen.\nD 1182\nCONGRESSIONAL RECORD- DAILY DIGEST\nAugust 31, 1976\nNATIONAL CEMETERIES\n1977; (B) increase in tax credits for employee stock\nCommittee on Veterans' Affairs: Subcommittee on\nownership plan contributions; (C) greater moving ex-\nCemeteries and Burial Benefits held a hearing on pro-\npense deductions; and (D) liberalize investment tax\nposals to establish a national cemetery in Alabama and\ncredit for movie and T.V. films.\nPennsylvania; and changing criteria for burial in Arling-\nton National Cemetery. Testimony was heard from\nCOMMITTEE MEETINGS FOR WEDNESDAY,\nRepresentatives Brinkley, Nichols and Edgar; Deputy\nSEPTEMBER 1\nAssistant Secretary of the Army Ford; and public\nwitnesses.\n(All meetings are open unless otherwise designated)\nSenate\nJoint Committee Meetings\nCommittee on Agriculture and Forestry, business meeting,\nNUCLEAR PROLIFERATION CONTROL\n8 a.m., 324 Russell Office Building.\nCommittee on Banking, Housing and Urban Affairs, Subcom-\nJoint Committee on Atomic Energy: Committee held\nmittee on Securities, to resume hearings in connection with its\nhearings on S. 377° and H.R. 15273, to provide for more\nstudy of the securities activities of commercial banks, IO a.m.,\nefficient and effective control over the proliferation of\n5302 Dirksen Office Building.\nnuclear explosives, receiving testimony from Robert\nCommittee on the Judiciary, Subcommittee, to hold hearings\non the nominations of Harry W. Wellford, of Tennessee, to be\nA. Fri, Deputy Administrator Energy Research and\nUnited States circuit judge for the sixth circuit; Kenneth K. Hall,\nDevelopment Administration, and Director, White\nof West Virginia, to be United States circuit judge for the fourth\nHouse Nuclear Policy Review Group; and Marcus\ncircuit; and John T. Copenhaver, Jr., to be United States District\nRowden, Chairman, Nuclear Regulatory Commission;\nJudge for the southern district of West Virginia, 9:30 a.m., 2228\nand Myron B. Kratzer, Deputy Assistant Secretary of\nDirksen Office Building.\nCommittee on Veterans' Affairs, business meeting, to consider\nState for Nuclear Energy and Energy Technology\nS. 969, the proposed Veterans Education and Employment As-\nAffairs.\nsistance Act; and S. 3596 and H.R. 14299, to increase the rates of\nCommittee recessed subject to call.\ndisability compensation for disabled veterans and rates of de-\npendency and indemnity compensation for their survivors, 9:45\nARTS AND HUMANITIES\na.m., 414 Russell Office Building.\nConferees agreed to file a conference report on the dif-\nCommittee on Public Works, Subcommittee on Water Re-\nsources, to continue markup of proposed legislation on water\nferences between the Senate- and House-passed versions\nresource development, 10 a.m., 4200 Dirksen Office Building.\nof H.R. 12838, authorizing funds through fiscal year\nCommittee on Interior and Insular Affairs, Subcommittee on\n1980 for programs of the National Foundation on the\nParks and Recreation, to hold oversight hearings on the Presi-\nArts and Humanities.\ndent's Bicentennial Land Heritage Program, IO a.m., 3110 Dirk-\nsen Office Building.\nDEFENSE APPROPRIATIONS\nHouse\nConferees, in closed session, continued to resolve the\nCommittee on Agriculture, to continue markup of H.R. 15069,\ndifferences between the Senate- and House-passed ver-\nNational Forest Management Act, 10 a.m., 1301 Longworth\nBuilding.\nsions of H.R. 14262, making appropriations for the de-\nCommittee on Armed Services, Subcommittee on Military\nfense establishment for fiscal year 1977, but did not com-\nInstallations and Facilities, to consider pending real estate proj-\nplete action thereon and will meet again tomorrow.\nects, 2 p.m., 2212 Rayburn Building.\nSubcommittee on Seapower and Strategic and Critical Ma-\nEMERGENCY JOBS PROGRAM\nterials, to mark up H.R. 15081, to authorize the disposal of\nConferees continued to resolve the differences between\nvarious materials from the national stockpile and the supple-\nthe Senate- and House-passed versions of H.R. 12987,\nmental stockpile; hold a hearing on the President's request for\nauthorizing funds through fiscal year 1977 for the pub-\na supplemental fiscal year 1977 authorization for shipbuilding\nand conversion, Navy; and reconsider the Subcommittee's prior\nlic service jobs program under the Comprehensive Em-\naction disapproving the transfer of naval vessels to Ecuador,\nployment and Training Act, but did not complete\nIO a.m., 2216 Rayburn Building.\naction thereon and will meet again on Thursday, Sep-\nSubcommittee on Military Personnel, to continue hearings\ntember 9.\non the recently announced plan of the Secretary of the Army\nto cope with the Honor Code problem at West Point, 10 a.m.,\nTAX REFORM\n2118 Rayburn Building.\nConferees continued in an evening session to resolve the\nCommittee on Banking, Currency and Housing, Subcommit-\ndifferences between the Senate- and House-passed ver-\ntee on Economic Stabilization, to hold oversight hearing on the\nsions of H.R. 10612, proposed Tax Reform Act of 1976.\nLockheed Aircraft Corp., 9:30 a.m., 2222 Rayburn Building.\nCommittee on the Budget, to consider Budget Act waiver\nOn Monday, August 30, the conferees tentatively\n(Section 402) on S. 1174, Hazard Reduction Act, IO a.m., 210\nagreed to (A) extend some personal tax credits through\nCannon Building.\nAugust 31, 1976\nCONGRESSIONAL RECORD- DAILY DIGEST\nD 1183\nCommittee on the District of Columbia, to mark up H.R.\nSubcommittee on Criminal Justice, to continue hearings on\n15276, Park Police pay comparability; and consider H. Con.\nH.R. 14476, Special Prosecutor Act of 1976, 9:30 a.m., 2141\nRes. 694, to disapprove the Firearms Control Regulations Act\nRayburn Building.\nof 1975, passed by the Council of the District of Columbia, 9:30\nCommittee on Merchant Marine and Fisheries, Subcommittee\na.m., 1310 Longworth Building.\non Coast Guard and Navigation, to markup H.R. 13585, to\nCommittee on Education and Labor, Subcommittee on Ete-\namend the Federal Boat Safety Act of 1971; and S. 3050, to\nmentary, Secondary, and Vocational Education, to continue\nauthorize the Secretary of Transportation, when the Coast Guard\noversight hearings on the school lunch programs, 9 a.m., 2175\nis not operating as a service in the Navy, to lease for military\nRayburn Building.\npurposes structures and their associated real propérty located in\nCommittee on Government Operations, Subcommittee on\na foreign country, IO a.m., 1334 Longworth Building.\nIntergovernmental Relations and Human Resources, to mark up\nCommittee on Post Office and Civil Service, Subcommittee on\nH.R. 14761, to establish an Office of Inspector General in the\nRetirement and Employee Benefits, to continue oversight hear-\nDepartment of Health, Education, and Welfare, IO a.m., 2247\nings on physical examinations, 9 a.m., 311 Cannon Building.\nRayburn Building.\nCommittee on Public Works and Transportation, Subcom-\nCommittee on Interior and Insular Affairs, to consider pend-\nmittee on Water Resources, to continue hearings on the Water\ning legislation, 9:45 a.m., 1324 Longworth Building.\nResources Development Act of 1976, IO a.m., 2167 Rayburn\nCommittee on International Relations, to continue markup\nBuilding.\nof H.R. 7665, to extend the Export Administration Act of 1969,\nSubcommittee on Aviation, to continue hearings on H.R.\nIO a.m., 2172 Rayburn Building.\n12349, to require retroactive adjustment of local service air\nSubcommittees on International Political and Military Affairs,\ncarrier subsidy for 1966; and H.R. 14623, to permit CAB to\nand on International Organizations, to hold joint hearings on\nauthorize all-cargo service by exemption pending CAB con-\nthe August 18 incident in the Demilitarized Zone in Korea,\nsideration of an application for initial certification of such\n2 p.m., 2172 Rayburn Building.\nservice, 9:45 a.m., 2253 Rayburn Building.\nCommittee on Interstate and Foreign Commerce, to continue\nCommittee on Science and Technology, Subcommittee on the\nmarkup of H.R. 14932, Rail Amendments of 1976, IO a.m.,\nEnvironment and the Atmosphere, to markup H.R. 14544,\n2123 Rayburn Building.\n10039 and S. 3383, weather modification legislation, 9 a.m.,\nSubcommittee on Communications, to hold hearing on H.R.\n2318 Rayburn Building.\n15268, to provide just and reasonable rates, terms, and condi-\nCommittee on Standards of Official Conduct, to consider\ntions for the use of certain rights-of-way by persons desiring to\npending business, 4:15 p.m., H-310, Capitol Building.\nlease space for wire communications; to be followed by markup\nof penalties and forfeiture, and pole attachment legislation,\nJoint Committee Meetings\n1:30 p.m., 2123 Rayburn Building.\nConferees, on S. 3149, to protect human health and the envi-\nCommittee on the Judiciary, Subcommittee on Courts, Civil\nronment by requiring testing and necessary use restrictions on\nLiberties and the Administration of Justice, to continue markup\ncertain chemical substances, 1:30 p.m., room S-407, Capitol.\nof pending legislation, IO a.m., 2226 Rayburn Building.\nConferees, on H.R. 10339, authorizing the Secretary of Agri-\nSubcommittee on Immigration, Citizenship and International\nculture to provide information and technical assistance to encour-\nLaw, to hold hearing on private immigration bills, IO a.m.,\nage the direct marketing of farm products from farmer to\n2237 Rayburn Building.\nconsumer, 2 p.m., room S-126, Capitol.\nSubcommittee on Administrative Law and Governmental\nConferees, closed, on H.R. 14262, making appropriations for\nRelations, to markup H.R. 11315, Foreign Sovereign Immuni-\nthe defense establishment for fiscal year 1977, 9:30 a.m., room\nties Act of 1975, and private bills, IO a.m., 219 Cannon Building.\nH-140, Capitol.\nD 1184\nCONGRESSIONAL RECORD-DAILY DIGEST\nAugust 31, 1976\nNext meeting of the SENATE\nNext meeting of the HOUSE OF REPRESENTATIVES\n10 a.m., Wednesday, September 1\n12 Noon, Wednesday, September 1\nSenate Chamber\nHouse Chamber\nProgram for Wednesday: After one special order\nProgram for Wednesday: Consideration of H.R.\nfor a speech and a period for the transaction of routine\n14238, Legislative Appropriations for fiscal year 1977\nmorning business of not to exceed 15 minutes, Senate\n(modified closed rule, 2 hours of debate);\nwill resume consideration of S. 3037, authorizing funds\nH.R. 13636, Law Enforcement Assistance Admin-\nfor fiscal year 1977 for programs under the Water Pol-\nistration (conclude consideration);\nlution Control Act (two hours on the bill).\nH.R. 14886, Presidential Transition Act Amendments\n(open rule, I hour of debate); and\nH.R. 10498, Clean Air Act Amendments (continue\nconsideration).\nExtensions of Remarks, as inserted in this issue\nHOUSE\nHamilton, Lee H., Ind., E4753\nMosher, Charles A., Ohio, E4755\nHannaford, Mark W., Calif., E4750\nMurtha, John P., Pa., E4756\nArcher, Bill, Tex., E4754\nHansen, George, Idaho, E4749\nNedzi, Lucien N., Mich., E4788\nAshbrook, John M., Ohio, E4772, E4778\nHarrington, Michael, Mass., E4756\nPaul, Ron, Tex., E4761\nAspin, Les, Wis., E4790\nHungate, William L., Mo., E4763\nRogers, Paul G., Fla., E4759\nBiaggi, Mario, N.Y., E4757, E4763\nJohnson, Albert W., Pa., E4749, E4769\nRose, Charles, N.C., E4773\nBreckinridge, John, Ky., E4785\nKemp, Jack F., N.Y., E4752, E4787\nRoush, J. Edward, Ind., E4761\nBrown, Clarence J., Ohio, E4747\nKeys, Martha, Kans., E4789\nRyan, Leo J., Calif., E4750, E4777\nCollins, Cardiss, Ill., E4769\nLujan, Manuel, Jr., N. Mex., E4757, E4768\nSantini, Jim, Nev., E4771\nConte, Silvio O., Mass., E4748\nMcCormack, Mike, Wash., E4777\nScheuer, James H., N.Y., E4763, E4782\nCrane, Philip M., III., E4751\nMcDonald, Larry, Ga., E4751, E4757, E4780\nVanik, Charles A., Ohio, E4754\nDingell, John D., Mich., E4773\nMatsunaga, Spark M., Hawaii, E4750\nWiggins, Charles E., Calif., E4755\nDowning, Thomas N., Va., E4770\nMezvinsky, Edward, Iowa, E4755\nWolff, Lester L., N.Y., E4748, E4764\nDrinan, Robert F., Mass., E4772, E4779\nMikva, Abner J., Ill., E4764\nYates, Sidney R., III., E4787\nEsch, Marvin L., Mich., E4747\nMoorhead, William S., Pa., E4754, E4779\nYoung, Andrew, Ga., E4766\nCongressional Record\nThe public proceedings of each House of Congress, as reported\nby the Official Reporters thereof, are printed pursuant to direc- -\ntions of the Joint Committee on Printing as authorized by\nappropriate provisions of Title 44, United States Code, and published for each day that one or both Houses are in session, ex-\ncepting very infrequent instances when two or more unusually small consecutive issues are printed at one time. 1 The\nCongressional Record will be furnished by mail to subscribers, free of postage, for $3.75 per month, $45 per year, or 25 cents per copy,\npayable in advance. Remit check or money order, made payable to the Superintendent of Documents, directly to the Government Printing\nOffice, Washington, D.C. 20402. 11 Following each session of Congress, the daily Congressional Record is revised, printed, permanently bound\nand is sold by the Superintendent of Documents in individual parts or by sets. I With the exception of copyrighted articles, there are no re-\nstrictions on the republication of material from the Congressional Record.\nAugust 31, 1976\nCONGRESSIONAL RECORD- DAILY DIGEST\nD 1183\nCommittee on the District of Columbia, to mark up H.R.\nSubcommittee on Criminal Justice, to continue hearings on\n15276, Park Police pay comparability; and consider H. Con.\nH.R. 14476, Special Prosecutor Act of 1976, 9:30 a.m., 2141\nRes. 694, to disapprove the Firearms Control Regulations Act\nRayburn Building.\nof 1975, passed by the Council of the District of Columbia, 9:30\nCommittee on Merchant Marine and Fisheries, Subcommittee\na.m., 1310 Longworth Building.\non Coast Guard and Navigation, to markup H.R. 13585, to\nCommittee on Education and Labor, Subcommittee on Ete-\namend the Federal Boat Safety Act of 1971; and S. 3050, to\nmentary, Secondary, and Vocational Education, to continue\nauthorize the Secretary of Transportation, when the Coast Guard\noversight hearings on the school lunch programs, 9 a.m., 2175\nis not operating as a service in the Navy, to lease for military\nRayburn Building.\npurposes structures and their associated real propérty located in\nCommittee on Government Operations, Subcommittee on\na foreign country, IO a.m., 1334 Longworth Building.\nIntergovernmental Relations and Human Resources, to mark up\nCommittee on Post Office and Civil Service, Subcommittee on\nH.R.- 14761, to establish an Office of Inspector General in the\nRetirement and Employee Benefits, to continue oversight hear-\nDepartment of Health, Education, and Welfare, IO a.m., 2247\nings on physical examinations, 9 a.m., 311 Cannon Building.\nRayburn Building.\nCommittee on Public Works and Transportation, Subcom-\nCommittee on Interior and Insular Affairs, to consider pend-\nmittee on Water Resources, to continue hearings on the Water\ning legislation, 9:45 a.m., 1324 Longworth Building.\nResources Development Act of 1976, IO a.m., 2167 Rayburn\nCommittee on International Relations, to continue markup\nBuilding.\nof H.R. 7665, to extend the Export Administration Act of 1969,\nSubcommittee on Aviation, to continue hearings on H.R.\n10 a.m., 2172 Rayburn Building.\n12349, to require retroactive adjustment of local service air\nSubcommittees on International Political and Military Affairs,\ncarrier subsidy for 1966; and H.R. 14623, to permit CAB to\nand on International Organizations, to hold joint hearings on\nauthorize all-cargo service by exemption pending CAB con-\nthe August 18 incident in the Demilitarized Zone in Korea,\nsideration of an application for initial certification of such\n2 p.m., 2172 Rayburn Building.\nservice, 9:45 a.m., 2253 Rayburn Building.\nCommittee on Interstate and Foreign Commerce, to continue\nCommittee on Science and Technology, Subcommittee on the\nmarkup of H.R. 14932, Rail Amendments of 1976, IO a.m.,\nEnvironment and the Atmosphere, to markup H.R. 14544,\n2123 Rayburn Building.\n10039 and S. 3383, weather modification legislation, 9 a.m.,\nSubcommittee on Communications, to hold hearing on H.R.\n2318 Rayburn Building.\n15268, to provide just and reasonable rates, terms, and condi-\nCommittee on Standards of Official Conduct, to consider\ntions for the use of certain rights-of-way by persons desiring to\npending business, 4:15 p.m., H-310, Capitol Building.\nlease space for wire communications; to be followed by markup\nof penalties and forfeiture, and pole attachment legislation,\nJoint Committee Meetings\n1:30 p.m., 2123 Rayburn Building.\nConferees, on S. 3149, to protect human health and the envi-\nCommittee on the Judiciary, Subcommittee on Courts, Civil\nronment by requiring testing and necessary use restrictions on\nLiberties and the Administration of Justice, to continue markup\ncertain chemical substances, 1:30 p.m., room S-407, Capitol.\nof pending legislation, IQ a.m., 2226 Rayburn Building.\nConferees, on H.R. 10339, authorizing the Secretary of Agri-\nSubcommittee on Immigration, Citizenship and International\nculture to provide information and technical assistance to encour-\nLaw, to hold hearing on private immigration bills, IO a.m.,\nage the direct marketing of farm products from farmer to\n2237 Rayburn Building.\nconsumer, 2 p.m., room S-126, Capitol.\nSubcommittee on Administrative Law and Governmental\nConferees, closed, on H.R. 14262, making appropriations for\nRelations, to markup H.R. 11315, Foreign Sovereign Immuni-\nthe defense establishment for fiscal year 1977, 9:30 a.m., room\nties Act of 1975, and private bills, IO a.m., 219 Cannon Building.\nH-140, Capitol.\n[sept. 1976?\nH.R.\nF532\n3-18-76\nthe\nvoric-final\nsummital-study\ncivil PeNALTI\nWIGGINS\n(150-223-59)\n5Pm\n9/3/76\nMax: Per Frank Polk (H ouse Judiciary Committee)\nAddendum to our discussion re HR 3532 (The Antitrust Bill)\nThe House Parliamentarian office is preparing to rule\nthat the motion to accept the Senate amendment is privileged\nand does not require a resolution to that Effect from the\nRules Committee.\nConsequently, a House motion to concur could come up as\nearly as next Thursday. A majority vote is all that is\nneeded to pass and send the bill to the President. No\namendments would be in order since any further House\namendments would be in the third degree.\nof\n12. R. FORD LIGRE\nSERVICES\nTHE WHITE HOUSE\nWASHINGTON\nSeptember 18, 1976\nMEMORANDUM FOR:\nJACK MARSH\nJIM LYNN\nWILLIAM SEIDMAN\nFROM:\nPHILIP BUCHEN\nT.\nAttached is a draft of a proposed Statement of\nthe President on The Antitrust and Competition\nPolicy of the Ford Administration. It was\nprepared originally at the Department of Justice\nand was revised slightly by me.\nI suggest that such a statement accompany the\nPresident's action on the new antitrust bill,\njust passed by Congress. It could be a part\nof his signing or vetoing statement or could\nbe issued at the same time as such a statement.\nPlease let me have your comments.\nAttachment\nDictate\nDictate\nMenday\nFORD LIBRA & CREATO\nSTATEMENT OF THE PRESIDENT\nTHE ANTITRUST AND COMPETITION POLICY\nOF THE FORD ADMINISTRATION\nThis country has become the economic ideal of the free\nworld because of its dedication to the free enterprise system.\nFull and vigorous .competition has been the watchword of\nAmerica's economic progress.\nThis Administration has long recognized that compe-\ntition is the driving force of our economy. Competitive\nmarkets promote efficiency and innovation by rewarding firms\nthat produce desired products at low costs. In a competitive\nindustry, inefficient producers are forced to become efficient\nor be driven out of business.\nCompetition is also a mighty stimulus to the development\nof new products and manufacturing processes. The free market\nsystem rewards the successful innovator. In today's inter-\nnational economy, members of a vigorously competitive economic\nsystem enjoy unlimited worldwide opportunities and contribute\nsignificantly to the stability of their domestic economies.\nIn the United States, promotion of competition is\nconsistent with our political and social goals. The undue\nconcentration of economic and political power has tra-\nditionally been seen as a threat to individual freedom.\nFORD is LIBRAR GERALD\n- 2 -\nUnder competitive conditions, economic power is fragmented;\nno one firm can control prices or supply. Political power\nis also decentralized by competition because there is no\nneed for massive governmental bureaucracies to oversee\nbusiness operations.\nBut perhaps the most compelling justification for a\nfree market economy is that it best serves the interests\nof our citizens. In a freely competitive market, consumers\nenjoy freedom of choice from a wide range of products of\nall sizes, kinds, and varieties. Consumers, through their\ndecisions in the marketplace, transmit their preferences\nand desires to businessmen who then translate those\npreferences into the best products at the lowest prices.\nThe Federal Government must play an important role\nin protecting and advancing the cause of competition.\nThrough enforcement of the antitrust laws, the\nAntitrust Division of the Department of Justice and the\nFederal Trade Commission must assure that competitors\ndo not engage in anticompetitive practices.\nULD R. FORD VIBEARY\n-3-\nA vigorous antitrust enforcement policy is most\nimportant in deterring price-fixing agreements between\ncompetitors that result in higher costs to consumers.\nAs we come out of an inflationary period and into a period\nof economic growth and expansion, we must assure that the\nprice mechanism is not artificially manipulated for private\ngain.\nThis Administration has been the first one in forty\nyears to recognize that there is a second respect in which\nthe Federal Government vitally affects the state of\ncompetition. Not only must the Federal Government seek\nto restrain private anticompetitive conduct, but so, too,\nmust the Federal Government see to it that the govern-\nmental process does not impede free and open competition.\nToo often in the past, the Federal Government has\nitself been a major source of restraints on competition.\nMany of our most vital industries have over the years\nbeen subjected to pervasive regulation. Although regulation\nhas been imposed in the name of the public interest, there\nis a growing awareness that the consumer is often the real\nloser.\nToo many important managerial decisions are made\ntoday not by the marketplace responding to the forces of\nFORD : LIBRARY TOTAL\n-4-\nsupply and demand but by the bureaucrat. The innovative\nand creative forces of major industries are suffocated\nby governmental regulation. In many instances a businessman\ncannot raise or lower prices, enter or leave markets,\nprovide or terminate services without the prior approval\nof a Federal regulatory body.\nThis is not the economic system that made this country\ngreat. Government regulation is not an effective substitute\nfor vigorous competition in the marketplace.\nTo be sure, in some instances governmental regulation\nmay well protect and advance the public interest. But the\ntime has come to recognize that many existing regulatory\ncontrols were imposed during uniquely transitory economic\nperiods that bear no relation to today's economic conditions.\nWe must repeal or modify those controls that suppress\nrather than support competition.\nThe Administration's competition policy has proceeded\nalong those very lines. We have set in motion a far-\nreaching regulatory reform program. This program has been\naccompanied by a policy of vigorous antitrust enforcement\nto implement our commitment to competition.\n&\nFORD\nLIBRAR\n- 5 -\nIn the last two years, the antitrust laws have been\nvigorously enforced by strengthened antitrust enforcement\nagencies. The resources for the Antitrust Division and\nthe Federal Trade Commission's Bureau of Competition have\nbeen increased by over 50 percent since Fiscal Year 1975.\nFor the Antitrust Division, this represented the first\nreal manpower increases since 1950.\nThe Antitrust Division's crackdown on price fixing\nresulted in indictment of 183 individuals during this\nperiod, a figure equalled only once in the 86 years\nsince enactment of the Sherman Act. The fact that the\nDivision presently has pending more grand jury investi-\ngations than ever in history proves these efforts are\nnot slackening.\nTo preserve a competitive market structure by\npreventing competitive mergers and acquisitions, the\nAntitrust Division is devoting substantial resources\nto merger investigations. At the same time, the\nDivision is litigating large and complex anti-monopoly\ncases in two of our most important industries. Cases\nFORD\nhave also been filed involving such anticompetitive\nrestraints as allocation of customers and markets\nwhich interfere with the free interaction of competitive\nforces.\n- 6 -\nThe cause of vigorous antitrust enforcement was\nmeasurably advanced when I signed the Antitrust\nProcedures and Penalties Act of 1974, which made\nviolation of the Sherman Act a felony punishable by up\nto three years' imprisonment of individuals and a\ncorporate fine of up to $1 million.\nI also signed legislation repealing Fair Trade\nenabling legislation. This action alone, according to\nvarious estimates, will save consumers $2 billion\nannually.\nTwo regulatory reform proposals I have signed -- the\nSecurities Act Amendments of 1975 and the Railroad\nRevitalization and Regulatory Reform Act inject strong\ndosages of competition into industries that had long\nrested in the shade of Federal economic regulation.\nThe Administration has also sponsored important\nlegislative initiatives to reduce regulation of other\nmodes of transportation and the regulation of financial\ninstitutions. An important element of the regulatory\nreform proposals has been the narrowing of legislative\nantitrust immunities which had been granted to industry\nrate bureaus and which permitted these groups to restrain\ni\ncompetition under official government sanction. Congress\n110\nFORD\nhas not yet acted on these proposals.\nLIBRARY\n- 7 -\nThe Administration also has underway a broad in-\ndepth review of many other legislative immunities to\nthe antitrust laws, to eliminate those immunities that\nare not truly justified. All industries and groups,\nhowever regulated and by whom, should be subject to\nthe interplay of competitive forces to the maximum\nextent feasible.\nA full measure of the Administration's commitment\nto competition is its proposed Agenda for Government\nReform Act that would include a comprehensive,\ndisciplined look at ways of restoring competition in\nthe economy. This would require in-depth consideration\nof the full range of Federal regulatory activities in\na programmatic manner that would allow for an orderly\ntransition to a more competitive environment.\nThis competition policy, which includes regulatory\nreform and invigorated antitrust enforcement, will\nprotect the businessman who desires to be competitive\nfrom both government regulators and anti-competitive\ncompetitors. In turn, the American consumers will\nbenefit from full and open competition within the\nbusiness community.\n:\nFORD\nSEP SO 1976\nTHE WHITE HOUSE\nWASHINGTON\nDATE: Sept. 30, 1976\nTO:\nJACK MARSH\nFROM: JIM CAVANAUGH\nSUBJ: LEAA\nFYI X\nACTION\nFORD i LIBRARY\nTHE WHITE HOUSE\nWASHINGTON\nSeptember 30, 1976\nMEMORANDUM FOR THE PRESIDENT\nFROM:\nJIM CAVANAUGHT\nSUBJECT:\nLEAA\nThe conference report on S. 2212, which is an\nauthorization bill for LEAA, cleared conference\na few days ago. The conference report has not been\ntaken up by either House.\nThe bill does contain a $10 million authorization\nfor state attorney generals to improve and\nupgrade their offices and to engage in parens\npatriae activities.\nGERALD FORD\nTHE WHITE HOUSE\nWASHINGTON\nDecember 7, 1976\nMEMORANDUM FOR:\nPHILIP BUCHEN\nJAMES CANNON\nDICK CHENEY\nJACK MARSH\nBILL SEIDMAN\nFROM:\nED SCHMULTS\nof\nThe Department of Justice wishes to release a report\non the Robinson-Patman Act prepared by the Antitrust\nDivision. The report reflects the views of the\nAntitrust Division and would not be expressing a\nformal position of the Administration.\nAttached is an executive summary of the Robinson-\nPatman Act report. The report concludes that the\nAct creates serious anti-competitive effects and\nshould, therefore, be repealed. In the alternative,\nfundamental amendments are suggested. If you wish\nto see a full copy of the report, which is about\ntwo inches thick, please give me a call.\nAttached also is a copy of a memorandum from the\nDeputy Assistant Attorney General in the Antitrust\nDivision outlining the manner of the proposed release\nof the report.\nIf you feel strongly that the Department of Justice\nshould not release the report at this time, please\ngive me a call before the close of business on\nDecember 10.\nAttachments\nFORD LIBRARY i\nEXECUTIVE SUMMARY OF DEPARTMENT OF JUSTICE\nREPORT ON THE ROBINSON-PATMAN ACT\nBackground\nLast year the President indicated in several speeches\nhis strong desire for consideration of reform or repeal of\nthe Robinson-Patman Act.\nFollowing those Presidential statements, the Department\nof Justice and other concerned agencies (including Commerce,\nCOWPS, SBA and OMB) under the direction of the Domestic Council\nReview Group (DCRG) considered various approaches to reform of\nthe Robinson-Patman Act. An initial analytic paper was pro-\nduced by the Antitrust Division on the Act, together with two\ndraft proposals for statutory reform. These were circulated\nwithin the Administration in July, 1975. These materials were\nthen made available to the House and Senate Judiciary-Com-\nmittees looking toward possible congressional-consideration of\nRobinson-Patman Act reform.\nIn addition, in August of 1975, a meeting of DCRG members\nwith representatives of various small business interests was\nheld at the White House to discuss possible reform proposals.\nDiscussions with the staffs of the Judiciary Committees\nindicated that, because of the crowded legislative agenda of\nboth committees, hearings on any Administration proposals\nfor repeal or reform of the Robinson-Patman Act were unlikely\nduring the Second Session of the 94th Congress. It was further\nsuggested that additional public education as to the economic\nimpact of the Act would be helpful prior to congressional con-\nsideration of any reform legislation\nIn the interim, an ad hoc committee of the House Committee=\non Small Business held a series of hearings on the Robinson-\nPatman Act. At these hearings a number of congressional and\nsmall business supporters of the Act testified and opposed any\nchange in the Act. In addition, the FTC at the hearings was\nurged to undertake more vigorous enforcement of the Act and to\ndevote increased resources to this effort. In this setting,\nthe DCRG decided that the wisest course was for it to hold a\nseries of public hearings on the economic impact of the\nRobinson-Patman Act.\nFORD\nLIBRA\nThese hearings were held on December 8, 9 and 10.\nTestimony was taken from over twenty witnesses including\nmembers of the academic community, representatives of\nsmall business associations and other businessmen, as\nwell as practicing attorneys. Testimony was also taken\nfrom the Assistant Attorney General for Antitrust, Thomas\nE. Kauper, and former Assistant Attorney General, Donald\nF. Turner.\nFollowing the conclusion of these hearings, the Antitrust\nDivision was asked to prepare a report on the Robinson-Patman\nAct based on the record of the hearings and other available\nevidence. The Report summarized here represents the culmina-\ntion of those efforts. It should be noted that the Report\nrepresents the views solely of the Antitrust Division and\ndoes not express the position of the Administration.\nSummary of the Report\nThe Report arrives at several important conclusions about\nthe impact of the Robinson-Patman Act. First, the Act creates\nserious anticompetitive effects by deterring price flexibility,\nand indeed fostering price rigidity if not price fixing;\nsecond, the Act fosters major inefficiencies in distribution\nat great cost to consumers; third, the Act fails to achieve\nany significant antitrust or procompetitive objectives; finally,\nthe Act represents a false and illusory hope for small busi-\nnesses because in the long run it fails to achieve the pro-\ntectionist advantages which it promises.\nOn the basis of these conclusions, the Antitrust Division\nrecommends that the Robinson-Patman Act be repealed. In our\nview, the costs of the Act far outweigh any discernible benefits.-\nHowever, it is recognized that others believe that some price\ndiscrimination statute is needed Therefore, an alternative\nreform recommendation has been advanced which in our judgment\nwould produce less adverse impact on the economy than the present\nAct.\nThe reform proposal has basically four elements. First, it\nis proposed that enforcement of the new price discrimination\nstatute be left solely to the FTC rather than private plaintiffs.\nThe FTC as a public agency would of course be concerned about\na proper application of the Act. The elimination of private\nplaintiffs would remove the current ability of private business\nfirms to use the threat of suit and treble damage exposure to\n2\nFORD\nblackmail competitors into withdrawing price reductions. A\nless far reaching alternative would be to eliminate the\npresent treble damage provisions for private plaintiffs.\nThe punitive effects of these treble damage provisions clearly\ndeter legitimate price competition.\nSecond, the Report recommends that the offense of\nprice discrimination be narrowed to avoid the present whole-\nsale interference in legitimate price competition. This\nnarrowing would be accomplished first by placing the burden\nof proof on the plaintiff to show that a price discrimination\nwas not cost justified, and second, by limiting those circum-\nstances in which adverse competitive injury may be inferred\nto instances of systematic discrimination, or the charging of\nprices below marginal costs. The current standard, which\npermits a finding of liability for sporadic discrimination\nor the charging of prices below fully-allocated costs\ninherently inhibits a significant number of procompetitive\nprice reductions.\nThird, the report recommends that the defenses to a\ncharge of price discrimination reflect business realities.\nThus, businessmen should be able to justify discrimination\non the basis of reasonably anticipated future costs according\nto flexible groupings of customers. Similarly, businessmen\nshould not be required to go through unrealistic and potentially\nanticompetitive verification procedures to qualify for the\nmeeting competition defense.\nFinally, the report recommends that the Act's present\nflat prohibition against discounts in lieu of brokerage and\n\"nonproportional\" promotional allowances be eliminated.\nSince, at worst these practices can only be disguised price\ndiscriminations, it is recommended that they be evaluated\nunder the Act's more general provisions, requiring a showing\nof competitive injury and permitting the interposition of\nbasic defenses.\nOf course, the basic proposal is for repeal of the\nAct, reflecting the report's finding that the implementation\nof a price discrimination statute based on faulty economic\nassumptions necessarily impedes the competitive process to\nthe great economic detriment of consumers.\n3\nFORD\nLIBRA\nRobinson-Patman Creates Serious\nAnticompetitive Effects\nThe Robinson-Patman Act is a statute of broad applicability,\ngoverning the prices which can be charged for most commodities\nand sales among businesses, including nearly all products\nwhich are to be resold by merchants. While the statute is\nintended to prevent the abuse of purchasing power by large\nbuyers, the actual effect of the statute is to discourage\nmany procompetitive price reductions.\nUnder Robinson-Patman, the Federal Trade Commission in\nan enforcement action, or a competing business firm in a\ntreble damage action, can quite easily establish a prima\nfacie case of violation. In most instances, the\ncomplainant need only show that one of his competitors was\nable to obtain a: lower price for a. product, and that such a\ndiscount was sufficient to affect the resale price for that\nitem. - Once such a showing is made, the firm granting the\ndiscount must prove that the lower. price is justified by\nsome cost saving in supplying the product to the favored\ncustomer, or that the lower price is necessary to meet-a\nlower price of a competing supplier. These defenses are\ndifficult to use. The cost-justification defense requires\ndetailed accounting studies, utilizing procedures which are\nnot part of normal accounting practice, and excluding certain\ncost savings which a prudent businessman would take into\nconsideration. Consequently, a businessman can never know\nuntil his case is finally adjudicated whether his cost-\njustification defense will be successful. Similarly, in\norder to defend a price cut on the grounds of meeting competition,\nthe businessman cannot simply rely on a statement from his\ncustomer that a lower price has been offered Rather he\nmust undertake affirmative action, such as checking invoices\nor price quotes, or actually calling his competitor: to\nverify the bid, before a \"matching\" discount can be given.\nOther provisions of the Act are even more restrictive,\nprohibiting certain payments in lieu of brokerage and promotional\nallowances regardless of their effects on competition or\ncost justification.\nAs a consequence of this overreach of the Robinson-\nPatman Act, the prudent businessman wishing to lower a price\nto a particular customer must assume that a competitor or\nthe Federal Trade Commission will be able to successfully\n4\nFORD\nchallenge that price cut and that his ability to defend such\na cut is highly uncertain. Rather than undergo the expense\nof litigation, pre-trial discovery of a firm's proprietary\ncost and price data, and the possibility of costly damages\nor injunctive relief, the cautious businessman will simply\ndecide not to cut prices.\nRobinson-Patman thus promotes pricing inflexibility.\nUnfortunately, such a result serves to reinforce high prices\nin oligopolistic manufacturing industries. In industries\nwhere there are few sellers, list prices tend to remain\nsticky and the only way high prices will come down is\nthrough the granting of selective discounts. These discounts\nover time erode the industry's high price structure leading\nto the establishment of list prices at a lower level. By\nrequiring that price cuts be an all or nothing affair,\nRobinson-Patman serves to ensure that prices will remain\nhigh oligopolists know it is not in their best interests\nto cut list prices across-the-board except in times of very\nweak demand\nThe anticompetitive effect of Robinson-Patman is\ncompounded by the fact that the meeting competition defense\nserves to encourage discussions about prices among compet-\nitors, and even price fixing agreements. While the defense\ndoes not require that a firm check directly with a competitor\nbefore meeting his price, courts have stated that if a\nbusinessman does discuss prices for the purpose of satis-\nfying Robinson-Patman, he can be exonerated of what would\notherwise be a violation of the Sherman Act. Once such\ndiscussions begin, actual price fixing arrangements may\nresult.\nFinally, restrictions on price cuts to particular\ncustomers or geographic areas serve to inhibit businesses\nfrom engaging in promotional pricing practices to gain new\ncustomers. To the extent that such promotional prices are\nnecessary to enter a market, the Act serves to insulate the\nentrenched business firms from new competition.\nIn addition to Robinson-Patman's protection of high\nprices, the Act also leads to higher costs for doing\nbusiness. Various provisions of the Act serve to protect\nthe existence of brokers and middlemen because the Act makes\nit difficult for businessmen to restructure their distribution\nsystems to meet the needs of their various customers on an\n5\nFORD\nindividual basis, Other restrictions on promotional allowances\nalso may require businesses to engage in valueless promotional\nprograms, again because of the inability to tailor such efforts\nto the realities of the marketplace. Lastly, Robinson-Patman\nleads to added costs when businessmen engage in product differenti-\nation strategies to lawfully avoid the restrictions of the Act.\nIn light of the legislative history of Robinson-Patman,\nCongressional passage of a statute having such effects becomes\nunderstandable. The Robinson-Patman Act was a product of two\nhistorical occurrences. The first was the Depression. During\nthe early 1930s, the severe deflation, high unemployment, and\nincreased volume of business bankruptcies led to the general\nbelief that competition was not necessarily in the public\ninterest because it led to prices which were destructively low.\nThrough the NRA Codes of Fair Competition, the minimum rate\nprovisions of the Motor Carrier and Civil Aeronautics Acts,\nand through Robinson-Patman, Congress sought to stabilize or\nactually enhance, price levels At about the same time\na\nrevolution was occurring in the distribution sector The\ngrowth of chain stores in the 1920s led to much concern among\nwholesalers that absorption of the wholesaling function by\nchains would force them out of business Similarly, it was\nfeared that the growth of chains would also mean a decline\nin the number of independent retailers with whom they did\nbusiness, a fear which the retailers soon adopted. Responding\nto pressures from these businessmen, state legislatures passed\nchain store taxes and fair trade laws, and the Congress passed\nthe fair trade enabling amendment to the Sherman Act--and in\n1936 passed Robinson-Patman.\nBecause of the understandable congressional desire to\ndo something about the adverse economic effects of the\nDepression, and to do something to allay the fears of inde\npendent wholesalers and retailers, it passed the Robinson-\nPatman Act without thoroughly understanding the economic assump-\ntions and long-run economic consequences implicit in such a\nstatute. Thus, we find upon examination that Robinson-Patman's\nbasic assumptions are invalid. Today, prices should be lower,\nnot higher. The granting of discounts is not inherently unfair;\nit is a necessary part of the dynamics of bringing down high\noligopoly prices. Price differences do not normally reflect\nonly differences in costs; they result from the interaction\nof both supply (cost[ and demand. Lower prices to some do\nnot mean higher prices to others, high prices to certain\n6\nGERALD A. FORD\ncustomers indicate the presence of market power on the seller's\nside and lower prices may represent a transfer of oligopoly\nprofits from manufacturers to consumers.\nThe Robinson-Patman Act Fails to Achieve Any Significant\nAntitrust Goals\nRobinson-Patman is claimed to be an appropriate supplement\nto the other antitrust laws as a means of catching potentially\nanticompetitive situations in their \"incipiency\" by preventing\nthe use of a market advantage gained through price discrim-\nination to lessen the number of competitors and decrease\ncompetition. Unlike Section 7 of the Clayton Act which covers\nstructural changes caused by mergers, the conclusion that\nprice discrimination will have anticompetitive effects relies\nupon; a: series speculative and untested inferences. It must\nbe assumed that if one manufacturer is permitted to discriminate\nin price to a retailer, the effect will necessarily be to force\na disfavored businessman from the marketplace; that such a\nsituation would affect many other similarly situated business-\nmen; and that the number- of businessmen so eliminated would be\nsufficient to seriously reduce competition in the market. The\nevidence shows, however, that such a chain of events just is\nnot likely in the case of most price discriminations. Yet,\nthese inferences are permitted in order that the statute may\nbe efficiently applied to the billions of pricing transactions\nin the economy. Thus, the Act virtually presumes that any\nprice discrimination will have an anticompetitive effect when\nthe more likely truth is that the discrimination is procompetitive.\nRobinson-Patman is, in fact, a regulatory statute, not\nan antitrust law. Those administering it seek to protect\nbusinesses regardless of their relative efficiencies, and\nregardless of varying demand characteristics- of the markets\nthey serve. As such, the effect of the Act is strikingly\nsimilar to that of the other regulatory statutes which\nempower agencies to set minimum prices. Also, the Act compels\nbusinessmen to seek legal advice before making pricing decisions,\nand may require businessmen to seek advice from the Federal Trade\nCommission before changing a marketing practice.\nFor all of this, Robinson-Patman provides no demonstrable\nantitrust benefits. Proponents argue that without Robinson-\nPatman, any immediate increase in competition and lowering\n7\nLIBRARY BERALD ? FORD\nof prices would be outweighed by the likelihood that markets\nwould become increasingly concentrated and prices would\nrise. In order for that eventuality to occur, though, it\nwould be necessary that a discrimination be so substantial\nas to force a large number of businesses out of a market,\nthat prices thereafter would rise to a level higher than\nthat charged before and that these higher prices would be\nmaintained for a long enough time to outweigh the benefit of\nthe initial price reductions. No evidence of any such\ninstance has been demonstrated, while testimony to the\ncontrary was heard by the Review Group. Likewise, studies\nconducted by the Federal Trade Commission of its own enforce-\nment orders have not demonstrated that its actions had any\nappreciable effect in improving competition. Rather, one\nstudy found such orders to have no effect, and its authors\ndoubted that price discrimination and increases in concentration\nwere related.\nGenuinely predatory practices, like below-marginal-cost\npricing can be dealt with under the Sherman Act Likewise,\nsmall businessmen can counteract the buying power of larger\nfirms through-the formation of cooperative wholesaling\noperations: Indeed, testimony was. heard from one Review\nGroup witness that his cooperative was so successful in\ncountering the buying power of the chains, that one national\nfood chain joined his group.\nRobinson-Patman Provides a False Promise to Small Business\nPerhaps the greatest irony of Robinson-Patman is that\nit does not protect small businesses as a class. Distribution\nis a dynamic sector of the economy. In order to remain\nsuccessful, businessmen must deal with changing population\nand income characteristics, changing lifestyles, changing\nproducts, changing ways of doing business, and competition\nfrom new shopping locations. Moreover, businessmen must\ncontend with competition from those who, though doing\nbusiness in the same manner and in the same area, neverthe-\nless do so in ways more responsive to the desires of the\nbuying public. In such an environment, it is simply not\nthe case that the ability of one competitor to get a\nsomewhat lower price--on merchandise of like grade and\nquality, which discount is not cost-justified and is not\n8\nFORD LIBRA\ngiven to meet competition--plays any significant role in\ndetermining the success or failure of small business as a\nclass.\nThe fact is that large and small businesses frequently\ndo not engage in precisely the same selling function. Small\nbusinesses tend to provide higher price and higher service\noptions, while larger businesses often utilize a lower\nprice, lower service, mass marketing approach. The\ndeterminant of the success or failure of a given business in\nsuch a situation is not the cost of goods purchased, it is\nconsumer preference for the price/quality/service mix of\nthe large or small business. If a business satisfies its\ncustomers, it will survive, if it does not, it will exit\nthe market, and no statute can--or should--prevent this.\nNot surprisingly, the evidence available to the Review\nGroup does not demonstrate any effect of Robinson-Patman on\nthe viability of small businesses as a group. A comparison\nbetween the position of small businesses--retailers:having\nonly one location- in the United States with Robinson-Patman\nand in Canada without it, shows that the percentage of\nstores attributable to small business is almost identical in\nboth countries. In Canada, without an effective price\ndiscrimination law, small business actually has a higher\nportion of sales than does the United States.\nFair Trade laws were more protective of small business\nthan is the Robinson-Patman Act. Yet, Congress recently\nfound in repealing the Fair Trade enabling statute that\nFair Trade simply did not protect small business.\nThus, for all its cost, Robinson-Patman gives only\nillusory protection to the small businessman. Most small\nbusinessmen work, very hard, to survive, and will support\nany statute which offers the promise of protection. But\nRobinson-Patman only offers a false promise, at a great\ncost to our society as a whole.\nSERIAL FORD LIBRARA\nUNITED STATES DEPARTMENT OF JUSTICE\nWASHINGTON, D.C. 20530\nAddress Reply to the\nDivision Indicated\nand Refer to Initials and Number\nNovember 30, 1976\nMEMORANDUM FOR: EDWARD C. SCHMULTS\nDEPUTY COUNSEL TO THE PRESIDENT\nSTANLEY MORRIS\nDEPUTY ASSOCIATE DIRECTOR\nFOR MANAGEMENT\nOFFICE OF MANAGEMENT AND BUDGET\nFROM:\nJONATHAN C. ROSE\nDEPUTY ASSISTANT ATTORNEY GENERAL\nANTITRUST DIVISION\nSUBJECT:\nROBINSON-PATMAN REPORT\nEnclosed for your review is a copy of the Robinson-\nPatman Report which you have indicated should be released\nafter you have had a chance to look at it. Upon reflection,\nwe are inclined to think that this document should be issued\nas a Department of Justice Report. The reason for this\nrests upon our expectation about its ultimate utility: we\nsee the Report having its primary impact on courts and the\nFTC considering Robinson-Patman issues. In this regard,\nwe think it would have its greatest impact if it were\nviewed like the 1955 Attorney General's Report on the\nAntitrust Laws, i.e., as a non-political evaluation of an\nantitrust law.\nYou will note the Report contains various typographical\nerrors which we estimate could be cleaned up in a matter of\nhours.\nce: ( mems & Report) -\nStanley marris (OMB)\nFORD is 076830 LIBRARY\nMYOLUTION /\n/\n1\n1976"
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