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Antitrust - General
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Antitrust - General
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John O. Marsh Files (Ford Administration)
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The original documents are located in Box 2, folder "Antitrust - General" of the John
Marsh Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 2 of The John Marsh Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
WASHINGTON
May 1, 1976
MEMORANDUM TO:
THE PRESIDENT
FROM:
ED SCHMULTS
Das
SUBJECT:
Your meeting with John Rhodes today
Jack Marsh advises that John Rhodes may wish to discuss the
pending antitrust bills at your 9:30 meeting today.
On April 29 I called on Mr. Rhodes to seek his views about the
various antitrust bills pending in Congress. He seemed to be familiar
with only the parens patriae legislation, which the House has passed.
Mr. Rhodes continues to believe that this legislation should be
vetoed, and is doubtful that it can be modified in any acceptable way.
Attached is a copy of your letter to Rhodes on parens patriae.
A subcommittee of the House Judiciary Committee has voted out
unanimously the Civil Process Act Amendments which will be taken
up by the full committee in three weeks. This bill is very close to
the Administration's proposal, which you asked Chairman Rodino to
act on in a recent letter. The Senate Omnibus antitrust legislation
has been marked up by the full Judiciary Committee, and Senators
Hart and Scott have asked the Administration to enter into negotiations
with a view to obtain a mutually acceptable bill.
We have scheduled a meeting with you on May 4 to discuss the pending
antitrust legislation. In view of that meeting I recommend that you
not commit yourself, one way or another, to Congressman Rhodes.
FORD is LIBRARY GERALD
Office of the Unite llouse Press Secretary
THE WHITE HOUSE
TEXT OF 1 LETTER BY THE PRESIDENT
TO REPRESENTATIVE JOHN J. RHODES
March 17, 1976
Dear John:
As I outlined to you on Tuesday, March 16, I support vigorous antitrust enforcement,
but I have serious reservations concerning the parens patriae concept set forth in
the present version of H.R. 8532.
I question whether federal legislation is desirable which authorizes a state
attorney general to sue on behalf of the state's citizens to recover treble damages
that result from violations of the federal antitrust laws. The states have the
ability to amend their own antitrust laws to authorize parens patriae suits in
their own courts. If a state legislature, acting for its own citizens, is not
convinced the parens patrice concept is sound policy, the Administration questions
whether the Congress should bypass the state legislatures and provide state attorneys
general with access to the federal courts to enforce it.
In addition to ny reservations about the principle of parens patriae, I are concerned
about some specific provisions of the legislation developed by the House Judiciary
Committee.
The present bill is too broad in its reach and should be narrowed to price fixing
violations. This would concentrate the enforcement on the most important anti-
trust violations.
In addition, the Administration is opposed to mandatory treble damage awards in parens
patriae suits, preferring instead a provision which would limit awards only to the
damages that actually result from the violation. The view that federal penalties
were inadequate, which has been used to justify mandatory treble damages in the past,
is no longer justifiable given the substantial increases in these penalties in
recent years.
The Administration opposes extension of the statistical aggregation of damages,
beyond parens patriae legislation, to private class action suits because this is
outside of the appropriate reach of this legislation.
Finally, the Administration prefers discretionary rather than mandatory award of
attorney's fees, leaving such awards to the discretion of the courts.
During the last two years, the Administration has sought to improve federal
enforcement efforts in the antitrust area and the resources devoted to antitrust
enforcement have increased substantially. In December 1974, I signed the Antitrust
Penalties and Procedures Act which increased maximum penalties from $50,000 to $1 Billion
for corporations and $100,000 for individuals. As I indicated above, I support
vigorous antitrust enforcement, but I do not believe H.R. 8532 is a responsible way
to enforce federal antitrust laws.
Sincerely,
&
FORD
/s/ Gerald R. Ford
RALD
The Honorable John J. Rhodes
LIBRARY
Minority Lender
House of Representatives
Washington, D.C. 20515
THE WHITE HOUSE
WASHINGTON
August 4, 1976
MEMORANDUM FOR:
ED SCHMULTS
FROM:
Yesterday during the Congressional Dennis Taylor,
JACK MARSH Jul
Congressman John Rhodes' Legislative Assistant, brought to
my attention the plan that is being discussed in the House
concerning anti-trust legislation.
Dennis says the present proposal is to lump in one package
the three anti-trust measures passed by the House and send
them as one bill to the Senate, and the purpose of his con-
versation was to inquire as to what would be the Administra-
tion's position on parens patriae which is one of the pro-
visions.
I indicated to Dennis that I felt the President's view on
parens patriae had not significantly changed and before they
proceed too far, there should be some further discussions and
conferences. I think it would be very helpful if you could
touch base with Dennis Taylor and mention this matter to him.
His telephone number is 225-0608.
Max and I will be glad to meet with you and go over this some-
time when you would like.
Many thanks.
CC: Max Friedersdorf
FORD is LIBRARY GERALD
AUG 1 0 1976
THE WHITE HOUSE
WASHINGTON
August 10, 1976
MEMORANDUM FOR:
LARRY SPEAKES
FROM:
KEN LAZARUS th
Jack Marsh asked our office to provide you with some guidance in
fashioning a response to inquiries arising from the news reports
of an antitrust investigation of the auto manufacturers (see Tab A).
Attached (at Tab B) is some background information on the subject
provided by the Antitrust Division of the Department of Justice.
The Department recommends that any questions which are received
on this matter be referred to them for response. However, I have
been apprised of the fact that all of this information is already a
matter of public record.
cy to Schmults
do
Attachments
cc: Phil Buchen
Jack Marsh
FORD i LIBRARY GERALD
TAB
A
6817 BALD P. FORD
Ken
THE WHITE HOUSE
WASHINGTON
August 5, 1976
MEMORANDUM FOR: PHIL BUCHEN
FROM:
As you are aware, that there will
JACK there MARSH Jane
be an anti-trust investigation of the auto manufacturers.
This is more fully reported on in today's New York Times.
It is not unlikely that we are going to get some questions
on this as to the President's view and position. Parti-
cularly, Ron Nessen can expect these inquiries.
I think it would be helpful if we could develop some guidance
for Ron as to how to respond. It may be that he will want to
refer the questions to Justice.
Many thanks.
&
FORD
RALD
ANTITRUST STUDY
ANTITRUST STUDY
ON CARS PLANNED
ON CARS PLANNED
N.Y Times
8/4/76
Continued From Page 1, Col. 7
Move by F.T.C. and Justice
the manufacture and distribu-
Department is Deplored by
tion of automobiles."
General Motors and Ford
"Among the matters to be
investigated are pricing poli-
cies, scale economics, vertical
By The Associated Prese
integration, and automobile
WASHINGTON, Aug. 3-An
distribution practices," the
antitrust investigation of the
terse statement added.
nation's automobile makers
The announcement said that
was approved today by the
"the existence of an investiga-
Federal Trade Commission and
tion does not imply that viola-
the Justice Department.
tions of law have occurred."
The General Motors Corpo-
Staff proposals for antitrust
ration, which controls more
activity against the auto indus-
than half the United States
try have been in existence for
years in both. the commission
market. was considered to ise
and the Justice Department.
the prime target, though the
The Justice Department was
other companies might also be
on the verge of filing a suit
drawn into a legal attack
against General Motors in 1968,
Thomas A. Murphy, G.M.'s
but dropped the matter for lack
chairman, said that he expect-
of support from the incoming
Administration of President
ed to be able to show that the
Richard M. Nixon.
conspiracy to control the mar-
industry. was competitive and
A Justice Department spokes-
ketplace. Instead, the argu-
in compliance with the law.
man confirmed today that the
ment is that the industry lead-
But he added that he deplored
F.T.C.'s action had been cleared
ers effectively block or stifle
"the waste of public and pri-
with the department. He said
competition from smaller con-
the Justice Department's own
vate resources that this: task
cerns through tacit similarities
lawyers have been keeping an
will entail."
in marketing and prices.
eye on the industry but "we
'Yet Another Investigation*
weren't close to any kind of
Lee A, Iacocca, president of
imminent filing."
However, it was agreed, he
the Ford Motor Corporation,
added, that if the F.T.C. devel-
the No. 2 car maker, said that
oped any kind of criminal case
"the decision of the Federal
against the auto makers, the
Trade Commission to com-
department would move in The
mence yet another investiga-
F.T.C. is empowered only to
tion of the automobile industry
bring civil actions.
is unfortunate and unneces
The investigation can be ex-
pected to take considerable
sary."
time, and any resulting litiga-
The Chrysier Corporation
tion could last several years.
ranks behind Ford and the
Owen Johnson, director of
American Motors Corporation
the F.T.C.'s Bureau of Compe-
is next in the industry
tition, said that if an antitrust
The F.T.C.'s announcement
suit. should develop, General
Motors, which had sales of $32
said that the inquiry would
billion in 1974, would not
focus on "the economic struc-
necessarily be the only de-
ture of the American automo-
fendant.
bile industry on the economic
He noted, for example, that
performance of firms, both do-
the F.T.C. earlier this year
mestic and foreign, engaged in
brought a "shared monopoly'
&
FORD
casa against all the major
Continued on Page 52, Column 5
cereal makers. The shared mon-
110
opoly argument acknowledges
that there may be no overt
TAB
B
&
FORD
LIBRARY
U.S. DEPARTMENT OF JUSTICE
August 10, 1976
To:
Kenneth A. Lazarus
Associate Counsel to the President
From:
Joe Sims
Deputy Assistant Attorney General
Antitrust Division
Subject: Automobile Investigation
This memorandum is in response to your request last
night for a short statement of the facts surrounding our
clearance to the Federal Trade Commission to initiate
their broad-scale investigation of the automobile industry.
The Department of Justice and the Federal Trade
Commission have, for many years, had an informal clearance
process which basically involves each agency, prior to
beginning an investigation, informing the other agency and
asking whether such an investigation would conflict with
anything underway or contemplated by the other agency.
This "clearance" process is not binding on either agency,
but is simply an attempt to avoid duplication of effort.
Pursuant to this clearance process, the Federal Trade
Commission in late July informed the Department that they
were prepared to undertake a substantial investigation of
the automobile industry, and were ready to commit significant
resources to such an investigation. They asked whether
such an investigation would conflict with anything underway
or contemplated by the Department. In fact, although the
Department has traditionally been the active agency in the
automobile industry, we had no investigation underway and
had in fact just completed an economic analysis of the
industry which was not particularly sanguine about the
desirability of antitrust investigations in that industry.
Based on these facts, we ordinarily would routinely grant
the requested clearance to the Commission.
Because this industry had traditionally been in our
bailiwick, however, and because of the obvious importance
of this industry, we carefully considered the question of
FORD
REVOLUTION
AMERICAN
1778-1978
clearance. In fact, we also met at their request with
counsel for General Motors to hear their views on the
question of clearance, which they opposed. After con-
sidering the matter for about two weeks, we determined
that there was no rational basis for refusing clearance
to the Federal Trade Commission and, on August 2 we
informed Chairman Collier by letter that we were prepared
to clear the Commission's investigation subject to two
conditions: first, that this clearance would not foreclose
the Department from future investigations in the industry,
including specifically criminal investigations; and
second, that at the conclusion of the Commission's investi-
gation, the Department would be given access to information
developed by the Commission.
On August 3, Chairman Collier responded to our letter
by accepting the conditions contained therein.
Attached are copies of the exchange of correspondence
between the Antitrust Division and the Commission, which
have been made available to the press with the Commission's
concurrence.
I would suggest that any questions that the White
House receives on this matter be referred to the Department
of Justice for response.
Attachment
FORD & LIBRARY
FEDERAL TRADE COMMISSION
WASHINGTON, D. C. 20580
OFFICE OF THE CHAIRMAN
AUG 3 1976
The Honorable Donald I. Baker
Acting Assistant Attorney General
Antitrust Division
Department of Justice
Washington, D. C. 20530
Dear Mr. Baker:
This is in reference to your letter of August 2, 1976,
in which you agreed to clear to the Commission a broad
investigation of the automobile industry, subject to the
conditions specified in your letter. The specified
conditions are acceptable to the Federal Trade Commission.
Accordingly, the Commission will initiate the necessary
papers for the formalization of this clearance agreement.
Sincerely
Calvin J. Collier
Chairman
FORD i LIBRARY 07V
02 AUG 1975
Honorable Calvin J. Collier
Chairman
Federal Trade Commission
Washington, D.C. 20580
Dear Mr. Chairman:
Pursuant to the liaison procedure between the
Federal Trade Commission and the Department of Justice,
the Commission has requested clearance to conduct a
broad investigation of the automobile industry. We
understand that the Commission has completed a detailed
economic study and now desires to conduct a comprehensive
investigation to determine whether or not violations of
Section 5 of the Federal Trade Commission Act are present.
Subject to the following conditions, the Department
is prepared to process the clearance request without
objection. First, this clearance would not foreclose
the Department of Justice from future specific investi-
gations in this industry, including particularly investi-
gations of a criminal nature. Any such future investi-
gations would be subject to normal clearance procedures,
In that connection, the Commission, consistent with our
established practice, would undertake to advise the
Department if any evidence of a potential criminal
nature is uncovered.
Second, at the conclusion of the investigation,
the Department would be given access to information
obtained by the Commission. Obviously, this would be of
particular importance if the Commission should decide
that no action under Section 5 were appropriate.
If these conditions are acceptable, please let
us know and we will proceed to process the clearance
request.
&
FORD
LIBRARY
As a final point, I should note that the Department
has a substantial number of documents obtained by grand
jury subpoena during the course of a prior investigation.
That investigation was closed long ago, and the return
of those documents has recently been requested. Since
we have no basis to retain them, we will begin returning
them on August 15.
Sincerely yours,
DONALD I. BAKER
Acting Assistant Attorney General
Antitrust Division
FORD & LIBRARY
FEDERAL TRADE COMMISSION
WASHINGTON, D. C. 20580
OFFICE OF THE CHAIRMAN
AUG 3 1976
The Honorable Donald I. Baker
Acting Assistant Attorney General
Antitrust Division
Department of Justice
Washington, D. C. 20530
Dear Mr. Baker:
This is in reference to your letter of August 2, 1976,
in which you agreed to clear to the Commission a broad
investigation of the automobile industry, subject to the
conditions specified in your letter. The specified
conditions are acceptable to the Federal Trade Commission.
Accordingly, the Commission will initiate the necessary
papers for the formalization of this clearance agreement.
Sincerely
Calvin J. Collier
Chairman
FORD i LIBRARY
02 AUG 1975
Honorable Calvin J. Collier
Chairman
Federal Trade Commission
Washington, D.C. 20580
Dear Mr. Chairman:
Pursuant to the liaison procedure between the
Federal Trade Commission and the Department of Justice,
the Commission has requested clearance to conduct a
broad investigation of the automobile industry. We
understand that the Commission has completed a detailed
economic study and now desires to conduct a comprehensive
investigation to determine whether or not violations of
Section 5 of the Federal Trade Commission Act are present.
Subject to the following conditions, the Department
is prepared to process the clearance request without
objection. First, this clearance would not foreclose
the Department of Justice from future specific investi-
gations in this industry, including particularly investi-
gations of a criminal nature. Any such future investi-
gations would be subject to normal clearance procedures,
In that connection, the Commission, consistent with our
established practice, would undertake to advise the
Department if any evidence of a potential criminal
nature is uncovered.
Second, at the conclusion of the investigation,
the Department would be given access to information
obtained by the Commission. Obviously, this would be of
particular importance if the Commission should decide
that no action under Section 5 were appropriate.
If these conditions are acceptable, please let
us know and we will proceed to process the clearance
request.
ERALD R. FORD
As a final point, I should note that the Department
has a substantial number of documents obtained by grand
jury subpoena during the course of a prior investigation.
That investigation was closed long ago, and the return
of those documents has recently been requested. Since
we have no basis to retain them, we will begin returning
them on August 15.
Sincerely yours,
DONALD I. BAKER
Acting Assistant Attorney General
Antitrust Division
&
FORD
ALD
LIBRAR
THE WHITE HOUSE
WASHINGTON
August 24, 1976
MEMORANDUM FOR:
JACK MARSH
FROM:
MAX FRIEDERSDORF
w.6.
SUBJECT:
H. Res. 1462, Anti-Trust Resolution
The House will consider today H. Res. 1462, a parliamentary
device reported by the Rules Committee which would permit three
previously passed House bills to be taken to Conference with the
Senate as a package.
The bills include H.R. 8532 (Parens Patriae passed previously by
voice vote); H.R. 13489, Anti-Trust Civil Process Amendments and
H.R. 14580, Pre-Merger Notification, both previously passed on
suspension.
Chairman Rodino, supported by Representative Bob McClory, appeared
before Rules prior to recess to seek the Resolution in order to
facilitate a Conference.
I recommend we oppose the Resolution. It marries good legislation,
pre-merger and civil process, to objectionable legislation, namely,
parens patriae which has passed both the House and Senate in
objectionable form.
To oppose the Resolution today would signal objections only to the
unusual parliamentary procedure of merging three previously
passed bills.
Defeat of H.Res. 1462 would insure the President of considering
the three bills on their separate merits and not having to buy
all or nothing.
Ed Schmults concurs that we oppose H. .Res. 1462. Bill Seidman
disagrees, maintaining that this puts the Administration on
the politically objectionable side of big business.
CC: Bill Seidman
Ed Schmults
FORD
10
-2-
ADDENDUM
Minority Leader John Rhodes is putting out a whip advisory
that he is personally opposed to the bill as a bad piece
of legislation.
Michel defers to the Republican Members of the House Judiciary
Committee; John Anderson believes the House will adopt the
Resolution and that the White House should not get out front
on a Custer's Last Stand.
Hutchinson favors the Resolution; opposes Parens Patriae.
Wiggins is noncommital and Caldwell Butler's dislike of
Parens Patriae is constrained because the Virginia attorney
general is running for Governor.
FORD & LIBRA
August 31, 1976
CONGRESSIONAL RECORD-DAILY DIGEST
D 1175
vide for participation by the Veterans' Administration
tive relief against threatened loss or damage by a viola-
in the national Swine Flu immunization program.
tion of the antitrust laws.
Page S15023
Pages S15045-S15046
(8) By 57 yeas to 25 nays, tabled Hruska amend-
Postal Service Organization and Financing: Senate
ment No. 2253, to provide that if a State fails to estab-
agreed to the conference report on H.R. 8603, to amend
lish that the defendant acted in willful violation of the
the laws with respect to organizational and financial
ántitrust laws, the mandatory relief shall be reduced
matters of the United States Postal Service and the
from treble to single damages;
Page $15025
Postal Rate Commission, thus clearing the measure for
(9) By 52 yeas to 26 nays, tabled Bellmon motion
action by the House.
Pages 514996-S14997
No. 3, calling for Senate to agree to the House amend-
Government in Sunshine: Senate agreed to the con-
ment to the Senate amendment with an amendment
ference report on S. 5, to provide that meetings of gov-
to provide that no portion of any monetary relief shall
ernment agencies be open to the public, thus clearing
be paid to any private counsel employed by the State,
the measure for the White House.
Pages $15043-515045
or any person other than the natural persons residing
Antitrust Amendments: Senate continued to debate
in such State in whose behalf such action was brought;
House message on H.R. 8532, to improve and facilitate
Page 515028
the expeditious and effective enforcement of the anti-
(10) By 43 yeas to 2I nays, tabled Allen amendment
trust laws, taking action on proposed amendments and
No. 2239, to provide that no person may participate in
motions made in connection therewith, as follows:
bringing an action under Title III while seeking the
(I) By 63 yeas to 27 nays, three-fifths of those Sena-
nomination for election to any State or Federal public
tors duly chosen and sworn having voted in the affirma-
office;
Page 515037
tive, agreed to motion to close further debate on Robert
Senate reached unanimous consent agreement con-
C. Byrd motion that Senate agree to the House amend-
cerning the further consideration of this bill as follows:
ment to the Senate amendment with an amendment
To resume consideration thereof at 2 p.m. on Tues-
in the nature of a substitute to this bill;
Page $15003
day, September 7-2 hour time limitation for debate-
(2) By 27 yeas to 62 nays, rejected Alten amendment
when it will be in order for Senator Allen to reoffer his
No. 2232, in the nature of a substitute for substitute
amendment No. 2232, in the nature of a substitute;
amendment embodied in Robert C. Byrd motion;
To resume its consideration at 2 p.m. on Wednesday,
Page S15004
September 8, with vote at 3 p.m. on question of adoption
(3) By 82 yeas to 3 nays, agreed to motion to in-
of Allen amendment No. 2232, and, if rejected, to be
struct the Sergeant at Arms to request the presence of
followed by vote on Robert C. Byrd motion; and that
absent Senators;
Abourezk unprinted amendment No. 410, in the nature
Page $15014
of a substitute, be withdrawn from consideration.
(4) By 83 yeas to 4 nays, agreed to motion to instruct
Page $15047
the Sergeant at Arms to compel the presence of absent
Pages $15000-$15043, 515047
Senators.
Page $15017
Toxic Substances Control: Senate disagreed to the
(5) Tabled Allen unprinted amendment No. 411,
House amendments to S. 3149, to protect human health
(in the nature of a substitute for the substitute amend-
and the environment by requiring testing and necessary
ment embodied in Robert C. Byrd motion) as follows:
use restrictions on certain chemical substanees, agreed
(a) Division I-Title Amendment-tabled by voice
to conference with the House and appointed as con-
vote; (b) Division 2-Declaration of Policy-tabled by
ferees Senators Magnuson, Hartke, Hart of Michigan,
63 yeas to 2I nays; (c) Division 3-Antitrust Civil Pro-
Durkin, Tunney, Baker, and Stevens.
Page S14986
cedure Act Amendments-tabled by 6I yeas to 19 nays;
Indian Claims Commission: Senate disagreed to the
(d) Division 4-Parens Patriae amendments-tabled
House amendment to S. 2981, authorizing funds for
by 62 yeas to 24 nays; (e) Division 5-Premerger. No-
the Indian Claims Commission for fiscal year 1977,
tification and Stay-tabled by 63 yeas to 23 nays; and
requested conference with the House and appointed as
(f) Division 6-Making the bill effective no sooner than
conferees Senators Jackson, Metcalf, Johnston, Abou-
January I, 1977-tabled by 61 yeas to 23 nays.
rezk, Fannin, and Bartlett.
Pages $15117-515118
Pages $15009, $15017-515019
Water Pollution Control: Senate laid down for fur-
(6) By 55 yeas to 23 nays, tabled Thurmond amend-
ther consideration tomorrow S. 3037, authorizing funds
ment No. 2255, placing compensation on plaintiffs at-
for fiscal year 1977 for programs under the Water
torney's fees on same basis as that paid by State to pri-
Pollution Control Act.
Page $15117
vate counsel retained;
Page S15022
Presidential Communication: Senate received a com-
(7) By 58 yeas to 24 nays, tabled Tower unprinted
munication from the President transmitting a report
amendment No. 412, to strike provision which provides
setting forth his determination that import relief for the
for court costs and attorney's fees in actions for injunc-
U.S. industry engaged in the commercial production
Rhudes - 150-180
or stury veto sig.
D 1176
CONGRESSIONAL RECORD-DAILY DIGEST
August 31, 1976
and extraction of honey is not in the national economic
ticipation by foreign banks in domestic financial mar-
interest, and explaining the reasons for his decision-
kets, receiving testimony from George H. Dixon,
referred to Committee on Finance.
Page $15049
Deputy Secretary of the Treasury; Stephen S. Gardner,
Presidential Messages: Senate received the following
Vice Chairman, Board of Governors of the Federal
messages from the President:
Reserve System; John B. Olin, Conference of State Bank
Transmitting annual report of the National Council
Supervisors, Washington, D.C.; William Volckhausen,
on the Arts and the National Endowment for the Arts
First Deputy Superintendent of Banks of New York,
for fiscal year. 1975-referred to Committee on Labor
Albany; Carol Greenwald, Commissioner of Banks of
and Public Welfare; and
Massachusetts, Boston; Robert Ackerman, Pacific
Transmitting legislation to establish a IO year national
Coast Stock Exchange, San Francisco; Michael Tobin,
commitment to double America's heritage of national
Midwest Stock Exchange, Chicago; James Dowd, Bos-
parks and national wildlife refuges-referred jointly to
ton Stock Exchange, Boston; Theodor Schmidt-
Committees on Interior and Insular Affairs and
Scheuber, ABD Securities Corporation, New York
Commerce.
City; Hart Perray, So Gen-Swiss International Corpora-
Pages S15047-S15048
tion, New York City; Dr. Wolfgang Jahn, Duesseldorf,
Legislative Program: Majority Leader discussed Sen-
representing European Economic Community Banking
ate's legislative program for tomorrow and following
Federation, accompanied by his associates; Paul E.
forthcoming Labor Day Recess.
Page S15119
Hollos, and Steuart L. Pittman, both of Institute of For-
Committee Authority To Sit: Certain committees
eign Bankers, Washington, D.C.; and Douglas A.
were authorized to sit during sessions of the Senate on
Smith, Bankers Association for Foreign Trade, Wash-
Wednesday, September I, and on Wednesday, Septem-
ington, D.C.
ber 8.
Page S15022
Subcommittee adjourned subject to call.
Treaty Received: International Convention for the
SECOND CONGRESSIONAL BUDGET RESOLUTION
Safety of Life at Sea (Ex. O, 94th Cong., 2d sess.) was
received, the injunction of secrecy removed therefrom
Committee on the Budget: Committee ordered favor-
and the treaty, together with accompanying papers,
ably reported an original concurrent resolution revis-
was referred to Committee on Foreign Relations.
ing the congressional budget for the Federal Gov-
Page S15045
ernment for fiscal year 1977. As approved by the
Nominations: Senate received the nomination of
committee the resolution recommends $412.8 billion
Everett T. Keech, of the District of Columbia, to be an
for outlays; $447.5 billion for new budget authority; and
Assistant Secretary of the Air Force.
$362 billion for total revenues for fiscal year 1977.
Also, Senate received the withdrawal of the nomina-
tions of Margareta E. White, of Virginia, and Joseph
REVENUE SHARING AND WITHHOLDING RATES
R. Fogarty, of Rhode Island, each to be a member of
Committee on Finance: Committee announced that in
the Federal Communications Commission, and the
nominations were then resubmitted for different terms
an evening session on Monday, August 30, it ordered
of office.
favorably reported the following bills:
Page $15120
H.R. II997, to amend the Internal Revenue Code of
Quorum Calls: Three quorum calls were taken today.
1954 with respect to the tax treatment of certain divesti-
Pages $15004, $15014, $15017
tures of assets by bank holding companies; and
Record Votes: Fourteen record votes were taken today
H.R. 13367, to amend and extend the State and Local
(total-559).
Fiscal Assistance Act-"revenne sharing" (amended).
Pages $15004-$15005, $15014, S15017, S15018-S15020,
S15022, S15023, $15025, S15028, $15038
As approved by the committee, the bill would (a) ex-
Recess: Senate met at II a.m. and recessed at 10:58
tend the program for an additional 53/4 years through
p.m. until IO a.m. on Wednesday, September I. (For
September 30, 1982; (b) set funding for fiscal year 1977
program for Wednesday, see last page of today's
at $6.9 billion; and (c) increase annual increment by
Record.).
$150 million starting with fiscal year 1978.
Page $15119
Also, committee agreed to an amendment to extend
Committee Meetings
the present withholding tax rates until September 15,
(Committees not listed did not meet)
1976, intended to be offered as a committee amend-
ment to H.R. 3052, to amend the Internal Revenue Code
INTERNATIONAL BANKING
of 1954 with respect to the tax treatment of the gain on
Committee on Banking, Housing and Urban Affairs:
the lapse of options to buy or sell securities, when such
Subcommittee on Financial Institutions held hearings
measure (now on Senate Calendar) is considered by the
on H.R. 13876, to provide for Federal regulation of par-
Senate.
August 31, 1976
CONGRESSIONAL RECORD- DAILY DIGEST
1177
COMMITTEE BUSINESS
ceiving testimony from Clifford I. Barrett, Assistant
Committee on Foreign Relations: Committee ordered
Commissioner, Bureau of Reclamation, Department of
favorably reported the following business items:
the Interior.
Customs Convention on Containers, 1972, and the
COAL MINE SAFETY
International Convention for Safe Containers (Ex. X,
93d Cong., Ist sess.);
Committee on Labor and Public Welfare: Committee
Agreement on the Conservation of Polar Bears (Ex.
ordered favorably reported, with amendments, S. 1302,
I, 94th Cong., Ist sess.);
to promote safety in the mining industry; and ordered
Convention for the Conservation of Antarctic Seals,
reported without recommendation H.R. 13555, House
with Annex (Ex. K, 94th Cong., 1st sess.);
companion measure.
Protocol amending the Interim Convention on Con-
BLACK LUNG
servation of North Pacific Fur Seals (Ex. M, 94th Cong.,
2d sess.); and
Committee on Labor and Public Welfare: Subcommit-
Fifth International Tin Agreement (Ex. J, 94th Cong.,
tee on Labor approved for full committee consideration
2d sess.); and
with amendments, H.R. 10760, to improve program of
The nominations of Robert J. McCloskey, of Mary-
benefits for victims of black lung disease.
land, to be Ambassador to the Kingdom of the Nether-
KENNEDY CENTER FUNDS
lands; and William G. Bradford, of Illinois, to be Am-
bassador to the Republic of Chad.
Committee on Public Works: Subcommittee on Build-
ings and Grounds held hearings on H.R. 14360, author-
Prior to these actions, committee received testimony
izing $3.3 million for repair and reconstruction of the
as follows:
John F. Kennedy Center for the Performing Arts, re-
On the nomination of Ambassador McCloskey from
ceiving testimony from Roger Stevens, Chairman, Board
J. Ashton-Greene, Pass Christian, Mississippi;
of Trustees, John F. Kennedy Center for the Perform-
On Ex. I, 94-1, Ex. K, 94-1, and Ex. M, 94-2 from
ing Arts, and Jimmie L Dunning, Deputy Director,
Lindsay Grant, Acting Deputy Assistant Secretary for
National Park Service, Department of the Interior.
Environmental and Population Affairs, Bureau of
Hearings were adjourned subject to call.
Oceans and International Environmental and Scientifie
WATER RESOURCE DEVELOPMENT
Affairs, Department of State; and Richard Frank, Cen-
ter for Law and Social Policy, Washington, D.C.; and
Committee on Public Works: Subcommittee on Water
On Ex. X, 93-I from Richard Abbey, Assistant Chief
Resources continued to consider proposed water resource
Counsel, and David Bamowetz, International Opera-
development legislation, but did not complete action
tions Division, both of the U.S. Customs Service, Depart-
thereon and will meet again tomorrow.
ment of the Treasury; and Rear Admiral William M.
SENATE COMMITTEE REORGANIZATION
Benkert, Chief, Office of Merchant Marine Safety, U.S.
Coast Guard, Department of Transportation.
Select Committee on Committees: Committee met to
consider proposals for "starting points" in dealing with
WATER PROJECTS-TEXAS,
the Senate committee jurisdictional problem, and an-
NEW MEXICO/CALIFORNIA
nounced that further hearings on this subject will be
Committee on Interior and Insular Affairs: Subcom-
held September I4 through 16.
mittee on Energy Research and Water Resources con-
cluded hearings on S. 3712, authorizing the construc-
MEDICAID PRACTICES
tion, operation, and maintenance of an extension to the
Special Committee on Aging: Subcommittee on Long-
existing American Canal, Rio Grande Project, Texas-
Term Care continued hearings to report the results of
New Mexico, after receiving testimony from Representa-
its investigation into alleged fraud and abuse among
tive White; Edwin F. Sullivan, Assistant Commissioner,
participants in the medicaid program, receiving testi-
Bureau of Reclamation, Department of the Interior;
mony from Robert B. Fiske, Jr., U.S. Attorney, and
E. H. Bacza, Mayor of El Paso; Jessie Gilmer, Rio
George Wilson, Associate U.S. Attorney, both of the
Grande Compact Commission, State of Texas, Austin;
Southern District of New York; Joseph Ingber and
and George Mosley, El Paso County Water Improve-
Sheldon Styles, Chiropractors, New York City; Irving
ment District, Texas; and
Seidman representing Dr. Clyde Weissbart, and Dr.
On S. 3727, authorizing the construction, operation,
Nancy Kurke, East Harlem Medical Center, New York
and maintenance of the Allen Camp Unit, Pit River
City.
Division, Central Valley Project, California, after re-
Hearings were recessed subject to call.
D 1178
CONGRESSIONAL RECORD-DAILY DIGEST
August 31, 1976
House of Representatives
Chamber Action
Agreed to an amendment that inserts language con-
tained in H.R. 12835, H.R. 12851, and H.R. 14070 as
Bills Introduced: 36 public bills, H.R. 15337-15372;
previously passed by the House.
4 private bills, H.R. 15373-15376; and 13 resolutions, H.J.
Res. 1081, H. Con. Res. 726 and 727, and H. Res. 1503-
Subsequently, the House insisted upon its amendment
and asked a conference with the Senate. Appointed as
1512 were introduced.
Pages H9319-H9321
conferees: Representatives Perkins, Thompson, Brade-
Bills Reported: Reports were filed as follows:
mas, O'Hara, Hawkins, Ford of Michigan, Mink,
Conference Report on H.R. 8603, Postal Reorganiza-
Meeds, Chisholm, Biaggi, Andrews of North Carolina,
tion Act Amendments of 1976 (H. Rept. 94-1444);
Lehman, Benitez, Blouin, Cornell, Simon, Beard of
H.R. 13950, to provide for the cooperation between
Rhode Island, Zeferetti, Miller of California, Mottl,
the Secretary of the Interior and the States with respect
Hall, Quie, Ashbrook, Bell, Erlenborn, Esch, Eshleman,
to the regulations of surface coal mining operations,
Buchanan, Jeffords, Goodling, and Smith.
and the acquisition and reclamation of abandoned
Pages H9249-H9251
mines, amended (H. Rept. 94-1445);
Committee Elections: House agreed to H. Res. 1503,
H.R. 15136, to authorize appropriations for construc-
electing Representative Steed chairman of the Commit-
tion of facilities on Guam, amended (H. Rept.
tee on Small Business; and
94-1446);
Conference report on S. 2184, to authorize appropri-
H. Res. 1504, electing Representative Ichord as a
member of the Committee on Small Business.
ations for the winter Olympic games (H. Rept.
Page H9251
94-1447);
H. Res. 1507, providing for the consideration of H.R.
Fire Prevention Authorization: By a voice vote the
14238, making appropriations for the Legislative
House passed S. 2862, Fire Prevention and Control Act
Branch for fiscal year 1977 (H. Rept. 94-1448);
authorization for fiscal year 1977 and 1978; clearing the
H. Res. 1472, providing funds for the Select Com-
measure for the President.
Pages H9251-H9252
mittee on Narcotics Abuse and Control (H. Rept.
Private Bill: By a voice vote the House passed S. 3779,
94-1449);
a private bill; clearing the measure for the President.
H. Res. 1497, authorizing appropriations for special
Page H9252
counsel to represent the Sergeant at Arms in the case
Toxic Substances: Speaker appointed Representative
of Pressler V. Simon, et al. (H. Rept. 94-1450);
Brodhead, Scheuer, and Rinaldo as additional con-
H. Res. 1510, providing for the consideration of H.R.
ferees to the committee of the conference on S. 3149,
3605, relating to the Federal excise tax on beer (H. Rept.
Toxic Substances Control Act; and Representative
94-1451);
Devine, vice Representative McCollister, resigned.
H. Res. 1511, providing for the consideration of H.R.
Page H9252
6684, Exclusive Territorial Franchise Act (H. Rept.
94-1452);
National Emergencies: House agreed to the Senate
H. Res. 1512, providing for the consideration of H.R.
amendments to H.R. 3884, National Emergencies Act;
14886, Presidential Transition Act of 1976 (H. Rept.
clearing the measure for the President.
Page H9253
94-1453);
Presidential Message-Arts: Received and read a
H.R. 14829, to provide for consumers a further means
message from the President transmitting the Annual
of minimizing the impact of inflation and economic
Report on the National Council on the Arts and the
depression by narrowing the price spread between costs
National Endowment for the Arts for fiscal year 1975-
to the producer and the consumer of needed goods, serv-
referred to the Committee on Education and Labor.
ices, facilities, and commodities through the develop-
Page H9258
ment and funding of specialized credit sources for, and
Government in Sunshine: By a yea-and-nay vote of 384
technical assistance, to self-help, not-for-profit coopera-
yeas the House agreed to the conference report on S.5,
tives (H. Rept. 94-1454) and
Government in the Sunshine Act; clearing the measure
H.R. 12808, to improve peanut programs (H. Rept.
for Senate action.
Pages H9258-H9262
94-1455).
Page H9319
Electric Vehicles: By a voice vote the House agreed
Education Amendments: By a voice vote the House
to the conference report on H.R. 8800, Electric and
passed S. 2657, to extend the Higher Education Act of
Hybrid Vehicle Research, Development, and Demon-
1965, to extend and revise the Vocational Education
stration Act of 1976; clearing the measure for the
Act of 1963, amended.
President.
Pages H9262-H9267
August 31, 1976
CONGRESSIONAL RECORD-DAILY DIGEST
D1179
Automotive Research: By a yea-and-nay vote of 344
An amendment which sought to retain the present
yeas to 39 nays the House agreed to the conference
law definition of "local elected officials" in the Regional
report on H.R. 13655, Automotive Transport Research
Planning Unit representation requirement; and
and Development Act of 1976; clearing the measure
An amendment in the nature of a substitute which
for Senate action.
Pages H9267-H9273
sought to require mutual resolution of differences be-
Pueblo Indians: By a yea-and-nay vote of 387 yeas
tween the State chief executive officer and the State legis-
the House agreed to the conference report on S. 217,
lature over statewide plans prior to submission to the
to repeal the Act of May 10, 1926, relating to the con-
Administration.
demnation of certain lands of the Pueblo Indians in
H. Res. 1246, the rule under which the bill was con-
the State of New Mexico; clearing the measure for
sidered, was agreed to earlier by a yea-and-nay vote of
Senate action.
388 yeas.
Pages H9273-H9274
Pages H9274-H9309
Committee to Sit: Objection was heard to a request
Legislative Program: Majority leader announced the
that the Committee on House Administration be per-
legislative program for tomorrow.
Page H9312
mitted to sit during proceedings of the House today
Amendments Ordered Printed: Amendments ordered
under the 5-minute rule.
Pages H9275-H9276
printed pursuant to the rule appear on pages H9321-
Late Report: Committee on Rules received permission
H9338.
to file certain privileged reports by midnight tonight.
Quorum Calls-Votes: One quorum call, five yea-
and-nay votes, and three recorded votes-developed dur-
Page H9276
ing the proceedings of the House today and appear OR
Law Enforcement: House completed all general debate
pages H9261-H9262, H9272, H9273-H9274, H9275,
and began reading for amendment H.R. 13636, to.
H9287, H9298, H9304, H9307.
amend title I (Law Enforcement Assistance) of the
Adjournment: Adjourned at 7:06 p.m.
Omnibus Crime Control and Safe Streets Act of 1968-
but came to no resolution thereon. Proceedings under
Committee Meetings
the 5-minute rule will continue tomorrow.
Pending when the Committee of the Whole rose
NATIONAL FOREST MANAGEMENT ACT
was an amendment that sought to strike out language
Committee on Agriculture: Met for markup of H.R.
prohibiting funds for improving state and local cor-
15069, National Forest Management Act, and will re-
rectional institutions unless such improvements comply
sume tomorrow.
with Administration and State standards.
INTERIOR APPROPRIATIONS
Agreed to:
A series of committee amendments en bloc;
Committee on Appropriations: Subcommittee on Inte-
A series of amendments of a clarifying nature;
rior held a hearing on the National Visitors Center.
An amendment to the committee amendment requir-
ARMED SERVICES MISCELLANY
ing that the civil rights enforcement procedures comply
Committee on Armed Services: Met and ordered re-
with the provisions of the revenue sharing bill as passed
ported favorably to the House the following bills:
by the House;
H.R. 14773 as amended, to authorize cost-of-living
A series of technical amendments; and
adjustments of annuities under the Retired Service-
An amendment which retains the language of pres-
man's Family Protection Plan, to suspend retired-pay
ent law requiring the approval of local governments for
deductions under the Survivor Benefit Plan when there
law enforcement program grants (agreed to by a re-
is no eligible spouse beneficiary, and to reduce the dura-
corded vote of 253 ayes to 133 noes). Earlier, the amend-
tion-of-marriage requirement under the Survivor Bene-
ment was rejected by a division vote of 38 ayes to 57
fit Plan from two years to, one year; and
noes.
H.R. 15136 as amended, to authorize appropriations
Rejected:
for construction of facilities on Guam.
A committee amendment adding language requiring
The Committee also approved reprogramming
that no less than one-third of discretionary funds be
action to provide funding for $15.7 million in abnormal
used for improving the administration of criminal jus-
escalation costs associated with the Economic Price
tice in the courts (rejected by a recorded vote of 173
Adjustment clauses of the FY 1975 A-ro airframe and
ayes to 214 noes);
gun contracts; and
An amendment extending the authorization for three
Realignment of modification funds for the F-14
years (rejected by a recorded vote of 119 ayes to 268
program totalling $24.5 million.
noes);
An amendment authorizing mini-block grants to gen-
SCHOOL LUNCH PROGRAM
eral units of local government (rejected by a division
Committee on Education and Labor: Subcommittee on
vote of 42 ayes to 50 noes);
Elementary, Secondary, and Vocational Education con-
D 1180
CONGRESSIONAL RECORD- DAILY DIGEST
August 31, 1976
tinued oversight hearings on the school lunch program
WILDERNESS LANDS
with testimony from public witnesses.
Committee on Interior and Insular Affairs: Subcom-
Hearings continue tomorrow.
mittee on Public Lands met and approved for full com-
SERVICE CONTRACT AMENDMENTS
mittee action draft of an Omnibus Wilderness bill.
Committee on Education and Labor: Subcommittee on
EXPORT ADMINISTRATION ACT
Labor-Management Relations met and approved for full
Committee on International Relations: Continued
committee action H.R. 15246, to amend the Service
markup of H.R. 7665, to extend the Export Adminis-
Contract Act to ensure that all "service employees" ex-
tration Act of 1969, and will resume tomorrow.
cept bona fide executive, administrative or professional
employees will be covered by the Act.
DETENTE
TETON DAM COLLAPSE
Committee on International Relations: Subcommit-
tee on International Political and Military Affairs held
Committee on Government Operations: Subcommit-
a hearing on Détente: An Overview. Testimony was
tee on Conservation, Energy, and Natural Resources
heard from Helmut Sonnenfeldt, Counselor, Depart-
continued hearings on the Teton Dam collapse. Testi-
ment of State; and Arthur A. Hartman, Assistant Sec-
mony was heard from Bureau of Reclamation Commis-
retary of State for European Affairs.
sioner Stam; Brig. Gen. Drake Wilson, Deputy Director
Hearings continue Thursday, September 2.
of Civil Works, Army Corps of Engineers; and Henry
Eschwege, Director, Resources and Economic Devel-
U.S. INVESTMENT OVERSEAS
opment Division, GAO.
Committee on International Relations: Subcommit-
HOUSE ADMINISTRATION MISCELLANY
tee on International Economic Policy met and ap-
proved for full committee action S. 2839 amended, Inter-
Committee on House Administration: Met and ordered
national Investment Survey Act of 1976.
reported favorably to the House the following
resolutions:
RAIL AMENDMENTS
S. Con. Res. 85, authorizing the printing as a Senate
Committee on Interstate and Foreign Commerce: Began
document of a report by a special consultant to the Ad-
markup of H.R. 14932, Rail Amendments of 1976, and
ministrative Conference of the United States on some
will continue tomorrow.
administrative procedures of the Internal Revenue
Service;
MUNICIPAL SECURITIES FULL
H. Res. 1472, to provide for the expenses of investiga-
DISCLOSURE ACT
tions and studies to be conducted by the Select Com-
Committee on Interstate and Foreign Commerce: Sub-
mittee on Narcotics Abuse and Control; and
committee on Consumer Protection and Finance held
H. Res. 1497 amended, authorizing appointment of a
a hearing on H.R. 15205, Municipal Securities Full Dis-
special counsel to represent the Sergeant at Arms in
closure Act of 1976. Testimony was heard from SEC
the case of Pressler V. Simon, et al.
Commissioner Philip Loomis; Treasury Assistant Sec-
By a vote of II to 7, the Committee tabled H. Con.
retary Robert A. Gerard; and public witnesses.
Res. 48 and 49, to provide for the printing of copies
of the Constitution of the U.S.
FTC RULING ON CONSUMER CLAIMS
CONSULTANT CONTRACTS
Committee on Interstate and Foreign Commerce: Sub-
committee on Consumer Protection and Finance held a
Committee on House Administration: Subcommittee
hearing on Federal Trade Commission ruling ón pres-
on Contracts met and reviewed consultant contracts.
ervation of consumer claims and defenses, Testimony
BOUNDARY CHANGES
was heard from public witnesses.
Committee on Interior and Insular Affairs: Subcom-
COMMITTEE BUSINESS
mittee on Public Lands held hearings on H.R. 3596,
Committee on Interstate and Foreign Commerce: Sub-
boundary changes in the Cibola National Forest in New
committee on Oversight and Inyestigations met and ap-
Mexico; H.R. 14799 and H.R. 14800, boundary changes
proved a report entitled "The Arab Boycott and Amer-
in the World and Mountain Home Tracts in Wyoming;
ican Business."
and private bills. Testimony was heard from Repre-
sentatives Udall, Roncalio, Lujan and McFall; and
PETROLEUM MARKETING PRACTICES
Departments of Interior and Agriculture.
Committee on Interstate and Foreign Commerce: On
Following the hearing, the Subcommittee approved
Monday evening, August 30, Subcommittee on Energy
for full committee action H.R. 3596, H.R. 3818, H.R.
and Power approved for full committee action H.R.
14227, and S. 2511, all private bills.
13000 amended, Petroleum Marketing Practices Act.
August 31, 1976
CONGRESSIONAL RECORD-DAILY DIGEST
D 1181
HABEAS CORPUS
gations and Review met for joint briefing by Depart-
Committee on the Judiciary: Met and ordered reported
ment of Commerce on regulations and program guide-
favorably to the House H.R. 15319 amended, to approve
lines being developed for the administration of the Pub-
in whole or in part, with amendments, certain rules
lic Works Employment Act of 1976.
relating to cases and proceedings under sections 2254
BEER TAX
and 2255 of title 26 of the United States Code.
The committee began but did not complete action
Committee on Rules: Granted a closed rule providing
on H.R. 13157, Victims of Crime Act of 1976.
one hour of general debate on H.R. 3605, to amend sec-
tion 5051 of the Internal Revenue Code of 1954 (relat-
ORGANIC ACT OF GUAM AMENDMENT
ing to the Federal excise tax on beer). Testimony was
Committee on the Judiciary: Subcommittee on Courts,
heard from Répresentatives Pickle, Vigorito, Lundine,
Civil Liberties, and the Administration of Justice met
Nolan, and Clancy.
and approved for full committee action H.R. 4580, with
an amendment in the nature of a substitute.
INTERSTATE HORSERACING ACT
WARM WATER FISH HATCHERY PROGRAM
Committee on Rules: Held a hearing but postponed ac-
Committee on Merchant Marine and Fisheries: Sub-
tion on H.R. 14071, Interstate Horseracing Act of 1976.
committee on Fisheries and Wildlife Conservation and
Testimony was heard from Representatives Rooney, and
Murphy of New York.
the Environment held an oversight hearing on the Fish
and Wildlife Service's warm water fish hatchery pro-
PRESIDENTIAL TRANSITION ACT
gram. Testimony was heard from Lynn A. Greenwalt,
Committee on Rules: Granted an open rule providing
Director, Fish and Wildlife Service; Paul Dembling,
one hour of general debate and waiving section 402(a)
General Counsel, GAO; Jack Crawford, Georgia De-
of P.L. 93-344, the Congressional Budget Act, on H.R.
partment of Natural Resources; and Charles Bowers,
14886, Presidential Transition Act of 1976. Testimony
Director, Division of Fisheries, State of Kentucky.
was heard from Chairman Brooks and Representative
WATER RESOURCES DEVELOPMENT ACT
Horton.
Committee on Public Works and Transportation: Sub-
LEGISLATIVE BRANCH APPROPRIATIONS
committee on Water Resources continued hearings on
the Water Resources Development Act of 1976. Testi-
Committee on Rules: Granted a modified rule provid-
mony was heard from U.S. Coast Guard and Members
ing two hours of general debate; waiving all points
of Congress.
of order against title I of the bill for failure to comply
Hearings continue tomorrow.
with the provisions of clause 2, Rule XXI, and providing
that no amendment shall be in order except amend-
LOCAL SERVICE AIR CARRIER SUBSIDY-
ments recommended by the Committee on Appropri-
ALL-CARGO SERVICE
ations and the amendments printed in the Congressional
Committee on Public Works and Transportation: Sub-
Record of August 31, 1976 by Representative Shipley,
committee on Aviation held hearings on the following
and said amendments shall be in order, clause 2 of
bills:
Rule XXI to the contrary notwithstanding, but shall
H.R. 12349, to require retroactive adjustment of local
not be subject to amendment except amendments rec-
service air carrier subsidy for 1966. Testimony was heard
ommended by the Committee on Appropriations and
from Representative Pickle; Fred Chabot, CAB; Paul L.
pro forma amendments, on H.R. 14238, making appro-
Bradshaw, Ozark Airlines; and Francisco A. Lorenco,
priations for the Legislative Branch for fiscal year 1977.
Texas International Airlines, Inc.; and
Testimony was heard from Representatives Schroeder,
H.R. 14623, to permit CAB to authorize all-cargo
Coughlin, Armstrong, Regula, Edwards, Archer, Bau-
service by exemption pending CAB consideration of an
man and Grassley.
application for initial certification of such service. Tes-
EXCLUSIVE TERRITORIAL FRANCHISE ACT
timony was heard from John Robson, Chairman, CAB;
John W. Barnum, Deputy Secretary of Transportation;
Committee on Rules: Granted an open rule providing
and Frederick W. Smith, Chairman of the Board, Fed-
two hours of general debate; waiving the provisions of
eral Express Corporation.
clause 2(1) (5) (B) of Rule XI and dividing debate
Hearings continue tomorrow.
time between the Committee on Interstate and Foreign
Commerce and the Committee on Judiciary, on H.R.
PUBLIC WORKS EMPLOYMENT ACT
6684, Exclusive Territorial Franchise Act. Testimony
GUIDELINES
was heard from Chairman Rodino and Representatives
Committee on Public Works and Transportation: Sub-
Murphy of New York, McCollister, Flowers, Seiberling
committees on Economic Development, and on Investi-
and Cohen.
D 1182
CONGRESSIONAL RECORD- DAILY DIGEST
August 31, 1976
NATIONAL CEMETERIES
1977; (B) increase in tax credits for employee stock
Committee on Veterans' Affairs: Subcommittee on
ownership plan contributions; (C) greater moving ex-
Cemeteries and Burial Benefits held a hearing on pro-
pense deductions; and (D) liberalize investment tax
posals to establish a national cemetery in Alabama and
credit for movie and T.V. films.
Pennsylvania; and changing criteria for burial in Arling-
ton National Cemetery. Testimony was heard from
COMMITTEE MEETINGS FOR WEDNESDAY,
Representatives Brinkley, Nichols and Edgar; Deputy
SEPTEMBER 1
Assistant Secretary of the Army Ford; and public
witnesses.
(All meetings are open unless otherwise designated)
Senate
Joint Committee Meetings
Committee on Agriculture and Forestry, business meeting,
NUCLEAR PROLIFERATION CONTROL
8 a.m., 324 Russell Office Building.
Committee on Banking, Housing and Urban Affairs, Subcom-
Joint Committee on Atomic Energy: Committee held
mittee on Securities, to resume hearings in connection with its
hearings on S. 377° and H.R. 15273, to provide for more
study of the securities activities of commercial banks, IO a.m.,
efficient and effective control over the proliferation of
5302 Dirksen Office Building.
nuclear explosives, receiving testimony from Robert
Committee on the Judiciary, Subcommittee, to hold hearings
on the nominations of Harry W. Wellford, of Tennessee, to be
A. Fri, Deputy Administrator Energy Research and
United States circuit judge for the sixth circuit; Kenneth K. Hall,
Development Administration, and Director, White
of West Virginia, to be United States circuit judge for the fourth
House Nuclear Policy Review Group; and Marcus
circuit; and John T. Copenhaver, Jr., to be United States District
Rowden, Chairman, Nuclear Regulatory Commission;
Judge for the southern district of West Virginia, 9:30 a.m., 2228
and Myron B. Kratzer, Deputy Assistant Secretary of
Dirksen Office Building.
Committee on Veterans' Affairs, business meeting, to consider
State for Nuclear Energy and Energy Technology
S. 969, the proposed Veterans Education and Employment As-
Affairs.
sistance Act; and S. 3596 and H.R. 14299, to increase the rates of
Committee recessed subject to call.
disability compensation for disabled veterans and rates of de-
pendency and indemnity compensation for their survivors, 9:45
ARTS AND HUMANITIES
a.m., 414 Russell Office Building.
Conferees agreed to file a conference report on the dif-
Committee on Public Works, Subcommittee on Water Re-
sources, to continue markup of proposed legislation on water
ferences between the Senate- and House-passed versions
resource development, 10 a.m., 4200 Dirksen Office Building.
of H.R. 12838, authorizing funds through fiscal year
Committee on Interior and Insular Affairs, Subcommittee on
1980 for programs of the National Foundation on the
Parks and Recreation, to hold oversight hearings on the Presi-
Arts and Humanities.
dent's Bicentennial Land Heritage Program, IO a.m., 3110 Dirk-
sen Office Building.
DEFENSE APPROPRIATIONS
House
Conferees, in closed session, continued to resolve the
Committee on Agriculture, to continue markup of H.R. 15069,
differences between the Senate- and House-passed ver-
National Forest Management Act, 10 a.m., 1301 Longworth
Building.
sions of H.R. 14262, making appropriations for the de-
Committee on Armed Services, Subcommittee on Military
fense establishment for fiscal year 1977, but did not com-
Installations and Facilities, to consider pending real estate proj-
plete action thereon and will meet again tomorrow.
ects, 2 p.m., 2212 Rayburn Building.
Subcommittee on Seapower and Strategic and Critical Ma-
EMERGENCY JOBS PROGRAM
terials, to mark up H.R. 15081, to authorize the disposal of
Conferees continued to resolve the differences between
various materials from the national stockpile and the supple-
the Senate- and House-passed versions of H.R. 12987,
mental stockpile; hold a hearing on the President's request for
authorizing funds through fiscal year 1977 for the pub-
a supplemental fiscal year 1977 authorization for shipbuilding
and conversion, Navy; and reconsider the Subcommittee's prior
lic service jobs program under the Comprehensive Em-
action disapproving the transfer of naval vessels to Ecuador,
ployment and Training Act, but did not complete
IO a.m., 2216 Rayburn Building.
action thereon and will meet again on Thursday, Sep-
Subcommittee on Military Personnel, to continue hearings
tember 9.
on the recently announced plan of the Secretary of the Army
to cope with the Honor Code problem at West Point, 10 a.m.,
TAX REFORM
2118 Rayburn Building.
Conferees continued in an evening session to resolve the
Committee on Banking, Currency and Housing, Subcommit-
differences between the Senate- and House-passed ver-
tee on Economic Stabilization, to hold oversight hearing on the
sions of H.R. 10612, proposed Tax Reform Act of 1976.
Lockheed Aircraft Corp., 9:30 a.m., 2222 Rayburn Building.
Committee on the Budget, to consider Budget Act waiver
On Monday, August 30, the conferees tentatively
(Section 402) on S. 1174, Hazard Reduction Act, IO a.m., 210
agreed to (A) extend some personal tax credits through
Cannon Building.
August 31, 1976
CONGRESSIONAL RECORD- DAILY DIGEST
D 1183
Committee on the District of Columbia, to mark up H.R.
Subcommittee on Criminal Justice, to continue hearings on
15276, Park Police pay comparability; and consider H. Con.
H.R. 14476, Special Prosecutor Act of 1976, 9:30 a.m., 2141
Res. 694, to disapprove the Firearms Control Regulations Act
Rayburn Building.
of 1975, passed by the Council of the District of Columbia, 9:30
Committee on Merchant Marine and Fisheries, Subcommittee
a.m., 1310 Longworth Building.
on Coast Guard and Navigation, to markup H.R. 13585, to
Committee on Education and Labor, Subcommittee on Ete-
amend the Federal Boat Safety Act of 1971; and S. 3050, to
mentary, Secondary, and Vocational Education, to continue
authorize the Secretary of Transportation, when the Coast Guard
oversight hearings on the school lunch programs, 9 a.m., 2175
is not operating as a service in the Navy, to lease for military
Rayburn Building.
purposes structures and their associated real propérty located in
Committee on Government Operations, Subcommittee on
a foreign country, IO a.m., 1334 Longworth Building.
Intergovernmental Relations and Human Resources, to mark up
Committee on Post Office and Civil Service, Subcommittee on
H.R. 14761, to establish an Office of Inspector General in the
Retirement and Employee Benefits, to continue oversight hear-
Department of Health, Education, and Welfare, IO a.m., 2247
ings on physical examinations, 9 a.m., 311 Cannon Building.
Rayburn Building.
Committee on Public Works and Transportation, Subcom-
Committee on Interior and Insular Affairs, to consider pend-
mittee on Water Resources, to continue hearings on the Water
ing legislation, 9:45 a.m., 1324 Longworth Building.
Resources Development Act of 1976, IO a.m., 2167 Rayburn
Committee on International Relations, to continue markup
Building.
of H.R. 7665, to extend the Export Administration Act of 1969,
Subcommittee on Aviation, to continue hearings on H.R.
IO a.m., 2172 Rayburn Building.
12349, to require retroactive adjustment of local service air
Subcommittees on International Political and Military Affairs,
carrier subsidy for 1966; and H.R. 14623, to permit CAB to
and on International Organizations, to hold joint hearings on
authorize all-cargo service by exemption pending CAB con-
the August 18 incident in the Demilitarized Zone in Korea,
sideration of an application for initial certification of such
2 p.m., 2172 Rayburn Building.
service, 9:45 a.m., 2253 Rayburn Building.
Committee on Interstate and Foreign Commerce, to continue
Committee on Science and Technology, Subcommittee on the
markup of H.R. 14932, Rail Amendments of 1976, IO a.m.,
Environment and the Atmosphere, to markup H.R. 14544,
2123 Rayburn Building.
10039 and S. 3383, weather modification legislation, 9 a.m.,
Subcommittee on Communications, to hold hearing on H.R.
2318 Rayburn Building.
15268, to provide just and reasonable rates, terms, and condi-
Committee on Standards of Official Conduct, to consider
tions for the use of certain rights-of-way by persons desiring to
pending business, 4:15 p.m., H-310, Capitol Building.
lease space for wire communications; to be followed by markup
of penalties and forfeiture, and pole attachment legislation,
Joint Committee Meetings
1:30 p.m., 2123 Rayburn Building.
Conferees, on S. 3149, to protect human health and the envi-
Committee on the Judiciary, Subcommittee on Courts, Civil
ronment by requiring testing and necessary use restrictions on
Liberties and the Administration of Justice, to continue markup
certain chemical substances, 1:30 p.m., room S-407, Capitol.
of pending legislation, IO a.m., 2226 Rayburn Building.
Conferees, on H.R. 10339, authorizing the Secretary of Agri-
Subcommittee on Immigration, Citizenship and International
culture to provide information and technical assistance to encour-
Law, to hold hearing on private immigration bills, IO a.m.,
age the direct marketing of farm products from farmer to
2237 Rayburn Building.
consumer, 2 p.m., room S-126, Capitol.
Subcommittee on Administrative Law and Governmental
Conferees, closed, on H.R. 14262, making appropriations for
Relations, to markup H.R. 11315, Foreign Sovereign Immuni-
the defense establishment for fiscal year 1977, 9:30 a.m., room
ties Act of 1975, and private bills, IO a.m., 219 Cannon Building.
H-140, Capitol.
D 1184
CONGRESSIONAL RECORD-DAILY DIGEST
August 31, 1976
Next meeting of the SENATE
Next meeting of the HOUSE OF REPRESENTATIVES
10 a.m., Wednesday, September 1
12 Noon, Wednesday, September 1
Senate Chamber
House Chamber
Program for Wednesday: After one special order
Program for Wednesday: Consideration of H.R.
for a speech and a period for the transaction of routine
14238, Legislative Appropriations for fiscal year 1977
morning business of not to exceed 15 minutes, Senate
(modified closed rule, 2 hours of debate);
will resume consideration of S. 3037, authorizing funds
H.R. 13636, Law Enforcement Assistance Admin-
for fiscal year 1977 for programs under the Water Pol-
istration (conclude consideration);
lution Control Act (two hours on the bill).
H.R. 14886, Presidential Transition Act Amendments
(open rule, I hour of debate); and
H.R. 10498, Clean Air Act Amendments (continue
consideration).
Extensions of Remarks, as inserted in this issue
HOUSE
Hamilton, Lee H., Ind., E4753
Mosher, Charles A., Ohio, E4755
Hannaford, Mark W., Calif., E4750
Murtha, John P., Pa., E4756
Archer, Bill, Tex., E4754
Hansen, George, Idaho, E4749
Nedzi, Lucien N., Mich., E4788
Ashbrook, John M., Ohio, E4772, E4778
Harrington, Michael, Mass., E4756
Paul, Ron, Tex., E4761
Aspin, Les, Wis., E4790
Hungate, William L., Mo., E4763
Rogers, Paul G., Fla., E4759
Biaggi, Mario, N.Y., E4757, E4763
Johnson, Albert W., Pa., E4749, E4769
Rose, Charles, N.C., E4773
Breckinridge, John, Ky., E4785
Kemp, Jack F., N.Y., E4752, E4787
Roush, J. Edward, Ind., E4761
Brown, Clarence J., Ohio, E4747
Keys, Martha, Kans., E4789
Ryan, Leo J., Calif., E4750, E4777
Collins, Cardiss, Ill., E4769
Lujan, Manuel, Jr., N. Mex., E4757, E4768
Santini, Jim, Nev., E4771
Conte, Silvio O., Mass., E4748
McCormack, Mike, Wash., E4777
Scheuer, James H., N.Y., E4763, E4782
Crane, Philip M., III., E4751
McDonald, Larry, Ga., E4751, E4757, E4780
Vanik, Charles A., Ohio, E4754
Dingell, John D., Mich., E4773
Matsunaga, Spark M., Hawaii, E4750
Wiggins, Charles E., Calif., E4755
Downing, Thomas N., Va., E4770
Mezvinsky, Edward, Iowa, E4755
Wolff, Lester L., N.Y., E4748, E4764
Drinan, Robert F., Mass., E4772, E4779
Mikva, Abner J., Ill., E4764
Yates, Sidney R., III., E4787
Esch, Marvin L., Mich., E4747
Moorhead, William S., Pa., E4754, E4779
Young, Andrew, Ga., E4766
Congressional Record
The public proceedings of each House of Congress, as reported
by the Official Reporters thereof, are printed pursuant to direc- -
tions of the Joint Committee on Printing as authorized by
appropriate provisions of Title 44, United States Code, and published for each day that one or both Houses are in session, ex-
cepting very infrequent instances when two or more unusually small consecutive issues are printed at one time. 1 The
Congressional Record will be furnished by mail to subscribers, free of postage, for $3.75 per month, $45 per year, or 25 cents per copy,
payable in advance. Remit check or money order, made payable to the Superintendent of Documents, directly to the Government Printing
Office, Washington, D.C. 20402. 11 Following each session of Congress, the daily Congressional Record is revised, printed, permanently bound
and is sold by the Superintendent of Documents in individual parts or by sets. I With the exception of copyrighted articles, there are no re-
strictions on the republication of material from the Congressional Record.
August 31, 1976
CONGRESSIONAL RECORD- DAILY DIGEST
D 1183
Committee on the District of Columbia, to mark up H.R.
Subcommittee on Criminal Justice, to continue hearings on
15276, Park Police pay comparability; and consider H. Con.
H.R. 14476, Special Prosecutor Act of 1976, 9:30 a.m., 2141
Res. 694, to disapprove the Firearms Control Regulations Act
Rayburn Building.
of 1975, passed by the Council of the District of Columbia, 9:30
Committee on Merchant Marine and Fisheries, Subcommittee
a.m., 1310 Longworth Building.
on Coast Guard and Navigation, to markup H.R. 13585, to
Committee on Education and Labor, Subcommittee on Ete-
amend the Federal Boat Safety Act of 1971; and S. 3050, to
mentary, Secondary, and Vocational Education, to continue
authorize the Secretary of Transportation, when the Coast Guard
oversight hearings on the school lunch programs, 9 a.m., 2175
is not operating as a service in the Navy, to lease for military
Rayburn Building.
purposes structures and their associated real propérty located in
Committee on Government Operations, Subcommittee on
a foreign country, IO a.m., 1334 Longworth Building.
Intergovernmental Relations and Human Resources, to mark up
Committee on Post Office and Civil Service, Subcommittee on
H.R.- 14761, to establish an Office of Inspector General in the
Retirement and Employee Benefits, to continue oversight hear-
Department of Health, Education, and Welfare, IO a.m., 2247
ings on physical examinations, 9 a.m., 311 Cannon Building.
Rayburn Building.
Committee on Public Works and Transportation, Subcom-
Committee on Interior and Insular Affairs, to consider pend-
mittee on Water Resources, to continue hearings on the Water
ing legislation, 9:45 a.m., 1324 Longworth Building.
Resources Development Act of 1976, IO a.m., 2167 Rayburn
Committee on International Relations, to continue markup
Building.
of H.R. 7665, to extend the Export Administration Act of 1969,
Subcommittee on Aviation, to continue hearings on H.R.
10 a.m., 2172 Rayburn Building.
12349, to require retroactive adjustment of local service air
Subcommittees on International Political and Military Affairs,
carrier subsidy for 1966; and H.R. 14623, to permit CAB to
and on International Organizations, to hold joint hearings on
authorize all-cargo service by exemption pending CAB con-
the August 18 incident in the Demilitarized Zone in Korea,
sideration of an application for initial certification of such
2 p.m., 2172 Rayburn Building.
service, 9:45 a.m., 2253 Rayburn Building.
Committee on Interstate and Foreign Commerce, to continue
Committee on Science and Technology, Subcommittee on the
markup of H.R. 14932, Rail Amendments of 1976, IO a.m.,
Environment and the Atmosphere, to markup H.R. 14544,
2123 Rayburn Building.
10039 and S. 3383, weather modification legislation, 9 a.m.,
Subcommittee on Communications, to hold hearing on H.R.
2318 Rayburn Building.
15268, to provide just and reasonable rates, terms, and condi-
Committee on Standards of Official Conduct, to consider
tions for the use of certain rights-of-way by persons desiring to
pending business, 4:15 p.m., H-310, Capitol Building.
lease space for wire communications; to be followed by markup
of penalties and forfeiture, and pole attachment legislation,
Joint Committee Meetings
1:30 p.m., 2123 Rayburn Building.
Conferees, on S. 3149, to protect human health and the envi-
Committee on the Judiciary, Subcommittee on Courts, Civil
ronment by requiring testing and necessary use restrictions on
Liberties and the Administration of Justice, to continue markup
certain chemical substances, 1:30 p.m., room S-407, Capitol.
of pending legislation, IQ a.m., 2226 Rayburn Building.
Conferees, on H.R. 10339, authorizing the Secretary of Agri-
Subcommittee on Immigration, Citizenship and International
culture to provide information and technical assistance to encour-
Law, to hold hearing on private immigration bills, IO a.m.,
age the direct marketing of farm products from farmer to
2237 Rayburn Building.
consumer, 2 p.m., room S-126, Capitol.
Subcommittee on Administrative Law and Governmental
Conferees, closed, on H.R. 14262, making appropriations for
Relations, to markup H.R. 11315, Foreign Sovereign Immuni-
the defense establishment for fiscal year 1977, 9:30 a.m., room
ties Act of 1975, and private bills, IO a.m., 219 Cannon Building.
H-140, Capitol.
[sept. 1976?
H.R.
F532
3-18-76
the
voric-final
summital-study
civil PeNALTI
WIGGINS
(150-223-59)
5Pm
9/3/76
Max: Per Frank Polk (H ouse Judiciary Committee)
Addendum to our discussion re HR 3532 (The Antitrust Bill)
The House Parliamentarian office is preparing to rule
that the motion to accept the Senate amendment is privileged
and does not require a resolution to that Effect from the
Rules Committee.
Consequently, a House motion to concur could come up as
early as next Thursday. A majority vote is all that is
needed to pass and send the bill to the President. No
amendments would be in order since any further House
amendments would be in the third degree.
of
12. R. FORD LIGRE
SERVICES
THE WHITE HOUSE
WASHINGTON
September 18, 1976
MEMORANDUM FOR:
JACK MARSH
JIM LYNN
WILLIAM SEIDMAN
FROM:
PHILIP BUCHEN
T.
Attached is a draft of a proposed Statement of
the President on The Antitrust and Competition
Policy of the Ford Administration. It was
prepared originally at the Department of Justice
and was revised slightly by me.
I suggest that such a statement accompany the
President's action on the new antitrust bill,
just passed by Congress. It could be a part
of his signing or vetoing statement or could
be issued at the same time as such a statement.
Please let me have your comments.
Attachment
Dictate
Dictate
Menday
FORD LIBRA & CREATO
STATEMENT OF THE PRESIDENT
THE ANTITRUST AND COMPETITION POLICY
OF THE FORD ADMINISTRATION
This country has become the economic ideal of the free
world because of its dedication to the free enterprise system.
Full and vigorous .competition has been the watchword of
America's economic progress.
This Administration has long recognized that compe-
tition is the driving force of our economy. Competitive
markets promote efficiency and innovation by rewarding firms
that produce desired products at low costs. In a competitive
industry, inefficient producers are forced to become efficient
or be driven out of business.
Competition is also a mighty stimulus to the development
of new products and manufacturing processes. The free market
system rewards the successful innovator. In today's inter-
national economy, members of a vigorously competitive economic
system enjoy unlimited worldwide opportunities and contribute
significantly to the stability of their domestic economies.
In the United States, promotion of competition is
consistent with our political and social goals. The undue
concentration of economic and political power has tra-
ditionally been seen as a threat to individual freedom.
FORD is LIBRAR GERALD
- 2 -
Under competitive conditions, economic power is fragmented;
no one firm can control prices or supply. Political power
is also decentralized by competition because there is no
need for massive governmental bureaucracies to oversee
business operations.
But perhaps the most compelling justification for a
free market economy is that it best serves the interests
of our citizens. In a freely competitive market, consumers
enjoy freedom of choice from a wide range of products of
all sizes, kinds, and varieties. Consumers, through their
decisions in the marketplace, transmit their preferences
and desires to businessmen who then translate those
preferences into the best products at the lowest prices.
The Federal Government must play an important role
in protecting and advancing the cause of competition.
Through enforcement of the antitrust laws, the
Antitrust Division of the Department of Justice and the
Federal Trade Commission must assure that competitors
do not engage in anticompetitive practices.
ULD R. FORD VIBEARY
-3-
A vigorous antitrust enforcement policy is most
important in deterring price-fixing agreements between
competitors that result in higher costs to consumers.
As we come out of an inflationary period and into a period
of economic growth and expansion, we must assure that the
price mechanism is not artificially manipulated for private
gain.
This Administration has been the first one in forty
years to recognize that there is a second respect in which
the Federal Government vitally affects the state of
competition. Not only must the Federal Government seek
to restrain private anticompetitive conduct, but so, too,
must the Federal Government see to it that the govern-
mental process does not impede free and open competition.
Too often in the past, the Federal Government has
itself been a major source of restraints on competition.
Many of our most vital industries have over the years
been subjected to pervasive regulation. Although regulation
has been imposed in the name of the public interest, there
is a growing awareness that the consumer is often the real
loser.
Too many important managerial decisions are made
today not by the marketplace responding to the forces of
FORD : LIBRARY TOTAL
-4-
supply and demand but by the bureaucrat. The innovative
and creative forces of major industries are suffocated
by governmental regulation. In many instances a businessman
cannot raise or lower prices, enter or leave markets,
provide or terminate services without the prior approval
of a Federal regulatory body.
This is not the economic system that made this country
great. Government regulation is not an effective substitute
for vigorous competition in the marketplace.
To be sure, in some instances governmental regulation
may well protect and advance the public interest. But the
time has come to recognize that many existing regulatory
controls were imposed during uniquely transitory economic
periods that bear no relation to today's economic conditions.
We must repeal or modify those controls that suppress
rather than support competition.
The Administration's competition policy has proceeded
along those very lines. We have set in motion a far-
reaching regulatory reform program. This program has been
accompanied by a policy of vigorous antitrust enforcement
to implement our commitment to competition.
&
FORD
LIBRAR
- 5 -
In the last two years, the antitrust laws have been
vigorously enforced by strengthened antitrust enforcement
agencies. The resources for the Antitrust Division and
the Federal Trade Commission's Bureau of Competition have
been increased by over 50 percent since Fiscal Year 1975.
For the Antitrust Division, this represented the first
real manpower increases since 1950.
The Antitrust Division's crackdown on price fixing
resulted in indictment of 183 individuals during this
period, a figure equalled only once in the 86 years
since enactment of the Sherman Act. The fact that the
Division presently has pending more grand jury investi-
gations than ever in history proves these efforts are
not slackening.
To preserve a competitive market structure by
preventing competitive mergers and acquisitions, the
Antitrust Division is devoting substantial resources
to merger investigations. At the same time, the
Division is litigating large and complex anti-monopoly
cases in two of our most important industries. Cases
FORD
have also been filed involving such anticompetitive
restraints as allocation of customers and markets
which interfere with the free interaction of competitive
forces.
- 6 -
The cause of vigorous antitrust enforcement was
measurably advanced when I signed the Antitrust
Procedures and Penalties Act of 1974, which made
violation of the Sherman Act a felony punishable by up
to three years' imprisonment of individuals and a
corporate fine of up to $1 million.
I also signed legislation repealing Fair Trade
enabling legislation. This action alone, according to
various estimates, will save consumers $2 billion
annually.
Two regulatory reform proposals I have signed -- the
Securities Act Amendments of 1975 and the Railroad
Revitalization and Regulatory Reform Act inject strong
dosages of competition into industries that had long
rested in the shade of Federal economic regulation.
The Administration has also sponsored important
legislative initiatives to reduce regulation of other
modes of transportation and the regulation of financial
institutions. An important element of the regulatory
reform proposals has been the narrowing of legislative
antitrust immunities which had been granted to industry
rate bureaus and which permitted these groups to restrain
i
competition under official government sanction. Congress
110
FORD
has not yet acted on these proposals.
LIBRARY
- 7 -
The Administration also has underway a broad in-
depth review of many other legislative immunities to
the antitrust laws, to eliminate those immunities that
are not truly justified. All industries and groups,
however regulated and by whom, should be subject to
the interplay of competitive forces to the maximum
extent feasible.
A full measure of the Administration's commitment
to competition is its proposed Agenda for Government
Reform Act that would include a comprehensive,
disciplined look at ways of restoring competition in
the economy. This would require in-depth consideration
of the full range of Federal regulatory activities in
a programmatic manner that would allow for an orderly
transition to a more competitive environment.
This competition policy, which includes regulatory
reform and invigorated antitrust enforcement, will
protect the businessman who desires to be competitive
from both government regulators and anti-competitive
competitors. In turn, the American consumers will
benefit from full and open competition within the
business community.
:
FORD
SEP SO 1976
THE WHITE HOUSE
WASHINGTON
DATE: Sept. 30, 1976
TO:
JACK MARSH
FROM: JIM CAVANAUGH
SUBJ: LEAA
FYI X
ACTION
FORD i LIBRARY
THE WHITE HOUSE
WASHINGTON
September 30, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
JIM CAVANAUGHT
SUBJECT:
LEAA
The conference report on S. 2212, which is an
authorization bill for LEAA, cleared conference
a few days ago. The conference report has not been
taken up by either House.
The bill does contain a $10 million authorization
for state attorney generals to improve and
upgrade their offices and to engage in parens
patriae activities.
GERALD FORD
THE WHITE HOUSE
WASHINGTON
December 7, 1976
MEMORANDUM FOR:
PHILIP BUCHEN
JAMES CANNON
DICK CHENEY
JACK MARSH
BILL SEIDMAN
FROM:
ED SCHMULTS
of
The Department of Justice wishes to release a report
on the Robinson-Patman Act prepared by the Antitrust
Division. The report reflects the views of the
Antitrust Division and would not be expressing a
formal position of the Administration.
Attached is an executive summary of the Robinson-
Patman Act report. The report concludes that the
Act creates serious anti-competitive effects and
should, therefore, be repealed. In the alternative,
fundamental amendments are suggested. If you wish
to see a full copy of the report, which is about
two inches thick, please give me a call.
Attached also is a copy of a memorandum from the
Deputy Assistant Attorney General in the Antitrust
Division outlining the manner of the proposed release
of the report.
If you feel strongly that the Department of Justice
should not release the report at this time, please
give me a call before the close of business on
December 10.
Attachments
FORD LIBRARY i
EXECUTIVE SUMMARY OF DEPARTMENT OF JUSTICE
REPORT ON THE ROBINSON-PATMAN ACT
Background
Last year the President indicated in several speeches
his strong desire for consideration of reform or repeal of
the Robinson-Patman Act.
Following those Presidential statements, the Department
of Justice and other concerned agencies (including Commerce,
COWPS, SBA and OMB) under the direction of the Domestic Council
Review Group (DCRG) considered various approaches to reform of
the Robinson-Patman Act. An initial analytic paper was pro-
duced by the Antitrust Division on the Act, together with two
draft proposals for statutory reform. These were circulated
within the Administration in July, 1975. These materials were
then made available to the House and Senate Judiciary-Com-
mittees looking toward possible congressional-consideration of
Robinson-Patman Act reform.
In addition, in August of 1975, a meeting of DCRG members
with representatives of various small business interests was
held at the White House to discuss possible reform proposals.
Discussions with the staffs of the Judiciary Committees
indicated that, because of the crowded legislative agenda of
both committees, hearings on any Administration proposals
for repeal or reform of the Robinson-Patman Act were unlikely
during the Second Session of the 94th Congress. It was further
suggested that additional public education as to the economic
impact of the Act would be helpful prior to congressional con-
sideration of any reform legislation
In the interim, an ad hoc committee of the House Committee=
on Small Business held a series of hearings on the Robinson-
Patman Act. At these hearings a number of congressional and
small business supporters of the Act testified and opposed any
change in the Act. In addition, the FTC at the hearings was
urged to undertake more vigorous enforcement of the Act and to
devote increased resources to this effort. In this setting,
the DCRG decided that the wisest course was for it to hold a
series of public hearings on the economic impact of the
Robinson-Patman Act.
FORD
LIBRA
These hearings were held on December 8, 9 and 10.
Testimony was taken from over twenty witnesses including
members of the academic community, representatives of
small business associations and other businessmen, as
well as practicing attorneys. Testimony was also taken
from the Assistant Attorney General for Antitrust, Thomas
E. Kauper, and former Assistant Attorney General, Donald
F. Turner.
Following the conclusion of these hearings, the Antitrust
Division was asked to prepare a report on the Robinson-Patman
Act based on the record of the hearings and other available
evidence. The Report summarized here represents the culmina-
tion of those efforts. It should be noted that the Report
represents the views solely of the Antitrust Division and
does not express the position of the Administration.
Summary of the Report
The Report arrives at several important conclusions about
the impact of the Robinson-Patman Act. First, the Act creates
serious anticompetitive effects by deterring price flexibility,
and indeed fostering price rigidity if not price fixing;
second, the Act fosters major inefficiencies in distribution
at great cost to consumers; third, the Act fails to achieve
any significant antitrust or procompetitive objectives; finally,
the Act represents a false and illusory hope for small busi-
nesses because in the long run it fails to achieve the pro-
tectionist advantages which it promises.
On the basis of these conclusions, the Antitrust Division
recommends that the Robinson-Patman Act be repealed. In our
view, the costs of the Act far outweigh any discernible benefits.-
However, it is recognized that others believe that some price
discrimination statute is needed Therefore, an alternative
reform recommendation has been advanced which in our judgment
would produce less adverse impact on the economy than the present
Act.
The reform proposal has basically four elements. First, it
is proposed that enforcement of the new price discrimination
statute be left solely to the FTC rather than private plaintiffs.
The FTC as a public agency would of course be concerned about
a proper application of the Act. The elimination of private
plaintiffs would remove the current ability of private business
firms to use the threat of suit and treble damage exposure to
2
FORD
blackmail competitors into withdrawing price reductions. A
less far reaching alternative would be to eliminate the
present treble damage provisions for private plaintiffs.
The punitive effects of these treble damage provisions clearly
deter legitimate price competition.
Second, the Report recommends that the offense of
price discrimination be narrowed to avoid the present whole-
sale interference in legitimate price competition. This
narrowing would be accomplished first by placing the burden
of proof on the plaintiff to show that a price discrimination
was not cost justified, and second, by limiting those circum-
stances in which adverse competitive injury may be inferred
to instances of systematic discrimination, or the charging of
prices below marginal costs. The current standard, which
permits a finding of liability for sporadic discrimination
or the charging of prices below fully-allocated costs
inherently inhibits a significant number of procompetitive
price reductions.
Third, the report recommends that the defenses to a
charge of price discrimination reflect business realities.
Thus, businessmen should be able to justify discrimination
on the basis of reasonably anticipated future costs according
to flexible groupings of customers. Similarly, businessmen
should not be required to go through unrealistic and potentially
anticompetitive verification procedures to qualify for the
meeting competition defense.
Finally, the report recommends that the Act's present
flat prohibition against discounts in lieu of brokerage and
"nonproportional" promotional allowances be eliminated.
Since, at worst these practices can only be disguised price
discriminations, it is recommended that they be evaluated
under the Act's more general provisions, requiring a showing
of competitive injury and permitting the interposition of
basic defenses.
Of course, the basic proposal is for repeal of the
Act, reflecting the report's finding that the implementation
of a price discrimination statute based on faulty economic
assumptions necessarily impedes the competitive process to
the great economic detriment of consumers.
3
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LIBRA
Robinson-Patman Creates Serious
Anticompetitive Effects
The Robinson-Patman Act is a statute of broad applicability,
governing the prices which can be charged for most commodities
and sales among businesses, including nearly all products
which are to be resold by merchants. While the statute is
intended to prevent the abuse of purchasing power by large
buyers, the actual effect of the statute is to discourage
many procompetitive price reductions.
Under Robinson-Patman, the Federal Trade Commission in
an enforcement action, or a competing business firm in a
treble damage action, can quite easily establish a prima
facie case of violation. In most instances, the
complainant need only show that one of his competitors was
able to obtain a: lower price for a. product, and that such a
discount was sufficient to affect the resale price for that
item. - Once such a showing is made, the firm granting the
discount must prove that the lower. price is justified by
some cost saving in supplying the product to the favored
customer, or that the lower price is necessary to meet-a
lower price of a competing supplier. These defenses are
difficult to use. The cost-justification defense requires
detailed accounting studies, utilizing procedures which are
not part of normal accounting practice, and excluding certain
cost savings which a prudent businessman would take into
consideration. Consequently, a businessman can never know
until his case is finally adjudicated whether his cost-
justification defense will be successful. Similarly, in
order to defend a price cut on the grounds of meeting competition,
the businessman cannot simply rely on a statement from his
customer that a lower price has been offered Rather he
must undertake affirmative action, such as checking invoices
or price quotes, or actually calling his competitor: to
verify the bid, before a "matching" discount can be given.
Other provisions of the Act are even more restrictive,
prohibiting certain payments in lieu of brokerage and promotional
allowances regardless of their effects on competition or
cost justification.
As a consequence of this overreach of the Robinson-
Patman Act, the prudent businessman wishing to lower a price
to a particular customer must assume that a competitor or
the Federal Trade Commission will be able to successfully
4
FORD
challenge that price cut and that his ability to defend such
a cut is highly uncertain. Rather than undergo the expense
of litigation, pre-trial discovery of a firm's proprietary
cost and price data, and the possibility of costly damages
or injunctive relief, the cautious businessman will simply
decide not to cut prices.
Robinson-Patman thus promotes pricing inflexibility.
Unfortunately, such a result serves to reinforce high prices
in oligopolistic manufacturing industries. In industries
where there are few sellers, list prices tend to remain
sticky and the only way high prices will come down is
through the granting of selective discounts. These discounts
over time erode the industry's high price structure leading
to the establishment of list prices at a lower level. By
requiring that price cuts be an all or nothing affair,
Robinson-Patman serves to ensure that prices will remain
high oligopolists know it is not in their best interests
to cut list prices across-the-board except in times of very
weak demand
The anticompetitive effect of Robinson-Patman is
compounded by the fact that the meeting competition defense
serves to encourage discussions about prices among compet-
itors, and even price fixing agreements. While the defense
does not require that a firm check directly with a competitor
before meeting his price, courts have stated that if a
businessman does discuss prices for the purpose of satis-
fying Robinson-Patman, he can be exonerated of what would
otherwise be a violation of the Sherman Act. Once such
discussions begin, actual price fixing arrangements may
result.
Finally, restrictions on price cuts to particular
customers or geographic areas serve to inhibit businesses
from engaging in promotional pricing practices to gain new
customers. To the extent that such promotional prices are
necessary to enter a market, the Act serves to insulate the
entrenched business firms from new competition.
In addition to Robinson-Patman's protection of high
prices, the Act also leads to higher costs for doing
business. Various provisions of the Act serve to protect
the existence of brokers and middlemen because the Act makes
it difficult for businessmen to restructure their distribution
systems to meet the needs of their various customers on an
5
FORD
individual basis, Other restrictions on promotional allowances
also may require businesses to engage in valueless promotional
programs, again because of the inability to tailor such efforts
to the realities of the marketplace. Lastly, Robinson-Patman
leads to added costs when businessmen engage in product differenti-
ation strategies to lawfully avoid the restrictions of the Act.
In light of the legislative history of Robinson-Patman,
Congressional passage of a statute having such effects becomes
understandable. The Robinson-Patman Act was a product of two
historical occurrences. The first was the Depression. During
the early 1930s, the severe deflation, high unemployment, and
increased volume of business bankruptcies led to the general
belief that competition was not necessarily in the public
interest because it led to prices which were destructively low.
Through the NRA Codes of Fair Competition, the minimum rate
provisions of the Motor Carrier and Civil Aeronautics Acts,
and through Robinson-Patman, Congress sought to stabilize or
actually enhance, price levels At about the same time
a
revolution was occurring in the distribution sector The
growth of chain stores in the 1920s led to much concern among
wholesalers that absorption of the wholesaling function by
chains would force them out of business Similarly, it was
feared that the growth of chains would also mean a decline
in the number of independent retailers with whom they did
business, a fear which the retailers soon adopted. Responding
to pressures from these businessmen, state legislatures passed
chain store taxes and fair trade laws, and the Congress passed
the fair trade enabling amendment to the Sherman Act--and in
1936 passed Robinson-Patman.
Because of the understandable congressional desire to
do something about the adverse economic effects of the
Depression, and to do something to allay the fears of inde
pendent wholesalers and retailers, it passed the Robinson-
Patman Act without thoroughly understanding the economic assump-
tions and long-run economic consequences implicit in such a
statute. Thus, we find upon examination that Robinson-Patman's
basic assumptions are invalid. Today, prices should be lower,
not higher. The granting of discounts is not inherently unfair;
it is a necessary part of the dynamics of bringing down high
oligopoly prices. Price differences do not normally reflect
only differences in costs; they result from the interaction
of both supply (cost[ and demand. Lower prices to some do
not mean higher prices to others, high prices to certain
6
GERALD A. FORD
customers indicate the presence of market power on the seller's
side and lower prices may represent a transfer of oligopoly
profits from manufacturers to consumers.
The Robinson-Patman Act Fails to Achieve Any Significant
Antitrust Goals
Robinson-Patman is claimed to be an appropriate supplement
to the other antitrust laws as a means of catching potentially
anticompetitive situations in their "incipiency" by preventing
the use of a market advantage gained through price discrim-
ination to lessen the number of competitors and decrease
competition. Unlike Section 7 of the Clayton Act which covers
structural changes caused by mergers, the conclusion that
price discrimination will have anticompetitive effects relies
upon; a: series speculative and untested inferences. It must
be assumed that if one manufacturer is permitted to discriminate
in price to a retailer, the effect will necessarily be to force
a disfavored businessman from the marketplace; that such a
situation would affect many other similarly situated business-
men; and that the number- of businessmen so eliminated would be
sufficient to seriously reduce competition in the market. The
evidence shows, however, that such a chain of events just is
not likely in the case of most price discriminations. Yet,
these inferences are permitted in order that the statute may
be efficiently applied to the billions of pricing transactions
in the economy. Thus, the Act virtually presumes that any
price discrimination will have an anticompetitive effect when
the more likely truth is that the discrimination is procompetitive.
Robinson-Patman is, in fact, a regulatory statute, not
an antitrust law. Those administering it seek to protect
businesses regardless of their relative efficiencies, and
regardless of varying demand characteristics- of the markets
they serve. As such, the effect of the Act is strikingly
similar to that of the other regulatory statutes which
empower agencies to set minimum prices. Also, the Act compels
businessmen to seek legal advice before making pricing decisions,
and may require businessmen to seek advice from the Federal Trade
Commission before changing a marketing practice.
For all of this, Robinson-Patman provides no demonstrable
antitrust benefits. Proponents argue that without Robinson-
Patman, any immediate increase in competition and lowering
7
LIBRARY BERALD ? FORD
of prices would be outweighed by the likelihood that markets
would become increasingly concentrated and prices would
rise. In order for that eventuality to occur, though, it
would be necessary that a discrimination be so substantial
as to force a large number of businesses out of a market,
that prices thereafter would rise to a level higher than
that charged before and that these higher prices would be
maintained for a long enough time to outweigh the benefit of
the initial price reductions. No evidence of any such
instance has been demonstrated, while testimony to the
contrary was heard by the Review Group. Likewise, studies
conducted by the Federal Trade Commission of its own enforce-
ment orders have not demonstrated that its actions had any
appreciable effect in improving competition. Rather, one
study found such orders to have no effect, and its authors
doubted that price discrimination and increases in concentration
were related.
Genuinely predatory practices, like below-marginal-cost
pricing can be dealt with under the Sherman Act Likewise,
small businessmen can counteract the buying power of larger
firms through-the formation of cooperative wholesaling
operations: Indeed, testimony was. heard from one Review
Group witness that his cooperative was so successful in
countering the buying power of the chains, that one national
food chain joined his group.
Robinson-Patman Provides a False Promise to Small Business
Perhaps the greatest irony of Robinson-Patman is that
it does not protect small businesses as a class. Distribution
is a dynamic sector of the economy. In order to remain
successful, businessmen must deal with changing population
and income characteristics, changing lifestyles, changing
products, changing ways of doing business, and competition
from new shopping locations. Moreover, businessmen must
contend with competition from those who, though doing
business in the same manner and in the same area, neverthe-
less do so in ways more responsive to the desires of the
buying public. In such an environment, it is simply not
the case that the ability of one competitor to get a
somewhat lower price--on merchandise of like grade and
quality, which discount is not cost-justified and is not
8
FORD LIBRA
given to meet competition--plays any significant role in
determining the success or failure of small business as a
class.
The fact is that large and small businesses frequently
do not engage in precisely the same selling function. Small
businesses tend to provide higher price and higher service
options, while larger businesses often utilize a lower
price, lower service, mass marketing approach. The
determinant of the success or failure of a given business in
such a situation is not the cost of goods purchased, it is
consumer preference for the price/quality/service mix of
the large or small business. If a business satisfies its
customers, it will survive, if it does not, it will exit
the market, and no statute can--or should--prevent this.
Not surprisingly, the evidence available to the Review
Group does not demonstrate any effect of Robinson-Patman on
the viability of small businesses as a group. A comparison
between the position of small businesses--retailers:having
only one location- in the United States with Robinson-Patman
and in Canada without it, shows that the percentage of
stores attributable to small business is almost identical in
both countries. In Canada, without an effective price
discrimination law, small business actually has a higher
portion of sales than does the United States.
Fair Trade laws were more protective of small business
than is the Robinson-Patman Act. Yet, Congress recently
found in repealing the Fair Trade enabling statute that
Fair Trade simply did not protect small business.
Thus, for all its cost, Robinson-Patman gives only
illusory protection to the small businessman. Most small
businessmen work, very hard, to survive, and will support
any statute which offers the promise of protection. But
Robinson-Patman only offers a false promise, at a great
cost to our society as a whole.
SERIAL FORD LIBRARA
UNITED STATES DEPARTMENT OF JUSTICE
WASHINGTON, D.C. 20530
Address Reply to the
Division Indicated
and Refer to Initials and Number
November 30, 1976
MEMORANDUM FOR: EDWARD C. SCHMULTS
DEPUTY COUNSEL TO THE PRESIDENT
STANLEY MORRIS
DEPUTY ASSOCIATE DIRECTOR
FOR MANAGEMENT
OFFICE OF MANAGEMENT AND BUDGET
FROM:
JONATHAN C. ROSE
DEPUTY ASSISTANT ATTORNEY GENERAL
ANTITRUST DIVISION
SUBJECT:
ROBINSON-PATMAN REPORT
Enclosed for your review is a copy of the Robinson-
Patman Report which you have indicated should be released
after you have had a chance to look at it. Upon reflection,
we are inclined to think that this document should be issued
as a Department of Justice Report. The reason for this
rests upon our expectation about its ultimate utility: we
see the Report having its primary impact on courts and the
FTC considering Robinson-Patman issues. In this regard,
we think it would have its greatest impact if it were
viewed like the 1955 Attorney General's Report on the
Antitrust Laws, i.e., as a non-political evaluation of an
antitrust law.
You will note the Report contains various typographical
errors which we estimate could be cleaned up in a matter of
hours.
ce: ( mems & Report) -
Stanley marris (OMB)
FORD is 076830 LIBRARY
MYOLUTION /
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1976