Document: 374 U.S. 321 83 S.Ct. 1715 10 L.Ed.2d 915 UNITED STATES, Appellant,v.The PHILADELPHIA NATIONAL BANK et al. No. 83. Argued Feb. 20, 1963. Decided June 17, [Syllabus from pages 321-322 intentionally omitted] Lee Loevinger, Washington, D.C., for appellant. Philip Price, Philadelphia, Pa., appellees. Mr. Justice BRENNAN delivered the opinion of Court. 1 The United States, appellant here, brought this civil action in States District Court Eastern Pennsylvania under § 4 Sherman Act, 15 U.S.C. 4, and Clayton 25, to enjoin a proposed merger Philadelphia National Bank (PNB) Girard Trust Corn Exchange (Girard), appellees here. complaint charged violations 1, 7 18.1 From judgment after trial, see 201 F.Supp. 348, appealed 2 Expediting 29. Probable jurisdiction was noted. 369 883, 82 1156, 8 285. We reverse hold that is forbidden by Act so must be enjoined; we need not, therefore do reach further question alleged violation Act. I. THE FACTS AND PROCEEDINGS BELOW. A. Background: Commercial Banking States. 3 Because first case which has required consider application antitrust laws commercial banking industry, because aspects industry degree governmental regulation it will recur throughout our discussion, deem appropriate begin with brief background description.2 country primarily unit banking. That is, control diffused very large number independent, local banks—13,460 them 1960—rather than concentrated handful nationwide banks, as, example, England Germany. There are, sure, addition independent some 10,000 branch banks; but branching, controlled largely state law—and prohibited altogether States—enables bank extend itself only lines often not far.3 It also case, course, many banks place loans solicit deposits outside their home area. But these qualifications, remains true ours essentially decentralized system community banks. Recent years, however, have witnessed definite trend toward concentration. Thus, during decade ending 1960 declined 714, despite chartering 887 new substantial increase Nation's credit needs period. Of 1,601 thus disappeared, 1,503, combined total resources well over $25,000,000,000, disappeared as result mergers. 5 are unique among financial institutions they alone permitted law accept demand deposits. This distinctive power gives key role national economy. For merely deal actually source of, money credit; when makes loan crediting borrower's deposit account, augments supply.4 Furthermore, intermediaries most transactions (since transfers moneys almost always check rather cash) and, concomitantly, repositories individual corporate funds. banks' use funds conditioned fact working capital consists deposits, liquidity guiding principle lending investing policies; chief country's short-term business credit. 6 operations varied complex; 'commercial banking' describes congeries services devices.5 creation additional credit, management checking-account system, furnishing would appear important. proper discharge functions indispensable healthy economy, failures depression periods attests. surprising subject variety controls, federal. Federal more extensive, focus upon it. extends i.e., chartered federal supervised Comptroller Currency, 12 21 seq. 321, virtually all 222, members Reserve System (FRS), 95% 1815, insured Deposit Insurance Corporation (FDIC). State member nonmember regulatory scheme elaborate governs controls American manifold. First, System, through its open-market operations, §§ 263(c), 353—359, rediscount rate, 357, modifications reserve requirements, ss 462, 462b, regulates supply economy thereby indirectly interest rates loans. rate regulation. System's activities designed influence prime, minimum, rate. no maximum, although national, usury where applicable. See 85. In range between maximum fixed practical minimum set fiscal policies (there against undercutting prime bankers seldom do), free price choose. Moreover, charges other services, such service checking privileges, regulation, or Entry, acquisitions covered network statutes. A charter bank, granted unless invested applicant, prospects doing sufficient operate at reasonable profit, give adequate protection undue competition possible failure. See, e.g., 26, 27, 51; CFR 4.1(b); Pa.Stat.Ann., Tit. 7, 819—306. Failure meet standards may cause FDIC refuse an insurance, 1816, FDIC, Board (FRB), permission insured, member, respectively. 36, 1828(d). Permission merge, consolidate, acquire assets, assume liabilities refused agencies on same grounds. (1958 ed., Supp. IV) 1828(c), note 8, infra. geographical limitations branching. 36(c). 9 Banks specific provisions aimed ensuring sound practices. pay 371a, invest common stocks own account investment securities any one obligor excess 10% bank's unimpaired surplus, 24 Seventh, 335, time savings above FRB, 371b. payment federally regulated. 1828(g); CFR, 1962 Supp., Part 329. limit obligations single includes securities. 84. imposes limitation laws, Girard. Pa.Stat.Ann. (1961 Supp.), 819—1006. perhaps effective weapon broad visitorial examiners. Whenever necessary, order 'a thorough examination affairs bank,' whether FRS bank. 325, 481, 483, 1820(b); 4.2. Such examinations frequent intensive. addition, furnish detailed periodic reports supervisory agencies. 161, 324, 1820(e). way maintain day-to-day surveillance system. And should discover unsound practices, equipped formidable array sanctions. If FRB making 'undue credit,' suspend facilities FRS. 301. even power. finds 'unsafe practices' conduct terminate status. 1818(a). involuntary termination severs membership FRS, if throws into receivership 1818(b). Lesser, nevertheless drastic, sanctions include publication results examinations. 1828(f). As existence panoply sanctions, recommendations concerning practices tend followed without necessity formal compliance proceedings. Davis, Administrative Law (1958), 4.04. 11 supervision been called '(p)robably outstanding example government entire methods supervision. * successful (systems economic regulation), successful.' Id., 4.04, 247. To efficacy owe, part, virtual disapperance scene.6 B. Proposed Merger PNB 13 respectively, second third largest 42 head offices metropolitan area, City three contiguous counties Pennsylvania. county both city itself; law, permits branching county, 819—204.1, four-county PNB, assets $1,000,000,000, (as 1959) twenty-first Nation. FDIC; about $750,000,000. Were consummated, resulting (approximately) 36% area 34% net (First Company, now largest) 59% 58% loans, while four 78% 77% 14 present size part Indeed, concentration noticeable generally, 108 1947 42. Since 1950, acquired nine formerly six; accounted 85% respective asset growth period, 63% 91% growth, 12% 37% growth. During seven increased share area's 61% 90%. November boards directors two approved agreement consolidation charter. By terms agreement, PNB's stockholders were retain certificates, deemed represent equal shares consolidated Girard's surrender exchange receiving 1.2875 each share. authorized, approval 2157 1960, (1963 his until he received Attorney General respecting probable effects transaction competition.8 All advised anticompetitive However, February 24, 1961, merger. No rendered time. explained basis decision approve statement included annual report Congress. effect competition, reasoned '(s)ince there remain alternative sources view beneficial international concluded over-all unfavorable.' He stated 'would far better able serve convenience being material assistance efforts attract existing industry.' day merger, commenced action. steps taken consummate pending outcome litigation. 16 C. Trial Court's Decision. 17 Government's relied chiefly statistical evidence bearing market structure testimony economists that, notwithstanding intensive banking, play competitive forces; increase, inimical play; principal felt had offices, relevant market; product market. defendants, offering contrary points, attempted show justifications They conceded economically strong management, offered greater prestige limit,9 compete out-of-state (particularly New York) general promote development area.10 18 Upon record, held that: (1) passage did repeal implication insofar apply mergers; (2) inapplicable mergers corporations 'subject Trade Commission'; (3) assuming applicable, actively northeastern States; (4) applicable market, probability substantially lessened merger; (5) since does violate fortiori Act; (6) benefit economically. ruled purposes line 19 commerce; contest ruling. II. APPLICABILITY OF SECTION CLAYTON ACT TO MERGERS. 20 Original Section 1950 Amendment. terms, reaches stock corporation engaged commerce, Commission.' FTC, Commission 45(a)(6).11 Therefore, acquisition, within 7.12 Appellant argues vigorously crucially different pure acquisition,13 argue vigor acquisition.14 Both positions, think, merit; fits neither category neatly. literal dispose question, determine congressional design embrace revealed history statute. appears impression; directed previous challenged amended, acquiring FTC's jurisdiction. 22 When enacted 1914, referred capital; silent consolidations. October 15, c. 323, 38 Stat. 731 732, 18, omission oversight. Congress' concern holding companies, specifically practice whereby secretly competitors purchasing those companies. Although known forms amalgamation time, less dangerously fully apparent Congress.15 Still, statutory language, read light overriding purpose concentrations tending monopoly, lent construction reached least hardly done violence language interpreted vague term 'share capital,' 30 Geo.Wash.L.Rev. 1024, 1027—1028 (1962), adopted 'where exchanged company, companies previously seller competing company (and) effecting section violated hence distribution selling shareholders subsequent dissolution bar proceedings aside purchase.' Handler, Industrial Mergers Anti-Trust Laws, 32 Col.L.Rev. 179, 266 (1932).16 23 courts found beyond technique supplanted prevalent mode amalgamation. v. Celanese Corp. America, 91 (D.C.S.D.N.Y.1950); Thatcher Mfg. Co. Comm'n Swift & Comm'n, decided together Western Meat Co., 272 554, 47 175, 71 L.Ed. 405; Arrow-Hart Hegeman Elec. 291 587, 54 532, 78 1007.17 result, became dead letter. Comment, 68 Yale L.J. 1627, 1629—1630 (1959); Commission, Movement: Summary Report (1948), 3—6; Henderson, (1924), 40. Meanwhile, Columbia Steel 334 495, 1107, 92 1533, stirred acquisitions. Note, 52 766, 768 (1952). Congress amended assets-acquisition provision. December 29, (Celler-Kefauver Antimerger Act), 1184, 64 1125 1126, 18.18 legislative questions why amendment made explicit reference mergers, FTC included, what omissions signify. Nevertheless, basic clearly emerges answers inferred. sought bring close regarded loophole section.19 But, involved Steel, simple purchase merger.20 words, contemplated amalgamations, acquisitions, scope 7. stock-acquisition provisions, together, fit perfectly lie somewhere ends spectrum. pp. 336—337, notes 13, 14, supra. So construed, exception excludes coverage accomplished 25 supported considerations. 26 First. Any illogical disrespectful plain amending create statute loophole. unquestioned provision embraces every including Congress, considered distinction acquisition unsupportable reason, overrule decisions recognized distinction.21 If, therefore, industries precisely difference treatment rejected. On hand, excluding lacuna importance.22 27 Second. debated bill amend aware important differences assets. Senator Kilgore, remarked: 28 'When you talk talking transaction. 29 '* (A)ctually merge stockholdings corporations, instead that—I am thinking terms—you entities get out it, issue lieu corporation, whereupon merged canceled handling operation two. really final wind-up, regardless call I physical things could lay your either records ground *.' Hearings before Subcommittee Senate Committee Judiciary Corporate Acquisitions, 81st Cong., 1st 2d Sess. 176; effect, see, id., 100, 139, 320—325. Plainly, 'assets' used meant equivalent intended ensure blunting antimerger thrust evasive original ineffectual. though reenacted haec verba amendment, expanded context include, least, consolidation, entail transfer parties, involving transfer. 22, seems point Congressman Patman's remark, typical many, 'What put footing, assets.' Hearings, supra, 126. House 7: 'The retains enough prevent evasion central purpose. covers method *. forbids direct indirect H.R.Rep.No.1191, 8—9. 31 Third. shows objective phrase 'corporation Commission' amalgamations make administering section. predominant hearings, debates, committee powers FTC. uncovered 7—Thatcher, Swift, Arrow-Hart—had rested directly substantive limited divestiture 11. intimations courts' enforce might greater. U.S., 561, S.Ct, 178, 563, S.Ct., 178—179, Eastman Kodak 274 619, 624, 688, 689—690, 1238; 598—599, 537, 1007; Irvine, Uncertainties Cornell L.Q. (1928). sometimes viewed gap jurisdiction.23 provided dual enforcement court agency, 25; W. T. Grant 345 629, 73 894, 97 1303; Alkali Export Assn. 325 196, 208, 65 1120, 1127, 89 1554, prior left Martin, (1959), 205, 219; Montague, Celler Anti-Merger Act: An Problem Economic Crisis, 37 A.B.A.J. 253 (1951). impetus came 187—194; Annual Reports, 1928, 18—19; 1940, 12—13; 1948, 11—22; (1948). remove remedial explicitly enlarged choice means underscoring enforcing provides undercut dominant eliminating accorded construed. Fourth. settled '(i)mmunity lightly implied.' People California Power 482, 485, 901, 903—904, 54. Cf. Borden 308 188, 198 199, 60 182, 188—189, 84 181; Southern Pac. 259 214, 239—240, 496, 501—502, 66 907. canon construction, reflects policy maintenance controlling indication wished confer special dispensation industry; wished, moreover, surely exempted 33 foreclosed because, Department, voiced still section.24 '(T)he views form hazardous inferring intent earlier one.' 361 304, 313, 80 326, 332, 334; Rainwater 356 590, 593, 946, 996; Mine Workers, 330 258, 282, 67 677, 884; cf. E. Du Pont De Nemours 353 586, 77 872, 875—876, 1057. holds misunderstanding played 1960.25 shall shortly turn, exists inconsistency construe require repealed pro tanto; task defining gave 1950. applicability authoritatively determined; speculation. 'earlier arch rests, (must) refrain disturbing lest change fashioned.' Ins. Todd Shipyards Corp., 370 451, 458, 1380, 1385, 620. fashioned predicated uncertainty dispelling uncertainty. 34 Effect 1960. 35 Appellees contended below directing factors approving immunizes challenge laws.26 think correct rejecting contention. express immunity conferred Act.27 Repeals strongly disfavored,28 cases repugnancy provisions.29 Two recent cases, Pan World Airways 371 296, 476, 54, illustrate principle. American, Civil Aeronautics given standard delineated immunize applied facts composing precise ingredients Board's powers; contrast, authority nor grant laws. 36 FPC's though, instant agency factor passing application. 484—485, 487—488, 905, appellees' application, particular weight; (and not) hearing application; judicial review decision.30 administrative bear little resemblance American. Nor die comprehensive unnecessary, completeness structure, disruptive structure. contrary, refute suggestion affected. Reports affect H.R.Rep. 1416, 86th 9; S.Rep. 3. also, 105 Cong.Rec. 8131 (remarks Rebertson, Act's sponsor). respects complete public utility interstate rail air carriers, others, subject. Rate indirect, p. 328, supra; duty discriminate services; location regulated, deposits—where please. preventing impair lead insolvency all-pervasive, minimize hazards intense competition. refutes argument private necessary ought immune scrutiny Kaysen Turner, Antitrust Policy 206. note, finally, doctrine 'primary jurisdiction' requires abstention integrity dictates preliminary resort administers scheme. Far East Conference 342 570, 72 492, 96 576; Great Northern R. Merchants Elevator 285, 477, 943; Schwartz, Legal Restriction Competition Regulated Industries: Abdication Judicial Responsibility, Harv.L.Rev. 436, 464 (1954).31 ousted, postponed. Am. Tank Car El Dorado Terminal 422, 433, 331, 361; Maritime Bd. Isbrandtsen 498—499, 851, 861—862, 926; 55. merger-application agencies,32 barred, proceeding completed commenced. 352 59, 69, 167—168, 126; Retail Clerks Int'l Schermerhorn, 373 746, 756, 1461, 1467. recognize applying primary channel appellate agency's decision, D. L. Piazza West Coast Line, Inc., 210 F.2d 947 (C.A.2d Cir., 1954), preclude entirely activities, Nav. Cunard S.S. 284 474, 247, 76 408; Railway Express Agency, 101 1008 (D.C.D.Del.1951); here event 350—352, considerations militate finding persuasively attenuating, postponing, 39 unnecessary add deprive later none force. plainly intend extinguish restraint having effects. certainly knew continue 352, how objectives thwarted. Acts embodied approaches inconsistent unrelated other. unreasonable trade. Securities 193 197, 48 679; Union 226 61, 53, 57 124; indeed, presently solely First Nat. Lexington, 824, 1864. tests illegality complementary. announced consideration determining violates prohibitions restraints.' 507, n. 1114, 1533; 768, necessarily simply passed intention displacing mergers—or banks—continued cannot repugnant anomalous conclude intending completely 40 III. LAWFULNESS PROPOSED MERGER UNDER 41 test 'may lessen competition' 'in commerce country.' analyzed detail Brown Shoe 294, 1502, 510, analysis repeated extended presents straightforward problem facts. difficulty 'line commerce' (relevant market) 'section country' appraise agree cluster products (various kinds credit) (such accounts trust administration) denoted banking,' 5, composes distinct commerce. Some institutions; category. Others enjoy cost advantages insulated substitutes furnished institutions. small-loan personal-loan companies' invariably much higher banks', seems, loans.33 Finally, which, freely institutions, consumer preference, insulating them, marked degree, competition; deposits.34 sum, clear 'sufficiently inclusive meaningful trade realities.' Crown Zellerbach 296 800, 811 (C.A.9th 1961). 43 determination asked parties compete, where, overlap, immediate. Bock, Markets (1960), depends 'the geographic supplier-customer relations.' 102. industries, essential Individuals typically bulk patronage community; find impractical distance.35 Transamerica Govs. Fed. Res. Sys., 206 163, 169 (C.A.3d 1953). inconvenience localizes effectively high transportation costs industries. eG., Crystal Sugar Cuban-American 152 387, 398 (D.C.S.D.N.Y.1957), aff'd, 524 1958). since, recently said related context, 'area charted careful selection operates, purchaser can practicably turn supplies.' Tampa Nashville Coal 365 320, 327, 81 623, 628, 580 (emphasis supplied); Standard Oil Cal. Stations 337 293, 299 300, 69 1051, 1055—1056, 93 1371, located seem 338—339, 1531 1532, 510. fact, vast originates area.36 Theoretically, concerned possibility perimeter within; actually, significance.37 44 delineate perfect accuracy Large borrowers depositors, record shows, small depositors may, matter, confined immediate neighborhood; customers intermediate size, appear, extremes. 35—37, evidently nature others. function separate customer's scale workable compromise found: fair delineation avoids indefensible extremes drawing expansively insignificant, narrowly markets, smallest considered. four-County apparently recognizes allowing roughly business, larger smaller Hale Hale, Market Power: Size Shape Under 119. helped conclusion regard competition.' Not submitted Currency connection hold, Comptroller, agreed: 'With respect levels areas involved. These level accounts, regional sectional immediately surrounding area.' 45 Having determined come ultimate Clearly, kind susceptible ready answer cases. appraisal impact prediction conditions future; arrest tendencies 'incipiency.' 317, 322, 1519—1520, 1522, based firm understanding yet data complex elusive. generally Bok, Merging Economics, 74 (1960). businessmen assess legal consequences confidence, planning retarded. 826—827 alert danger subverting permitting too-broad investigation. 1062, 1371. possible, simplify illegality, administration. Carbide Reg. Rep., Complaints Orders, 1961 1963, 15503, 20375—20376 (concurring opinion). case. 46 noted 315, 1518, '(t)he theme pervading amendments (to 7) fear rising tide economy.' warrants dispensing, certain proof behavior, Specifically, produces percentage significant firms inherently likely enjoined absence showing Koppers 202 437 (D.C.W.D.Pa.1962). lightens burden proving whose suspect consonant theory.38 '(c)ompetition greatest sellers, share,'39 economists, undoubtedly premise reasoning 30% area.40 Without attempting specify threaten concentration, threat.41 Further, whereas PNB) approximately 44% (PNB-Girard Pennsylvania) 59%. 33% significant.42 49 Our percentages raise inference arbitrary one, suggests critical. states 'are similar interpreting sections Act.' 8. Accordingly, passim; 595, 878, cited S.Rep.No.1775, 6, violative exclusive contracts defendant 23% sales six firms, 65% sales, maintained outlets 7% made. Motion Picture Adv. Serv. 344 392, 361, 426, unlawful, arrangements major 75% respondent's share, evidently, 20%. Kessler Stern, Competition, Contract, Vertical Integration, 53 231 (1959). comparison, foreclose P. Fashion Magrane-Houston 258 346, 360, 653, series manufacturer 40% industry's retail outlets. Doubtless turned extent 'by room newcomers.' 395, 363, 426. highly suggestive 55, integration contract, permanence former. figures contract-integration scholarly opinion, 42, support, believe, draw disclosed record. 50 nothing rebut tendency manifested percentages. was, officers vigorous reliance misplaced. economic-legal substantiality entitled weight, witnesses' failure concrete reasons conclusions.43 51 equally value, assurances witnesses dissatisfied readily short outright disgruntled customer alternatives; tightly oligopolistic operating. fundamental consumer's alternatives ill-served stayed hand 10, absorbed. fanciful eventuality, evident entry field easy.44 reject position deals intangibles manufacture sale tangible commodities, somehow price, arrangements, location, attractiveness surroundings, information, advice, charges, personal accommodations, advertising, miscellaneous extra services—and keen; emphatic.45 reason inimical. fill businessmen. Small businessman especially locality satisfaction needs. 35, reduced, filling marginal diminish. At concomitantly obtaining him disadvantage vis-a -vis businesses competes. fashion, accelerates generally. affirmative offer follow suburbs business. justification particularly merit. route: opening branches moved—so-called de novo contend unable expand thus, ones, internal expansion socially preferable acquisition. Second, suggested enable York concept 'countervailing power.' Kiefer-Stewart Joseph Seagram Sons, 340 211, 259, 95 219. justified procompetitive another, logical upshot could, violating embark end leader. City. plainly, propose successfully leading lack causing hardships individuals community. limits $8,000,000 each. inadequate obtain cities. 55 brings us contention, stimulate development. clear, saved reckoning social debits credits, beneficial. value magnitude ordinary competence, already, preserve traditionally proscribed benign malignant alike, aware, assume, paid. 56 enjoined, rejct pervasive dire, unspecified, Concededly, strong; undercapitalized overloaned; problems; overbanked; ruinous offing. mandate cutthroat exclude defenses dangers solvency, avert necessary.46 require, forces allowed framework industry. regulated critical welfare markes so. repetition, denied eliminated whole edifice entrepreneurial threatened; become excessive pressures, costs, affected; fulfill regulator Subject narrow policy, cartelization regimentation portions 514, 517—518, 545. warrant declining reversed remanded direction enter enjoining ordered. 58 Reversed direction. 59 WHITE took HARLAN, whom STEWART joins, dissenting. 61 surprised Government carried 62 response accelerating country, ill-suited control, numerous bills introduced 1955 1960.1 Department agencies2 advocated divergent dealing former urging extension cover latter supporting interest. Department's proposals repeatedly rejected approach infra, 379—383. 63 Sweeping 'design Act' 'predicated 7' (ante, 349), today concludes respectfully submit holding, remedy best interests public, measure frustrate occupied country. With performed involved, fundamentally manufacturing mercantile businesses. provide lend fractional reserves permit 'money,' amount indeed; three-fourths States.3 sufficiently liquid accommodate withdrawals, industrial element portfolios, Many collateral receive active institutions.4 volume dollar stability currency field, preservation relevant. entrusted safekeeping amounts belonging corporations. Unlike investor, risk loss return taking risk. disaster; strikes heavily, then spreads life community.5 Safety soundness extensive blanket limiting factors. describes, length, exercised 327—330), my evidences grounded solid specialized field. confirmed history. legislation mergers6 dates 1918, consolidate bank;7 1927 bank.8 1952 Currency.9 authorized theretofore prohibited10 bank.11 consolidations noninsured specified conversions conversion surplus newly formed converting bank.12 merging secure Governors bank.13 70 None prescribed guided significance attributed (supra, 373), increasingly 1950's. solution; First-america 38139, N.D.Cal., March 30, 1959, consent decree, theSherman invoked attack Indeed inapplicability duties. informal clearance 1955, stated: 'After proceed plan take matter.' Judiciary, 84th Sess., Ser. 3, pt. 2141 (1955). testifying 1957 Brownell, speaking noted: 'On concluded, agree, (of Act) 1950.' Financial Institutions 85th 2, 1030 (1957). 75 Similar statements representatives years enactment Act.14 acted S. finally enacted, 'Since customarily, invariably, exempt (Stock distinguished consolidations, Holding Company 1956 sec. Act.)' 1—2 'In (64 1125) deficiencies. Acquisitions section, (banks, virtue act, affected).' 5.15 79 floor debates Representative Spence, Chairman difficulty: ineffective way.' 106 7257 (1960).16 extending accomplish,17 deliberate 'it impossible rule barred interest.' 8076 (1959) Robertson, sponsor 1062). peculiar crucial intimate monetary Government, notion premises Unrestricted thought panic 1907 1930's,18 undesirable condition impose future: reflected awareness unregulated enterprises hand.' 9711 (1960) Fulbright, 'It justifies led flat prohibition applies mergers.' 9712.19 Thus recommended 'continuance exemption accepted recommendation; handle 'through specially framed (the embodies agencies, vesting responsibility administration placing 18(c) (Supp. IV, 1963), 1828(c).20 maintains requirement advance 375—377), establishes type. aid uniform standards' (12 1963) 1828(c)), responsible considering examined applications matters safety soundness,21 'shall (including monopoly), unless, factors, 1828(c). reports, bills. Time again lessening folowing typical: wants crystal various outweigh however favorable unfavorable, themselves, decision. And, bound General.' 19, 21.22 85 foregoing squarely agencies; advisory only.23 deliberately omitted attempt restrict circumstances properly adverse competition.24 86 What chosen 'crystal clear.' (Supra, 382.) face overwhelming Court, equanimity, 'uncertainty' foundations 349) puts irrelevant construing 87 conceive inappropriate overturn legislation.25 everyone—the department enforcement, proceeded assumption legislation, solution emphatically 88 nullified; turns exorbitant waste energy. illustrates, General's designated longer truly advisory, satisfactory suit immediately.26 merger's legality judged aspects, unencumbered banking.27 extent, threat complexities disruption attendant sanction.28 vestige initial veto.29 frustration manifest view, unwarranted intrusion domain. whatever pronounced current effectuate choice. 90 rest proposition, for, shown, support Prior read, pertinent follows: 'That acquire, indirectly, another restrain community, monopoly commerce.' indicated italics): 94 monopoly.' went matter way. While prohibiting described which—as aware—had type customarily 389—393. past drawn normal reenactment indicates adoption construction. E.g., Dixon, 347 381, 566, 98 785; Overstreet North Shore 318 125, 131—132, 494, 656. instance, underwent expansive metamorphosis, stock. usually, always, involve exchanges stock, rob relating force 7; according Commission's Ante, 346—348. short, intents circumspect look tenable. congenial interpretation. PNB-Girard technically governed 215. Girard, rights, franchises, liabilities, automatically vested nothing. Rather, creating entity properties, (which ownership nonfunctioning entity) mechanics reflected. Clearly functioning situation (a stock) (Emphasis added.) normally notice holders two-thirds dissenting right cash appraised shares.30 privately, usually subsidiary corporation.31 99 contends closely resembles similarity importance: voice corporation. obviously fall buys plants, equipment, inventory, etc., acquires absolute over, 100 unquestionably negates 'to plug loophole' (95 11485 (1949) Celler)). board proposition presented here: closed; it? unmistakably relationship decisions. 1007, divided vote, After issued avoid formed, company. dissolved subsidiaries authority, divest planned 'If combination anti-trust 599, 536, 1007.32 102 along others handed down (Thatcher 405), spur factor. universally unfortunate evaded expressed fashion: 103 weakened paper sword improper (1949).33 104 cast jurisdiction, gap, emphasized expectation debates—that section.34 Implicit named contemplated.35 importance, demonstrates asset-acquisition created Thatcher, Arrow. Arrow, unlike drew discussing breath examples acquisitions.36 Supreme (in Arrow) secured title issues order, lacks (1949). pointed innocent 16505 (1950). assets.37 107 act inadvertently reveal concentration—i.e., external consolidations'38 manufacturing, mining, merchandising, kindred endeavors. Specialized 1948 recounted statistics multitude industries—e.g., steel, cement, electrical food dairy products, tobacco, textiles, paper, chemicals, rubber—but figure concentration.39 heavily demonstrate movement presented.40 hearings exclusively fields,41 similarly spoke evil remedied.42 House, power: 'Four percent steel copper aluminum automobile electric lamp refrigerator glass cigarette forth. 109 bust pass bill.' 110 legislatory singularly devoid 111 mean suggest, 'regulated' sector continued acting irrationally. mention characteristics needs, compels plugged.43 112 Celler, co-sponsor, requested staff prepare indicating system.' Staff 82d Concentration Facilities III introduction reveals 113 21, 1945, wrote chairman requesting H.R. 2357, Seventy-ninth session, early predecessors revisions versions bills, impracticable Commission. Banks, placed circumscribed old statutes themselves substantively banking.' VII. 114 worth noting himself explaining 'all (H.R. 5948) prohibits acquisition.' 2109 (1956). part: '(N)o Ibid. defeated Senate. 115 reasons, inescapable me tour force.44 116 Memorandum GOLDBERG. 117 Brother HARLAN join conclusions point. dissent repect wish invalidating stands failed prove relative thereto superfluous today's disposition Compare Rescue Army Municipal Los Angeles, 331 549, 585, 1409, 1427—1428, 1666 (Murphy, J., dissenting); Poe Ullman, 367 497, 555, 1752, 1783, 989 (Stewart, dissenting). 'Every otherwise, conspiracy, several foreign nations, declared illegal.' Celler-Kefauver 'No discussion portion draws undisputed supplemented materials. Financing Business (Comm. print 1958); (3d ed. 1954); 1952); Bogen, Competitive Position Money Credit, Credit (1961); Freeman, Problems Adequate Capital (1952); Hart, Money, Debt, Activity (2d 1953); Lent, Changing Structure (1960); Sayers, Modern (5th 1960); Select Comm. Business, Procedure, Control (S. Doc. 186, 76th 3d 1940); Fox, Supervision Public Administration Formation (Redford 1956), 117; Stokes, Convenience Advantage Applications Branches, 921 materials Alhadeff, Monopoly (1954); Chapman, (1934); Horvitz, (1958); Lawrence, (1930); Berle, 589 (1949); Chandler, Monopolistic Elements Banking, J.Pol.Econ. (1938); Gruis, Laws Their Application (1955); Funk, Legislation Affecting Mergers, Bus.Law 496 (1957); Klebaner, Ind.L.J. 287 (1962); Wemple Cutler, Bus.Law. 994 Charter, Branching, Laws: Frustrated, 502 Regulation Mergers: Opposing Views Agencies Justice, 756 (1962). activity. 1956, 1841—1848, stringent 1958, registered 5.7% 7.4% 19. L.J., 516 522. sleight hand. reserves. real. Samuelson, Economics 1961), 331—343. 'products' course types example: unsecured mortgage receivable, installment goods tuition financing, cards, revolving include: acceptance individuals, deposits; estate trusteeship lock boxes safety-deposit boxes; reconciliation (acceptances letters credit); correspondent advice. supplying (see further, infra), mutual associations, unions, personal-finance sales-finance (through credit), direct-lending Post Office, Investment Corporations, insurance 1957, suspensions difficulties; two; nine. nine, FDIC. 286. year 1920's, 600 S.Rep.No. 17—18. 'merger' constituent disappear survive. closely, certificates event, treats compare 215 215a, affected consolidation. 'merger.' 1828(c) (by FDIC) or, liability in, written (i) acquiring, assuming, Columbia) (ii) (except bank), (iii) (Federal Insurance) non-member bank). granting withholding subsection, Board, Corporation, be, adequacy future earnings prospects, character served, consistent chapter. monoply), standards, (unless involved) request subsection description period report, following information: approval.' 84, 329, $15,000,000, $1,000,000 attributable accounting ranks fourth fifth urban activity, ninth seek elsewhere satisfy Philadelphia's currently $8,000,000. $6,000,000. economies scale, specifically, formation maintain. justification, mentioned developed fullness abandoned. confers 'Authority (§§ amended) persons respectively companies; residual intimation traditional disturbed. 'banks, comprise 'character commerce,' 'other reserved exclusion motivated already controls. Hurst Son 268 F. 874, 877 (D.C.E.D.Va.1920). inapplicable; 166 South-Eastern Underwriters Assn., 322 533, 1162, 1440. 'A involves disappearance substitution company's stockholder interests. Shareholders rights transferred. powers, fiduciary firms. likelihood continuity personnel. like corporation; Brief 75—76. '(A) effected vote shareholder decide shares. privately. comparable Furthermore terminated unaffected stock.' Appellees, 30—31. 1914 reviewed 313—314, 22—24, 1517—1518, discern conceptualizing 'stock Statements 316, 1519, 510; 592, 876—877, 1057; 507 Pictures 189 153, 182 (D.C.S.D.N.Y.1960). Op.Atty.Gen. 225, 241 (1922); Hernacki, Mergerism Geo.Wash. L.Rev. 659, 676—677 994, 999—1000 Legislative History, 768—769 Actually, holdings Arrow-Hart, quite narrow. 594—596 (1926). 11, 'an requiring person cease desist rid eight 735. Faced refusal equity, sustained), Sys. 184 311 1950), International Paper 372 1956). powerless maneuver defeating 1007. read: capital, 21. Whether correctly open 620, 349, 45(b). 1238, relying Gilbertville Trucking 115, 129—131, 217, 225—227, 177; 312, 486, 325. text 'no unsuccessful attempts enact plugging 766—767, enlarge illegality. 315—323, 1518—1523, discussion. whereunder (sic) underlying prohibit paradoxical law.' 1775, U.S.Code Congressional Service 4293. pervaded amendments. 1191, Hearing Amending Sections ser. 11—13, 28—29, 39, 62—63, 126—129, 321; (Congressman House: 'this seeks . stop, look, listen halt going country'), 11493—11494, 11497, 11502; 16433, 16443. Consolidated Corporation; alteration Consolidated's identity. Transcript Record, 1533 (No. 461, Term, 1947), 453 475. purchase, horizontal aspect, 24% structural fabricating 11-state western noted, market-share 'doubtful assumption' 'unusual conditions' mitigate 529, 1125, 1533. Congressmen conceived inability problems 10—11, 16; 28, 73; 24; 16453 (Senator Kefauver, vivid illustration Act'), 16503; 16498—16499. attitude typified remark O'Conor's: Trade) long ordering pieces happened worthless.' 16433. O'Mahoney remarked, doubt defect drafting back resulted great opportunity escape flagrant violators sharply criticizing decisions, continued: 'I purports authors giving monopolistic Kefauver observed: let wide-open remain. Most detrimental free-enterprise Nation occurred 16451. plant, patents, secrets, enhance desiring ordinarily additions limit. cash, consist principally adds capital. True, achieve objectives. purpose, (or transaction) tantamount meaning treated overlooked Chief carriers Interstate Commerce given, expressly, 1378, 1384; 5(11) (13). significance. vests banks.' changed assigning roles supplanted, assumptions FRB's existed unaffected. 163 Nothing transaction, 45(a)(6), Assistant Bergson: (§ future, today.' Cong, 28. 16437, 16452—16453; 11490—11491, 11499, 11504 (Representative Byrne: possesses restore statute.'). (1952) vii; 5948, printed 2108—2109 (1956); (testimony Brownell); 1—2, 5. remarks Spence: contention abandoned appeal. nevertheless, touches relations spheres. 63, 164—165, Contrast Aviation Communications 221(a), 222(c)(1); 5(11), 5b(9), 22; Shipping III) 814; Webb-Pomerene 62; itself, 18. Trans-Missouri Freight 290, 314—315, 540, 548—549, Joint Traffic 171 505, 259; 343 (plurality opinion), 374—376 (dissenting 459, 476—477, Pacific Arctic Ry. 228 87, 105, 107, 443, 448—449, 742; Keogh Chicago N.W.R. 260 156, 161—162, 47, 49, 183; Central Transfer Railroad 288 469, 474—475, 444, 446, 899; Warehouse 297 500, 513—515, 546, 551—552, 827; 197—206, 187—192, Socony-Vacuum 310 150, 228, 811, 846—847, 1129; Georgia 324 439, 456—457, 716, 725—726, 1051; 205—206, 1554; Allen Bradley Local 797, 809—810, 1539—1540, 1939; 545; Radio 358 334, 457, 354; Maryland Va. Milk Producers 362 464—467, 847, 852—854, 880; 54; 305, 481—482, 325; Silver Stock Exchange, 341, 1246. 49—50, 309—310, Texas Abilene Cotton 204 350, 553. (upon view) Comptroller's provision, 762—763 N.Y.U.L.Rev. 735, 750, Jaffe, Primary Jurisdiction Reconsidered. U. Pa.L.Rev. 577 Latta, Industries Cin.L.Rev. 261 Substantive Procedural Coordination, 673 (1958). FPC stay completion Department; fortiori, entertaining abstain FPC. Aluminum 148 416, 425 1945). lag (small-loan example) raw material, money, institutions' finished product, loans; compared respect, fortiori. banker testified frankly question: 'Do feel (personal-finance companies) want make?'—'Oh, no, definitely not. did, stop them.' (R. 298.) vis-a-vis thereon, 326—327, save financing retained issuing paper. witness defendants testified: 'We 1/2 per cent instances kept pace exceeded paying cent. inquiries. corner Broad Chestnut. Three cent, 1/2. discover, isn't anybody who trouble walk across Street ask why, say know. Habit, custom, relationships, convenience, roof superior changes level.' 1388 1389.) Consider colloquy counsel defendants: 'Q. office? 'A. Well, that. hope miles. 'However, opened communities established, street getting it's servicing retaining have. dependent customer) mile branch, losing regularly in-town city; establish branches.' 1815.) concerned, somewhat known, on. concerns locally, strictly forced nearby them. reputation, available spread possibly States.' 1372.) (Defendants' examination.) are: 54% originate area; 70%, 74% 84%, real 41% 62%, 94% 72%, trusts; 81% 94%, 56% 77%, 93% 87%, individuals. too low. discloses depositors; large, average $10,000 reinforces thesis customer, geographically. concede importance qualify, 1529—1531, 854—855, Yellow Cab 332 218, 226, 1560, 1564—1565, 2010; Indiana Farmer's Guide Publishing Prairie Farmer 293 268, 279, 185—186, 356. suggest skirting elsewhere, unobtainable. orientation depositors. so, valid customer—a good concern, enacting preserving 315—316, 1518—1519, artificiality deeming near concerned. fuzziness inherent 778—779, notable rapidly thins out. Delaware Valley 2% 4%, partnerships corporations; 7%, 2%, 133; Stigler, Preventive Policy, 176, 308—316, 328. Markham, Six-Year Appraisal, Va.L.Rev. 489, 521—522 'Substantially Lessen *': Current Horizontal 1638 1639 Machlup, Sellers' (1952), 84—93, 333-336; Bain, Barriers (1956), 27. Mason, Conduct: Comments, 46—2 Am.Econ.Rev. 471. shade seeking calculate there; 37, omission. appellees, smaller, concentratedly relatively proportion correction needed. five pattern difficult diminish quantitative obtained. circumstances, downward conservative estimate 38, 20% prima facie unlawfulness; Stigler presumptively unlawful; Markham mentions 25%. Bok's 8%. consult validity bar, rigorous Needless say, less-than-30% 41, Pennsylvania, Girard), valid, once unduly concentrated, legally privileges. great, slight increases eventual deconcentration correspondingly great. 1644. represented conpetition probative testimony. flourish consumers served. Bethlehem 168 576, 588, 592 (D.C.S.D.N.Y.1958). '(C)ongressional (was) competitors.' 1521, content prices profoundly anticompetitive. Entry wholly grace. 1722, 10-year 1951. one-third 1% representative: Jennings, banks? Keen, competitive. observation, never keener today. exist? stiffest, sternest take? takes forms. wealthy most, all, regards go regional—wide everything Is price? No, wouldn't price. top states. Interest bottom limitation, furnishes floor. between, permitted. base weather eye windward charging charge minute start protest, something leave differential believe quality caliber way, welcome Personalities there, factor, major.' 1940—1942.) besides rates, compensating balance borrower (i.e., bank) affects loan, varies considerably discretion. arguably, so-called failing-company defense, 280 291, 299—303, 89, 91—93, 431, contours failures. actions us, BusLaw 995 (1961). summarized Currency—national System—state Reserve-member FDIC—insured 311. insolvencies destroy rely borrowers' ability adversely 589, designate ante, 332. Occasionally, paragraph, 'consolidation' technical sense. 1043, 1225, 215a. Paton, Conversion, Consolidation Legislation—'Two-Way Street' (1954). 455, 214a. 457; 892 (now 129, 1828(c)). aggregate 243—244 3911 60—61, 1062 ('The regulating move offers help.'); ('Because limited, 'little help,' words Hon. Robert Bicks, Division, mergers.'). Senate, reported '1950 imposed practically Accordingly Cong. 198, 722, (1959): 'Time suffered uncontrolled insufficiently rapid weak supervise worst abuses 1907. collapse 1930's insufficient 'But unlimited unrestricted just possible. panics crises failures, moment days 'Banking borrowers, rules concerns, statute, 332-333. chapter.' 1816. 7259 (1960): institution interest, otherwise disapproved.' 'This belongs—in supervising examining Out experience knowledge people engage experts judging services. deciding 11—12 convinced, depend positive derived indicated, prepared enumerated devise list situations approved.' 1384, reconsider 'posited regime regulation' continuing validity. Toolson Yankees, 346 356, 78, 64. falls 'stock' General, well. (vesting banks'). semblance erected 'supplanted 344, 22. Sicne purely both. yardstick alleviate agony analyzing data—control prohibited. 363—364. infrequently true, points 354), agreed conceivable Apart restraints sponsors Fulbright) subjected strict considerations: 'And spelled 'unduly competition,' case.' policy. McLean 67, 83, 370, 382—383, 544; RCA Communications, 86, 92, 998, 1002—1003, 1470. 527, 1124, anti-competitive probabilities, incipient 317—318 32, 33, originally proscribe—the secret control. 338. paragraph voting proxies party thing use' point, dissenters forbid 600, 538, 14. 988, 1240, 2006, 2734 38—39 109—110 (1950): filled (Swift F.T.C. F.T.C., 1007.) competitor, cease-and-desist issued, illegally assumed amendment. 197. has, Arrow 313 1517, excerpt quoted 345) casts Kilgore's trying opposed distinction, earth idea carry corporation.' 176 passim. 39—40 11503 5—6, (1950); 40, 2—3 interesting faciliating accompanying text. aspect useful

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