Court Opinion

ID: 9422770
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:04:27.242233+00
Date Added: 2024-06-11T17:22:39.372969
License: Public Domain

Mr. Justice Harlan,
whom
Mr. Justice Stewart joins, dissenting.
But for the Court’s return to a discarded theory of antitrust law, this case would have little future importance. The decision last Term in United States v. Philadelphia National Bank, 374 U. S. 321, that § 7 of the Clayton Act, 15 U. S. C. § 18, is applicable to bank mergers surely marks the end of cases like this one, in which the Government relies solely on §§ 1 and 2 of the Sherman Act, 15 U. S. C. §§ 1, 2. Since, however, this case, doomed to be a novelty in the reports, has become the vehicle for turning the clock back to antitrust law of days long past, I am constrained to do more than merely register my dissent.
I.
Stripped of embellishments, the Court’s opinion amounts to an invocation of formulas of antitrust numerology and a presumption that in the antitrust field good *674things come usually, if not always, in small packages.1 The “facts relevant to the alleged restraint of trade under the Sherman Act,” ante, p. 668, on which the Court relies, are: (1) the size relative to their competitors of First National and Security Trust before the consolidation and of First Security after the consolidation; (2) the competitive position before the consolidation of First National and Security Trust in the more limited area of trust business;2 and (3) “testimony in the record from three of the four remaining banks that the consolidation will seriously affect their ability to compete effectively over the years . . . ,” ante, p. 669.
The testimony to which the Court adverts was provided by competitors of First Security and was characterized by the district judge who heard it as seemingly “based merely upon surmise and . . . lacking in factual support.” 208 F. Supp. 457, 460. Since the Court suggests no reason for regarding this evidentiary finding of the trial court as “clearly erroneous,” it must be accepted here, e. g., United States v. Yellow Cab Co., 338 U. S. 338, 341-342, leaving as the factual basis for the Court’s decision only the statistics unquestionably showing that First National and Security Trust were big and First Security is bigger. The embellishment which adorns these statistics is the proposition that “where merging companies are major competitive factors in a relevant market, the elimination of significant competition between them, by *675merger or consolidation, itself constitutes a violation of § 1 of the Sherman Act,” ante, pp. 671-672.
The sole support for this proposition, which is defended by no independent reasoning whatever, is the four “railroad eases,” a reiteration of which forms the bulk of the Court’s opinion.3 It is questionable whether those cases, three of which involved the combination of massive transportation systems 4 and the fourth a combination of “two great competing interstate carriers and . . . two great competing coal companies extensively engaged in interstate commerce” 5 have any relevance to the present factual situation. That question, however, need not be explored.
In United States v. Columbia Steel Co., 334 U. S. 495, these same cases were cited by the Government for the same proposition urged here: that “control by one competitor over another violates the Sherman Act . . . ,” id., at 531. The Court relegated the cases to a footnote and stated that it would not “examine those cases to determine whether we would now approve either their language or their holdings.” Ibid. The facts of the “railroad cases” were found to be “so dissimilar from that presented” that they could “furnish little guidance” in deciding the later case. Ibid. Beyond this explicit rejection of these cases as a basis for decision is their further rejection clearly implicit in the portion of the Columbia Steel opinion which the Court quotes, ante, p. 672.
“In determining what constitutes unreasonable restraint, we do not think the dollar volume is in itself of compelling significance; we look rather to the *676percentage of business controlled, the strength of the remaining competition, whether the action springs from business requirements or purpose to monopolize, the probable development of the industry, consumer demands, and other characteristics of the market.” 334 U. S., at 527.
Quite obviously, if “bigness” alone provided a sufficient answer to the questions involved in a § 1 charge, it would be pointless to attend to the factors set out in Columbia Steel and reiterated here, in form approvingly but in fact without regard.
II.
If regard be had to the criteria enumerated in Columbia Steel, none of them except perhaps those which deal with “bigness” favor the Government here. Although for purposes of the Sherman Act, such statistics have little meaning in the absence of a context,6 it may be admitted that the figures in this case of dollar volume 7 and the percentage of business controlled are large. So far as these figures have relevance under the Columbia Steel test, they perhaps speak against the appellee.
*677On the other hand, the strength of the remaining competition is attested by findings of fact in the District Court, not refuted or even mentioned in the Court’s opinion:
“As of December 31, 1960, there were in operation in Lexington, beside the First National Bank and Trust Company and Security Trust Company, four other commercial banks, namely:
“Citizens Union National Bank and Trust Company, with total assets of $27,876,000, total deposits of $24,569,000 and total net loans and discounts of $14,457,000;
“Bank of Commerce, with total assets of $21,230,-000, total deposits of $19,500,000 and total net loans and discounts of $12,738,000;
“Central Bank and Trust Company, with total assets of $14,930,000, with total deposits of $14,144,-000, and with total net loans and discounts of $7,799,000;
“In the trial of the case, other than the officials and employees of the defendant, First Security National Bank and Trust Company, numerous witnesses, most of whom were men of long experience in the field of banking, testified to the effect that, in their opinion, the consolidation of the two Lexington banks herein referred to would not lessen *678competition in the banking field in Fayette County and did not tend to create a monopoly in that field.
“According to their testimony, the fact that the merged bank had a large percentage of the trust business of the community did not and would not substantially restrain or lessen competition in the field of commercial banking.” 208 F. Supp., at 459-460.8
The motive behind the consolidation also is indicated by the findings below, similarly unchallenged, that “. . . the consolidation herein referred to clearly appears to have been the result of a lawful program of expansion on the part of the merging banks rather than an invidious scheme to restrain competition or to secure monopoly in the local field of banking.” 208 F. Supp., at 460. Any doubts on this score are removed by the explicit concession of government counsel at oral argument before this Court that there is no evidence at all in the record of an anticompetitive motive behind the consolidation.
There is nothing whatever in the findings below or in the opinion of this Court pertinent to the other criteria laid down in Columbia Steel — the probable development of the industry, consumer demands, and other market characteristics — which supports the Court’s conclusion.9 *679In sum, the Court’s analysis of the facts of this case ends where it begins; the conclusion that the consolidation violates the Sherman Act collapses into the agreed premise that First Security is “big.”
III.
The truth is, of course, that this is, if anything, a Clayton Act case masquerading in the garb of the Sherman Act. One can hardly doubt that it comes to us under these false colors only because the decision last Term that bank mergers could be reached under the Clayton Act was indeed a surprise to the Government. See my dissenting opinion in Philadelphia National Bank, supra, at 373. No one has more sympathy for the Government in this respect than I. Nevertheless, having “at the outset elected to proceed not under the Clayton but the Sherman Act,” Times-Picayune Pub. Co. v. United States, 345 U. S. 594, 609, “the Government here must measure up to the criteria of the more stringent law,” id., at 610.
The pernicious effect of allowing the Government to change horses in midstream in fact if not quite in form10 goes beyond this case and, in the field of banking, beyond even the revitalization of a properly moribund rule of antitrust law. In combination with the Philadelphia National Bank case, today’s decision effectively precludes any possibility that the will of the Congress with respect to bank mergers will be carried out. The Congress has plainly indicated that it does not intend that mergers in *680the banking field be measured solely by the antitrust considerations which are applied in other industries. Characteristic of such indications, set out in detail in my dissenting opinion in the Philadelphia National Bank case, supra, at 374-386, is the following excerpt from the Senate Report on the bill which became the Bank Merger Act of 1960, 12 U. S. C. (Supp. IV, 1963) § 1828 (c):
“The committee wants to make crystal clear its intention that the various banking factors in any particular case may be held to outweigh the competitive factors, and that the competitive factors, however favorable or unfavorable, are not, in and of themselves, controlling on the decision.” S. Rep. No. 196, 86th Cong., 1st Sess., 24.
Adherence to the principles enunciated in Columbia Steel, supra, would leave room for an accommodation within the framework of the antitrust laws of the special features of banking recognized by Congress. It is difficult to see how features peculiar to banking or indeed any other features of a particular case which, in reason, should lead to a different result, can stand up against the bludgeon with which the Court now strikes at combinations which may well have no fault except “bigness.”
I would affirm.

 Compare the dissenting opinion in United States v. Columbia Steel Co., 334 U. S. 495, 534.

 The reason for singling out this aspect of the banks’ activities is unclear, since the Court does not determine even whether trust department services should be regarded as a relevant market. See ante, p. 667, note 3. In view of the majority’s disposition of the case, I do not set out here my reasons for believing that the District Court’s determination that the consolidation in question does not violate § 2 of the Sherman Act (monopoly) should be affirmed.

 United States v. Yellow Cab Co., 332 U. S. 218, cited by the Court, ante, p. 671, is wholly irrelevant.

 Northern Securities Co. v. United States, 193 U. S. 197; United States v. Union Pacific R. Co., 226 U. S. 61; United States v. Southern Pacific Co., 259 U. S. 214.

 United States v. Reading Co., 253 U. S. 26, 59.

 The presumption which the Court laid down in Philadelphia National Bank, supra, at 363, that “a merger which produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market, is . . . inherently likely to lessen competition substantially . . .” was concerned with the application of § 7 of the Clayton Act. Compare Times-Picayune Pub. Co. v. United States, 345 U. S. 594, 612, a Sherman Act case in which the Court noted that “no magic inheres in numbers,” and quoted with approval the statement in Columbia Steel, supra, at 528, that “the relative effect of percentage command of a market varies with the setting in which that factor is placed.”

 As found by the District Court, in 1960, First National had “total assets of $65,069,000, total deposits of $58,673,000 and total net loans and discounts of $35,434,000.” 208 F. Supp., at 459. Security Trust, in 1960, had “total assets of $21,033,000, total deposits of $17,402,000 and total net loans and discounts of $12,317,000.” Ibid.

 The only contrary evidence, testimony of presidents of three of the four competing local banks who “expressed considerable fear that the consolidation would result in serious loss to the other banks and would be disastrous to some of them,” 208 F. Supp., at 460, was discredited by the District Court. See supra, p. 674.

 With reference to the probable development of the industry, the Government turns to the past and notes that the number of local banks decreased from 10 to 7 between Í929 and 1938; but this statistic, more at home in a Clayton Act case, is of doubtful significance in the present context, particularly in view of the period during which the decrease occurred. The same may be said of the Government’s reference to the testimony of the president of a competing bank that the consolidation from which his bank resulted was carried *679through (years before the First Security consolidation) principally to enable it “to better compete with the First National.” In fact, in the three years since the First Security consolidation, there has been no further concentration.

 It is one thing to say, as the Court did in Times-Picayune, supra, at 609, that “the Clayton Act’s more specific standards illuminate the public policy which the Sherman Act was designed to subserve . . . .” It is quite another thing to treat them as interchangeable. See id., at 609-610.