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more. We don't want the kind of situation in which the business enterprise can make its greatest profit by deliberately choosing smaller volume at higher costs and still higher monopolistic prices. Competition makes the difference.

(4) We want the kind of situation in which the outstandingly profitable company is operating at high percentage of capacity. We don't want the kind of situation in which the outstandingly profitable company's unused capacity is itself deterring somebody else from adding new capacity. Competition makes the difference.

In other words, to find monopolies we must look for the inadequately competitive spots in business. We shall do best to start off looking for the spots in which competition may seem to be doing the poorest job of giving us what we want of it.

Coming at the problem in this way, our best clues are then to be found in comparative progressiveness, comparative behavior of costprice relationships, comparative changes in profits and volume, comparative behavior of profits, and percent of capacity utilized.

The spots that look suspicious, when viewed in those terms, deserve to have their competitiveness subjected to thoroughgoing investigation and study. The aim should be to determine what is back of any suspicious appearance of comparative unprogressiveness, widening profit margins, and the other conditions already mentioned.

Whether inadequacy of competition shows up depends on a thorough and truly comprehensive analysis of the actual range of customer alternatives.

As I said before, what really counts may be summed up in two questions that deserve repeating:

1. How much business is the firm in position to lose to its competitors in its own industry or any other competing one?

2. Could it afford to lose that volume and stay in business? Here are four criteria for spotting inadequate competition:

Which companies are actually so free from competitive pressure that any of them operates in such a way

1. That it has no interest in new and better processes and products? 2. That it shows no disposition to work for lower costs and selling prices?

3. That it can maintain profits without fighting to maintain volume? 4. That it does not bring unused capacity into use whenever sales revenue can be increased enough to cover the cost of doing so?

If and when such cases can be brought to light, the Chamber of Commerce of the United States stands ready to support any properly corrective remedies.

In the present state of our knowledge, however, we are inclined to accept the view of the distinguished authority in this field who has stated on July 27 before your committee, sir, and I quote:

Much has been said about the adequacy of the present antitrust laws to cope with the concentration problem. I find myself in disagreement with those who

suggest that the present laws are inadequate.

As the members of this committee know, the man I quote is Mr. Herbert A. Bergson, Assistant Attorney General in Charge of the Antitrust Division.

Thank you for listening to this statement.

96347-50-pt. 2B

(Appendix A and appendix B referred to follow :)

APPENDIX A

AMERICAN COMPETITIVE ENTERPRISE SYSTEM

(Adopted 1949)

The Chamber of Commerce of the United States of America is wholeheartedly committed to private enterprise in preference to Government enterprise, to free enterprise in preference to controlled enterprise, and to competitive enterprise in preference to monopolistic enterprise.

The freedom of enterprise means more than freedom of private profit-seeking. It means individual freedom of enterprising people, whether as consumers or producers, jobholders or job-makers, tool users or tool owners. Individual opportunity is an open road for everyone.

In America today enterprise is more solidly in private hands, here it is freer, and here it is more truly competitive, than in other lands. And to this, we believe, is due the superb vitality which has enabled our Nation to perform the American miracle of production over the years.

The basis of private enterprise is the right of the citizen, as an individual, or jointly with others, to set up in business for himself-to venture his personal efforts and capital; to own, use, and risk the mechanical means of production. The reward of success is profit, and the penalty of failure is the loss of what has been ventured. Nothing else than this can provide the incentive to that initiative and efficiency upon which economic progress is built. The processes of exploration, research, invention, and experiment are all characteristic of free private enterprise.

And without such economic freedom, without substantial freedom of the individual to seek his living where he can find it, and to venture his means where profit seems likely, and to be obliged to no man for this-without these it is pure delusion to imagine that political freedom, even if it exists, can long endure.

We do not, therefore, accept the necessity of Government devoting its resources to or engaging in business enterprise; the resources of Government are but the resources of the citizens, and in this area its activity is inherently competitive with theirs.

Government cannot create wealth apart from the wealth of the governed, or provide for the individual needs of its citizens as well as these citizens can themselves provide. Government can best serve by encouraging maximum opportunity for the individual. In the last analysis a reliable basis of security for the individual, commensurate with our American standard of living, can be provided only by the individual enterprise, energy, and productivity of the people themselves.

The Chamber of Commerce of the United States joins with all those who seek to maintain and to foster the American competitive enterprise system's principles of economic self-government, against any and all proposals leading directly or indirectly toward any form of government-control economy.

APPENDIX B

In evidence of the technological changes and substitute materials becoming available, the following items, selected from thousands which might be mentioned, are worth noting:

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Older item
Steel-conduit and bushings.

Porcelain lamp receptacles_‒‒‒

Aluminum parting boards and patterns for metal casting.

Metal (steel or aluminum) truck and trailer floors and walls; airplane flooring.

Substitute or replacement item

Now molded of phenolic plastics where National Electric Code-1947-requires use of insulated bushings.

Molded of phenolic and given a deadwhite vinyl resin coating to produce a lower cost, but superior product.

Densified wood parting boards and patterns are considerably lower in cost, produced in a fraction of the time, and much longer-lived. Paper-based laminates more than serve as a replacement. Also, the honeycomb laminated structure will revise construction methods for housing, transportation equipment, and furniture.

Metal toys and playthings---- A dominant trend to plastics-polystyrene, vinyls, and polyethylene, among others. Vinylite and polyethylene replaced rubber.

Wire insulation__.

Raincoats, shower curtains, Vinylite film gives improved service

etc

Filter cloths_

Linoleum

Protective coatings-
Records

Automotive-molded and ex-
truded--

Brick for building construction.

Leather for luggage, shoes,
upholstery, etc.

Naphtha in dry-cleaning fluids.
Cotton in tire fabric__‒‒‒
Cork, asbestos, etc., for thermal
insulation.

Refrigerants such as ammonia,
SO, and CO2.

Metals for cooking utensils and
for corrosion resistant indus-
trial piping.
Natural waxes_
Lard____.

Lime-sulfur, pyrethrum, etc----
Tin plate in cans, such as
beer cans.
Quinine-----
Soap---

Opium compounds_.

Petroleum lubricants for low
temperature work.

Natural resins in paints, and
lacquers, and animal glue
and casein in adhesives.
Natural rubber___.
Organic nitrogen such as tank-
age for fertilizer.

Springs, hair, etc., in seat
cushions and mattresses.
Wax water repellents for fab-
rics.

White lead in paints----Glycerin, made from saponification of fats and oils. Methanol, from the distillation of wood.

cotton.

Vinyon fibers.

Vinylite flooring in place of linseed oil.
Now plastic base for severe service.
Vinylite in place of shellac.
Vinylite in place of rubber.

over

[blocks in formation]

Older item

Nitric acid, from Chilean nitrate and the ammonia from

coal distillation.

Substitute or replacement item

From oxidation of ammonia, the ammonia being synthesized from nitrogen and hydrogen.

Natural or fermentation alco- Synthetic alcohol from ethylene. hol.

Natural indigo and alizarine in dyestuffs.

Natural musk as a perfume "fixative."

Vanilla extracted from natural
bean.

Natural rubies and sapphires_
Aluminum (for certain uses)
Tungsten and other steel-hard-
ening metals.

Industrial diamonds in drill
bits.

Building stone, brick, and tile.
Petroleum products----

Wood house siding--

Synthetic indigo and alizarine.

Synthetic musk.

Synthetic vanillin.

Synthetic stones.
Magnesium, titanium.
Molybdenum.

Tungsten carbide.

Reinforced concrete.

Synthetic liquid fuels from oil shale, coal, gas, lignite (future).

Lustron enameled steel, and aluminum.

Wood sash and window frames. Steel and aluminum.

The CHAIRMAN. Mr. Steinkraus, I think I would like to read at this point something in connection with what Mr. Bergson said before this committee. You have quoted a portion of his statement.

I would like to have the complete statement placed in the record. Your quotation appeared on page 373.

Mr. STEINKRAUS. 373.

The CHAIRMAN. Page 373 of the hearings; and on page 377 he said the following:

I say the antitrust laws are adequate to cope with these particular evils— namely, the monopoly situation-whether it results from the individual monopoly or the oligopoly or where a monopoly power exists, and by monopoly power I mean the power to control prices and production without taking into account the normal flows of supply and demand and so forth.

I think they are adequate to cope with that situation. They are adequate to cope with the situation that falls short of monopoly power where the concentration is being achieved as a result of illegal restraints of trade.

Now, I do not think they do cope with or have anything to do with the situation where you have a concentration of economic power which has not yet reached the point of monopoly power, but which has developed in the way that does not include violations of the antitrust laws.

Mr. Steinkraus, you have made a very splendid statement, and while I have not conferred with my colleagues, I am sure that they will agree it is a very comprehensive and very constructive statement. I will say for myself that it is one of the best that we have heard from those who have sat on your side of the table.

Mr. STEINKRAUS. We very much appreciate that, Mr. Chairman. We most sincerely tried to make a useful contribution on this very complicated problem. We have had economists studying this matter, and we have had many interviews and conferences over a period of 4 months in our efforts to make a useful contribution. I very much. appreciate your remarks.

The CHAIRMAN. I would like to defer to my colleagues on the committee for questions, and I will ask some questions subsequently. Mr. BRYSON. Mr. Steinkraus, I am sorry that I was interrupted by the telephone, but on page 7 at the top of the page at the second line,

do we take it that it is your belief that monopolies may exist not only in business but in labor as well?

Mr. STEINKRAUS. We believe that monopoly can exist in business or in labor or in government.

We believe there is some monopoly existing in labor right now, and there is a fundamental difference between monopoly in labor and monopoly in business.

Mr. BRYSON. Would you care to elaborate on your views with respect to that particular subject?

Mr. STEINKRAUS. Business monopolies, at worst, can only control the output and the prices. The public always has the power of veto by refusing to buy the product. Labor monopolies have control over the output and the public welfare; and the public has no veto power over the actions of labor leaders at the present time.

On Saturday we had a board of directors' meeting, at which this problem was discussed and at which the following resolution was unanimously approved:

The Chamber of Commerce believes that recent Nation-wide coal and steel strikes did serious damage to our economy. While the steel strike has been settled, the coal strike has only been postponed. Further peril to the national health, safety, and economy can only be prevented by amending Federal laws to prohibit monopoly by labor organizations. The right to strike should stop short of the right to make war on the public welfare. Until such law against labor monopoly can be had this great Nation can function only at the will and pleasure of powerful labor leaders. This deplorable situation demands immediate correction.

The Chamber of Commerce of the United States therefore strongly urges the Congress to amend the antitrust laws to make them applicable to labor organizations to the extent necessary to effect a ban on monopolistic practices.

The CHAIRMAN. Mr. Steinkraus, would you state that the activity of men and women who labor is like a commodity?

Mr. STEINKRAUS. No, I would not, sir.

The CHAIRMAN. They are quite different, are they not?

Mr. STEINKRAUS. Yes, sir.

The CHAIRMAN. And they must be treated differently?
Mr. STEIN KRAUS. That is right.

The CHAIRMAN. Would you say that human endeavor is the same as ships or shoes or sealing wax?

Mr. STEINKRAUS. No, sir.

The CHAIRMAN. Therefore there must be a different approach to both?

Mr. STEINKRAUS. You are absolutely right, and you know how I feel

about that.

The CHAIRMAN. Yes; I know your record, and your treatment with reference to men and women who work at your plant in Bridgeport, and I know it is an admirable one.

Mr. STEINKRAUS. Thank you.

I feel that where the difference in thinking comes in is between what is good for the workers and what the labor leaders may find it politic to do. I think the two are sometimes irreconcilable.

I think the best interests of the workers are sometimes not served by the actions of their own leaders, because power politics comes into the picture, or competition between various leaders in labor.

The CHAIRMAN. You see, if the history of relations between the employer and the employee or the employer and the employed were

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