STEEL COMPANIES (SUBPENAS) WEDNESDAY, SEPTEMBER 12, 1962 U.S. SENATE, COMMITTEE ON THE JUDICIARY, The committee met, pursuant to notice, at 10:05 a.m., in room 2228, New Senate Office Building, Senator James O. Eastland (chairman) presiding. Present: Senators Eastland (presiding), Kefauver, Johnston, McClellan, Ervin, Dodd, Hart, Dirksen, Hruska, Keating, Fong, and Scott. Also present: Thomas B. Collins, counsel, of the Committee on the Judiciary. Horace L. Flurry, counsel, Subcommittee on Antitrust and Monopoly of the Committee on the Judiciary. (Present at this point: Senators Eastland (chairman), presiding, Kefauver, Johnston, McClellan, Hart, Dirksen, Keating, Fong, and Hruska.) The CHAIRMAN. Let us have order. Gentlemen, we have rules about picture taking. If you want some pictures, take them now, and there will be no more during the hearing. This public hearing is called pursuant to agreement reached at the Judiciary Committee meeting of September 7 to hear representatives of the four steel companies who refused to comply with subpenas issued by the Antitrust and Monopoly Subcommittee of this committee dated August 21, 1962, requiring the corporations and the individuals named therein to appear before the Antitrust and Monopoly Subcommittee on August 31, 1962, and to bring with them and produce to the subcommittee certain specified records and documents described in those subpenas dated August 21. All four corporations, through their executive officers, notified the subcommittee that they would not appear on August 31 and produce the requested records. Thereafter, on August 31, the Subcommittee on Antitrust and Monopoly met in open hearing for the purpose of having the subpenaed witnesses appear and to receive from them the returns of subpenas issued on August 21. Later, on the same day, the Subcommittee on Antitrust and Monopoly, meeting in executive session, by majority vote reported a resolution to the full committee calling for contempt citations to be reported to the Senate against the four noncomplying corporations for their failure to appear before that subcommittee and produce the specified documents. 1 At its meeting of September 7 the full Committee on the Judiciary decided to defer action on the contempt resolution of the subcommittee until the full committee had an opportunity to hear the noncomplying steel companies in a public hearing. Today this committee is meeting for the purpose of hearing the views of the noncomplying steel companies in order that it may arrive at a determination as to whether the contempt resolution voted by the subcommittee, should be approved by this committee. The full committee, therefore, is prepared at this time to hear a witness speaking for all of the corporations, or individual witnesses representing each corporation. I would like to know who is representing Bethlehem Steel. Mr. BROMLEY. May it please the Chairman, my name is Bruce Bromley of the New York Bar. I am counsel for Bethlehem Steel Corp. There are here, in addition, each one of the subpenaed individuals from that corporation: Mr. Homer, its chairman; Mr. Martin, its president; Mr. Brugler, its comptroller. I represent the corporation and the three individuals, and I say again the three individuals are here present in this room before your committee. The CHAIRMAN. All right. Mr. Patton, who is representing Republic Steel? Mr. PATTON. Mr. Chairman, my name is Thomas F. Patton. I, as the president, will represent Republic Steel. Mr. George M. Feiel, our vice president and comptroller, is present; and Mr. H. C. Lumb, our vice president and legal counsel, is present. We will represent Republic Steel. The CHAIRMAN. All right. Who represents National Steel? Mr. MILLSOP. Mr. Chairman, I am Thomas E. Millsop, chairman of the board of National Steel Corp. Mr. George Stinson, the vice president and secretary of the corporation, is also here. He was under subpena. And Mr. Reed, our general counsel, is with us. The CHAIRMAN. Who represents Armco? Mr. JOHNSTON. Mr. Chairman, my name is Logan T. Johnston. I am president of Armco. With me is Mr. Reichelderfer, vice president; Mr. Correa, vice president and counsel. We represent Armco. The CHAIRMAN. The chairman has a letter from United States Steel Corp. which I have been requested to place in the record. It is dated September 12. DEAR SENATOR EASTLAND: By reason of your chairmanship of the Judiciary Committee and because of your interest in our position with respect to the subpenas issued by the subcommittee, I am prompted to reiterate our feeling with respect to such subpena. As we advised Senator Kefauver in our letter of August 10, 1962, United States Steel Corp. always has objected to the furnishing of detailed cost data and does so in this instance. We believe even the modified request involves release and dissemination of highly confidential information which could have serious adverse effects, especially in the light of our foreign competition. Even though we did not refuse to comply with the modified request because of prior negotiations with the subcommittee staff, now that the issue is before your committee, we believe we should urge the committee to weigh seriously the consequences of requiring the information to be furnished. Very truly yours, ROGER BLOUGH. (At this point in the proceedings, Senator Dodd enters the hearing room.) The CHAIRMAN. Gentlemen, have you agreed on someone to present the case for the steel companies? Mr. PATTON. Mr. Chairman, in accordance with the suggestion of yourself, the four companies have designated me to make a presentation which will incorporate the considerations and factors deemed relevant by all four of the companies here. The CHAIRMAN. I will recognize Senator Kefauver. Senator KEFAUVER. Mr. Chairman, most of these witnesses have given notice that they would not appear at the subcommittee meeting on August 14 where they were in default at the hearing. They said, among other things, that they had been advised by their attorney or they felt that they might be waiving some right that they might want to raise against the subpenas by appearing. Just what right that might have been, I have been unable to figure out or ascertain, but do I understand by their appearance here that they are waiving any such rights as may exist? Mr. PATTON. Senator Kefauver, I will ask Judge Bromley, who sits to my right and who is counsel for Bethlehem, to reply to that request, if it is in order. Senator KEFAUVER. I think the witness himself is the one who The CHAIRMAN. Well, the Chair is going to rule that a witness can always turn to, and confer with, his attorney. We even give Congress that right. Senator KEFAUVER. I do not know whether Judge Bromley is speaking as attorney for Republic, also. STATEMENT OF THOMAS F. PATTON, PRESIDENT, REPUBLIC STEEL CORP.; ACCOMPANIED BY H. C. LUMB, VICE PRESIDENT, DIRECTOR OF LAW AND CORPORATE RELATIONS, AND BRUCE BROMLEY, COUNSEL Mr. PATTON. He will be speaking as attorney for Republic, sir, in answering that question. Mr. BROMLEY. Senator Kefauver, Mr. Chairman, and members of the committee, I do not construe this occasion of such a nature that our appearance here constitutes a waiver of any of our rights. That was my position, sir, as you indicated with respect to the August 31 hearing at which we did not appear. I advised them, and I state now, that, in my opinion, had they then appeared, they would have waived the fundamental objection to that subpena, sir, that it was not a subpena ad testificandum, but was a subpena duces tecum, which the law, in my opinion, is perfectly clear, does not require the personal appearance of the person subpenaed since the primary purpose of the subpena was to obtain books and records which had prior thereto been refused, and a full and complete statement as to our reasons was on the record. I did advise that there might be a waiver involved there. I still think there might have been. I do not think that there is any waiver involved here. Senator KEFAUVER. Mr. Chairman, I respectfully disagree with the counsel, but that is a matter we can argue later. Mr. BROMLEY. Surely. Senator KEFAUVER. But is the appearance of the witnesses here today for the purpose of determining whether they are going to produce the records? The CHAIRMAN. No, sir. Senator KEFAUVER. I think their appearance The CHAIRMAN. Senator Kefauver, when you were present in the Judiciary Committee it was decided there to request the appearance of the people who had been subpenaed, and that same day I got letters from them requesting that they be given an opportunity to appear. Senator KEFAUVER. Well, I had understood in conversations with you, Mr. Chairman, before the meeting and in the discussion at the full Judiciary Committee meeting last Friday that they, or some of them, had requested the opportunity of appearing. The CHAIRMAN. They had. And I also stated that I had a request from this committee to invite or to request the representatives of the steel industry and these people who were subpenaed to testify. Senator KEFAUVER. Then are they here at their request, which has been accepted by the committee? The CHAIRMAN. The facts are that they are here at their request, and they are here at the request of the committee. Senator KEFAUVER. They requested and the committee accepted their The CHAIRMAN. No, sir. Now, in which order I do not know. One company asked me before the meeting that morning if they could appear. Senator JOHNSTON. Mr. Chairman, I think it should be made clear, too, that this committee is here seeking information and only information. We are not here to waive any rights that the subcommittee might have. Neither are we asking the steel companies, as I understand it, to waive any rights that they might have, but we are here trying to find out just what the true facts are in the matter, and why they did not appear. Senator KEFAUVER. Then, Mr. Chairman, as I understand it, they asked to appear, and then the committee invited them to appear. The CHAIRMAN. I said one steel company that morning before the meeting informed me that they would like to appear. I told you that I also had requests from members of this committee to request them to appear. Now, the committee requested them to appear, and later I got letters, I believe, from all the companies stating they desired to appear. Mr. Patton, proceed, sir. Senator MCCLELLAN. Mr. Chairman? The CHAIRMAN. Yes? Senator MCCLELLAN. May I ask a parliamentary inquiry? Is there now pending before the full committee a resolution and report of the subcommittee requesting that these companies be cited. for contempt, and that certain individuals be cited for contempt? Has that not been The CHAIRMAN. I had understood so. Senator Kefauver can answer that. Senator KEFAUVER. Thank you, Mr. Chairman. Senator MCCLELLAN. The record should show. Senator KEFAUVER. Yes, I think the record will show that the subcommittee, on its meeting of August 31, voted 5 to 2 to find the companies and the individuals who defaulted in appearance in contempt of the subcommittee, and recommended to the full committee that it cite them for contempt before the Senate. The CHAIRMAN. I am informed by the staff that the matter has never been submitted to the committee. It never received a report from the subcommittee, the staff informs me. Senator MCCLELLAN. Pardon me, I am trying to get this parliamentary situation correct. Do I understand no report has yet been submitted by the subcommittee? The CHAIRMAN. That is what the staff informs me. Senator KEFAUVER. No, the report was fully submitted, together with the proceedings before the subcommittee. The CHAIRMAN. Mr. Collins is checking and he is a staff member. Senator KEFAUVER. I saw the report that was submitted. Senator MCCLELLAN. One more question, Mr. Chairman. I am here today at this meeting of the committee under the impression that the subcommittee had acted. The CHAIRMAN. They have acted. Senator MCCLELLAN. And had voted to cite these people and the companies for contempt and had made such a report to the full committee with a request for the full committee's approval. Am I correct? Senator KEFAUVER. That is correct, to my understanding. Senator MCCLELLAN. Well, I am proceeding on that assumption. The CHAIRMAN. My information is that the subcommittee voted to cite these companies. The staff informs me-is that correct, Mr. Davis? Mr. DAVIS. Mr. Chairman, there was a printed report, a printed hearing on this matter. There was a letter that was referred to the committee stating the vote was 5 to 2. It is not a report under the circumstances. Senator MCCLELLAN. What is that? Mr. DAVIS. A letter merely stating that the subcommittee had voted 5 to 2. Senator MCCLELLAN. What I am trying to find out, is there anything pending before the full committee in the nature of a report and recommendation from the subcommittee? Senator KEFAUVER. If I may answer, the letter referring the matter to the full committee from the subcommittee enclosed the resolution passed by the subcommittee. Mr. DAVIS. No, sir. Senator KEFAUVER. Yes, it did. And asking the full committee to act, together with a printed copy of the hearings and proceedings before the subcommittee. The CHAIRMAN. What about that, Mr. Davis? Mr. DAVIS. The letter was received, but not the resolution. Senator KEFAUVER. It was attached to the resolution, Mr. Davis. Senator MCCLELLAN. Mr. Chairman, all I want to do is to get this thing in its proper perspective so we will know actually what is at issue. |