Brown Shoe Company, Inc. v. United States

PETITIONER:Brown Shoe Company, Inc.
RESPONDENT:United States
LOCATION:Brown Shoe Co.

DOCKET NO.: 4
DECIDED BY: Warren Court (1962)
LOWER COURT:

CITATION: 370 US 294 (1962)
ARGUED: Dec 06, 1961
DECIDED: Jun 25, 1962
GRANTED: Jun 20, 1961

ADVOCATES:
Archibald Cox – for the appellee
Arthur H. Dean – for the appellant

Facts of the case

When Brown Shoe Company bought Kinney Company Inc., the United States sued Brown for antitrust violations of the Clayton Act. The United States argued that the merger would substantially lessen competition in the shoe manufacturing and sales industries. The U.S. District Court for the Eastern District of Missouri ruled in favor of the United States. The court ordered Brown to divest itself of all Kinney stock and assets and to operate Kinney as separately as possible pending complete divestiture. The court gave Brown 90 days to come up with a plan for complete divestiture. The case reached the Supreme Court on direct appeal under the Expediting Act, which allows direct appeal of final district court judgments.

Question

Does the Brown/Kinney merger violate the Clayton Act?

Earl Warren:

Continue your argument.

Archibald Cox:

Mr. Chief Justice, may it please the Court.

Before the recess, I attempted to describe the manufacturers in the industry and Brown’s position as one of the dominant form in an industry dominated by four concerns.

And then I began to go on to point out that even before acquiring Kinney, Brown had begun to tie up retail outlets because we think that’s a relevant circumstance in determining whether this tying-up more of it was a substantial factor in lessening competition.

I pointed out already that Brown had acquired Wohl, the largest operator of leased outlets and department stores.

It acquired Regal’s 98 stores as well as the manufacturing facilities in 1954, where the Wetherby-Kayser’s four Los Angeles stores and independents in four Texas cities and in Columbus, Ohio.

Potter Stewart:

Wohl and Regal by your own definition were in different lines of commerce, weren’t they?

Wohl made —

Archibald Cox:

No.

Potter Stewart:

— was primarily in ladies’ shoes and Regal primarily in men’s shoes, is that it?

Archibald Cox:

Well, but, primarily yes.

But we wouldn’t say that — I think I would disagree with what seems to me be the implication that you take what someone is primarily in, then narrow to that and say that is the line of commerce.

Potter Stewart:

Well, isn’t it true that Regal’s retail stores is only one — sells one shoe, no?

Didn’t they have an unsuccessful experience with women’s shoes, or no?

Archibald Cox:

Regal is a seller of men’s shoes —

Potter Stewart:

Men’s shoes.

Archibald Cox:

And the acquisition of Regal looked at vertically would simply tie up, a part of the market for men’s shoes, not part of the market for manufacturer selling women’s shoes.

Potter Stewart:

And those are separate lines of commerce, you told us.

Archibald Cox:

Yes, yes.

I was thinking of price —

Potter Stewart:

I mean they are not competitive with each other.

Archibald Cox:

They’re not competitive with each other.

In addition to the owned outlets on through these firms that it acquired, Brown also had 584 franchise dealers at the time of the merger.

Firms which were received assistance from Brown in various forms and in return for which they committed themselves at one time not to purchase from other competing manufacturers.

On advice of counsel as the record puts in, that was eliminated from the written contract and was watered down to a commitment not to carry any conflicting lines.

And if a Brown franchise dealer were to carry a conflicting line, unless it was a casual incident, he would be cut off as a Brown franchise dealer.

There were a number of advantages in being a Brown franchise dealer.

One was that you were able to purchase rubber-soled canvass shoes at a discount from Goodrich and otherwise that you’ve got the benefits and certain advantages in the form of insurance, both group life insurance and also buyer casualty insurance.

Still another advantage as I understand it was that also some of the outlets might get occasional health and merchandising and inventory control in planning their stocks and architectural design.

There is testimony quoted in that brief to the effect that you got this far more regularly and successfully, if you are a Brown franchise dealer which carried with it, I emphasize, the obligation not to use — not to — to concentrate in Brown shoes and therefore to exclude conflicting lines.

Archibald Cox:

Now, it’s true you could quit at anytime, but the bait was there, if I may it colloquially.

You got certain advantages that you gave up if you quit and as long as you were a Brown franchise dealer, this was an outlet which was wholly or which was partially foreclosed at least so far as shoes competing with Brown were concerned.

Potter Stewart:

There was a considerable turnover —

Archibald Cox:

There was —

Potter Stewart:

— turnover every year.

Archibald Cox:

Oh yes, there was turnover, and the Brown franchise dealers sold other shoes — shoes that didn’t compete with Brown.

Potter Stewart:

And lot of them did quit as you call it, every year.

Archibald Cox:

And a number of them — a number of them quit.

But the total number was —

Potter Stewart:

And this would have — become new.

Archibald Cox:

The total number was constantly growing.

There were 470 in 1950, 584 at the time of the merger, 647 in 1958, so that this is an increasing part of the market.

The Kinney Shoe Company, we discussed it’s less important manufacturing facilities before.

As a retailer, it was in that capacity that it was important to Brown and is significant here and has its major significance here in this case.

It was the largest retail chain of family shoe stores.

It had 352 stores in 312 cities and it too was rapidly growing. For example, from the time of the merger until 1958, its stores increased to 418, an increase of 80%.

If you look at its outlets and shopping centers, too, there were 50 in 1955, a 118 three years later and 136 — an increase of a 136%.

In 1955, Kinney’s sales were 6,400,000 pairs of shoes purchased from outside sources.

And is other than in addition to its own manufacturer.

It sold, lumping them all together, 1.3% of the national total.

Broken down into the three categories, Kinney sold 1.7% of children’s shoes, 1.4% of women’s shoes, there was a much smaller factor in the men’s shoe market, only 3%.

So that to pull this together, the merger combined the fourth and 13th largest manufacturers.

The fourth largest manufacturer in the market with the most aggressive and largest of the independent retailers having 1.7% of the children’s market and 1.4% of the women’s and less than one-half of 1% of the market for men’s shoes.

And we come to the question whether the vertical effect of this merger would substantially lessen the competition — might substantially lessen the competition in any line of commerce, in any section of the country.

Our argument which I think I outlined before is that Brown’s capture of Kinney’s outlets violates Section 7 because its tendency will be to foreclose competition and send — selling shoes to Kinney and that this segment of the market, the Kinney segment under all the circumstances of this industry is substantial.

So that the three elements, we must attend to.

First, we must define the market in terms of the section of the country and the product or line of commerce.

Second, I have to address myself to the question, is there a reasonably likelihood that the acquisition will lessen the competition.

And then third, I must show, of course, that the substantial share of the market is affected.

Geographically, the market is a matter of common agreement, so far as manufacturer’s market is concerned that that’s what we’re now talking about.

Archibald Cox:

Geographically, we all agree that it’s nationwide.

And there’s no reason to discuss that any further.

In terms of the product or line of commerce, the District Court found that the relevant market was for men’s shoes, women’s shoes and children’s shoes.

And I turn to the question in a moment whether those findings are supported by the elements.

It seems to me important first to direct our minds and little bit to the question of what are we looking for and why are we looking for it.

When we talk about line of commerce or market, as I see it, that —

Felix Frankfurter:

May I break in to ask whether you can break up where in any line of commerce in any section, are those distributed terms or is that a unified collective terms.

In other words, it must have been a line of commerce in any section in any section or is any line of commerce to be detached from that next phrase.

Archibald Cox:

I would think it could be the test, if I understand (Voice Overlap) —

Felix Frankfurter:

You mean, any lines of commerce in the abstract?

Archibald Cox:

No, I think it’s —

Felix Frankfurter:

Or must it mean any line of commerce in any section?

Archibald Cox:

Well, I think that you must have to make the case a substantially — a tendency to lessen competition in the line of commerce and in the section.

I don’t know.

Felix Frankfurter:

And in the section, conjunctively.

Archibald Cox:

Oh, yes.

But, I would also think that if you had the whole country, a fortiori you had it in the section.

Felix Frankfurter:

Well, now that the line of commerce relates to a single community with —

Archibald Cox:

No, no, but if one has a nationwide manufacturer’s market, then he has satisfied the “section of the country” required.

Felix Frankfurter:

But what I’d like to get laid down is whether unrelated 15 cities constitute a “section of the country.”

Archibald Cox:

No, I might ask, Your Honor, to defer that until we come to talk — about the retail markets because it makes more sense in connection — if we’re talking about retail competition, I will address myself to it at the end.

I’m now talking —

Felix Frankfurter:

You’re now talking, are you now talking between — are you not talking competition between shoe manufacturers —

Archibald Cox:

To sell.

Felix Frankfurter:

— which sell throughout the country?

Archibald Cox:

Yes, sir.

Felix Frankfurter:

But even as to them, must it not be in any line of commerce in any section.

Archibald Cox:

Well, I suggest that if you have a market defined in a term of line of commerce that extends to every section, it necessarily is a line of commerce in some section.

Felix Frankfurter:

Isn’t it a question of arithmetic or geography, but let me be specific.

Suppose you have two powerful shoe companies competing for a very specialized fancy movie star shoe market in the city of New York exclusively —

Archibald Cox:

But —

Felix Frankfurter:

— suppose that’s the only city that is an outfit as between two competing manufacturers, that New York women or enough of them care for particular kind of too thick heeled of a special kind, so thin that almost invisible to the eye, yet giving gravitation support.

Archibald Cox:

My answer, Your Honor, which I think meets the point is that we have agreement here that so far as manufacturers are concerned, they are competitors in selling all around the country.

And that therefore, we don’t need to consider, so far as the manufacturers are concerned, the question that you raised.

Now, we do need to consider it in terms of retailing but I wonder if I might — can take it up to that point.

Felix Frankfurter:

Well, all I can say is you can by agreement, you had a difficulty out of my head.

Archibald Cox:

Well, but it’s a matter of — it’s a matter of fact and —

Felix Frankfurter:

Well, I’m not saying it isn’t.

I just want to get enlightened at the outset.

Archibald Cox:

Well —

Felix Frankfurter:

Take my case of two powerful manufacturers as competing for a specialized New York market in particular kind of shoe, will that be within the Act?

Archibald Cox:

We would say — we would say that this case does not involve that question, but yes, it would be within the Act.

Felix Frankfurter:

Well, then I don’t understand the Act.

But may well be.

Archibald Cox:

And we would say, following the implicit holding in the Maryland-Virginia Milk Producers case that a metropolitan area, such as you mentioned, may be a section of the country.

Their holdings under the Sherman Act saying that tying up movie chains —

Felix Frankfurter:

Well, that’s a — I can —

Archibald Cox:

— in metropolitan areas.

Felix Frankfurter:

I can understand that answer.

That implies that it is a section of the country —

Archibald Cox:

Yes.

Felix Frankfurter:

But not because there are 15 unrelated discrete, separate communities.

Archibald Cox:

That’s quiet true.

Now, in the retailing and in this case, we have the further fact that there are — not 15, but a 141 —

Felix Frankfurter:

Well, I don’t think if you multiply discreteness, it makes it a compound.

Archibald Cox:

I wonder when one considers whether what Congress was concerned with, was getting something of national importance, then it does not become material unless one puts a very literal meaning on the word “section” that you have cities scattered all over the country.

The alternative as Justice Stewart suggested earlier would be to say that Section 7 does not apply to retail —

Felix Frankfurter:

Well what —

Archibald Cox:

— because all the markets are retail markets.

Felix Frankfurter:

What troubles to me is when Congress changes a phrase which has limited geographic connotation, the one which has wider geographic connotation, I must face a need to that.

Felix Frankfurter:

I can’t ride off on general vague intentions of the statute.

Archibald Cox:

Well, I’ve — again —

Felix Frankfurter:

I maybe all wrong but I’m just trying to understand this business and —

Archibald Cox:

No, sir.

The only difficulty I’m having frankly is that this is irrelevant to the point we’re talking about, manufacturers because they don’t sell in single cities.

When we come to the retail combination, then they do and while I — I don’t mean to be rude or presuming.

Felix Frankfurter:

You’re not.

Archibald Cox:

It seems to me that the argument would progress far more clearly if we could talk about manufacturing for while, the issues that —

Felix Frankfurter:

You see you have — neither before lunch nor now dealt with what to me is a troublesome thing that Congress for reasons of its own has changed from the phrase in any community to — in any section.

Archibald Cox:

Well, let me defer my argument with respect to manufacturing then and turn to the retailing portion of it and then try to deal with this point because I think, we should deal with it in the context in which it arises.

Now, here I pointed out earlier that Brown had become a significant factor in the retail market.

And that Kinney was also the largest and most aggressive independent retail chain.

Kinney had the eighth largest volume of sales in the entire industry.

It had as I said before, 352 stores in 315 cities.

The District Court found that Kinney and Brown were competitors in the retailing of shoes.

And perhaps, I should emphasize again that I have turned to the retail market and the horizontal effects of the merger. I hope, I will have time to come back to the other.

That testimony that Kinney and Brown were competitors in the retailing of shoes is supported by a large number of detailed facts.

There’s evidence that there were 138 cities of over 10,000 population in which Brown and Kinney both had stores.

In the 123 of those 138 cities, the stores were located within two blocks of each other.

In 58 cities, there was a Kinney store and the Wohl department within two blocks.

And in eight cities, Kinney and Regal had stores within two block of subject, of course, to qualification that you make that they weren’t competitors and —

Potter Stewart:

Well Kinney, as I understand, it sells men’s, women’s, —

Archibald Cox:

Yes.

Potter Stewart:

— and children’s —

Archibald Cox:

They would — so they would be competitors in men’s shoes, but —

Potter Stewart:

They would be competitive of both —

Archibald Cox:

That’s right.

Potter Stewart:

Regal —

Archibald Cox:

That’s right.

Potter Stewart:

— and Wohl as I understand it.

Archibald Cox:

Yes.

Potter Stewart:

Although Wohl and Regal are not competitive in most places.

Archibald Cox:

Yes, that’s true.

Yes.

The product — and so far as the evidence showing the competition in addition to location, they sell generally men’s, women’s and children’s shoes in these stores.

There are some specialists but in general, in all stores, either shall sell men’s shoes, women’s shoes, or children’s shoes.

There was testimony, for example, that in the men’s line, that Brown’s Pedwin and Kinney’s men’s shoes were very similar in price, style, and appearance and very competitive.

I point out that 48% of Brown’s sales of men’s shoes and 42% of Kinney’s sales were in the $7 to $10 price bracket.

With respect to women’s shoes —

Earl Warren:

Would you state those figures again, please?

Archibald Cox:

That 48% of Brown’s sales of men’s shoes and 42% of Kinney’s sale of men’s shoes were in to $7 to 9.99 price bracket, I think I said $10.

Similarly, there were lines of Brown’s women’s shoes — Air Steps, Life Strides, Glamour Debs, which were competitive with the shoes sold by Kinney.

27% of Brown’s women’s shoes and 35% of Kinney’s were within the $3 bracket, about $4 to $7.

And among children’s shoes, the figures, without taking time to read them were substantially the same.

In addition to the overlap on prices, one of the most persuasive testimonies in my mind was the repeated testimony from my — string of retailers in perhaps 40 of the — or more of these cities, testifying from their actual experience that their stores were competitive with Brown and Kinney’s.

Sometimes, it would be a Brown retailer and he testified that Kinney was his competitor.

One finds such expressions, as I took Kinney shoes off the soles of my customer.

People told me that they had been shopping down at Kinney and they were coming up in the street and shopping here.

There was testimony from the Brown and Kinney executives which corroborates this.

Brown said that it aimed to the middle income and what we call the lower price market.

And Kinney defined its market as the middle income and lower income group of America.

And the — Mr. Dean in his brief, stresses wide divergence in merchandising methods, style, advertising, and the like, but of course, when you’re selling differentiated products today, those are the heart of competition rather than evidence of a lack of competition.

Now, I come to the application of Section 7.

And again to the key phrase, first, whether the effect of the acquisition maybe to substantially lessen competition.

At first, it seems to me necessary to find the market, both geographically and in terms of the product or line of commerce.

In terms of the line of commerce, the District Court found that the retail products were or lines of commerce were men’s, women’s and children’s shoes.

Now, I point out that the evidence shows that this is the way the trade is organized.

This is the way retailers speak to themselves, they sell men’s shoes, they sell women’s shoes.

The stores are either men’s, women’s or children’s or family shoe stores.

Again, showing the way the industry is organized.

Archibald Cox:

And Brown’s own organization heads up to executives in charge of those branches.

It’s true that there can conceivably be finer divisions by style and price but the District Court found, following the testimony that they were quite impracticable.

In the first place, he had testimony from retailer witnesses — live witnesses that the high prices do compete with the low prices.

He had evidence of an interchangeability of users nor is this one dramatic instance was the president of Brown came in to testify one day, wearing what were called dress shoes and the next day, he came in to testify wearing casual shoes which underscored the point that these classifications do not really indicate the uses or lack of competition.

They are manufacturers’ selling gadgets for the most part.

Potter Stewart:

He used as direct testimony one day, and cross-examination in the next.

Archibald Cox:

I trust that it wasn’t the casual when he wore the second.

There was also, as I said, before direct testimony from the retailer witnesses, all of which is outlined in our brief.

Now the District Court found that geographically, the market at retail is the city and the immediate surrounding and contiguous area.

There, again, he had testimony of witnesses describing what was the market, and there are 40 out of the 138 cities.

And I think that this is indisputably a fair sample.

Anyone who suggests that the others of the 138 or somehow, that unique, surely has the burden to do it and the appellants called that no — called one live retailer witness.

There were good many experts and many, many statistics but only, if my memory is right, one live witness.

The Government’s expert testified that normally you find 85 to 90 of the sales in marketing concentrated in the city.

And the Court reviewed the detailed evidence about Saint Louis and found that there, also of course, a retailer on one side of the city does not compete with a retailer way over on the other side of the city but still, they’re in competition with each other all the way along the line with theirs in the middle in competition with those on either side of him and that therefore, the most practical line was the city.

The question then arises whether despite the fact that the practical market is the city and it’s immediately surrounding area.

This qualifies as a “section of the country.”

As I understand the appellant’s argument to which Mr. Justice Frankfurter was adverting or the question that Mr. Justice Frankfurter mentioned, it is in two parts.

First, is Mr. Justice Frankfurter suggesting the statute did take out the word “in any community” and uses simply the term “in any section of the country.”

And the contention is made that that signifies that a city cannot be qualified as a section of the country and as the justice said, “Well, you can’t add a lot of separate discrete cities and get a section.”

Then the other point on which appellant relies in this connection is the testimony of Mr. Kelley who was general council of Federal Trade Commission who at one point said the combination of department stores in New York, this was in testifying, would not violate the proposed bill.

He later indicated that New York City might be a market.

This was only testimony and it seems to me that no very firm conclusions can be predicated about it under those circumstances.

Potter Stewart:

Well it’s true, Mr. Cox, that the statute as it used to be worded would by its literal terms have absolutely prohibited the acquisition of one small shoe — shoe store in Peoria, Illinois by another small shoe store —

Archibald Cox:

That’s true.

Potter Stewart:

— in Peoria, Illinois.

Isn’t it?

Archibald Cox:

It’s — that is true and it is also — I can’t direct myself to significant —

Potter Stewart:

Assuming that also men’s shoes.

Archibald Cox:

All I meant to dispose of, if I may put it, is this Kelley’s testimony.

Archibald Cox:

Now, I’m coming to the change in the language.

It’s unquestionably true that this was intended to make possible some mergers between little fellows that Section 7 would have forbidden before.

And the day the example was given in the senate report, that the use of the term “community” stirred a storm of controversies since it was argued the Act was worded might go so far as to prevent any local enterprise in the small town from buying up a local enterprise the same time.

As the consequence, the word “community” was dropped from subsequent versions of the bill.

Now, I think that one way of stating the question is whether there to indicate that any combination in a town or a city or even in a succession of towns or cities is exempt from the bill.

We say not.

We say first, that one must consider the substantial and meaningful problem that is addressed to not only in the terms of the Congressional Amendment in 1950 but that we’re considered with here.

We’re concerned with actual markets reflecting business dealings.

Market such as that economists or businessmen would choose regardless of the verbal geographical definition as the area of effective competition.

And one of our troubles is — well, let me back up just a little, we think this is entirely clear not only for the common sense that you’ve got to deal with business markets, business practice but also, is — it’s revealed that this is a question from a legislative history in the right approach.

The reported sales said, “What constitutes a section will vary with the nature of the product owing to the differences in size and character of markets.

It would be meaningless from an economic point of view to attempt to apply for all products a uniform definition of section,” but such definition were based on miles, population, income or any other unit of measurement.

The section which would be economically significant for a heavy durable product such as large machines tools might be meaningless for a light product such as milk which certainly sounds in terms of a retail consumers market.

And of course was so applied although this Court didn’t pass on the point in the Virginia-Maryland Milk Producers case.

Then it went on as the Supreme Court stated in Standard Oil Company against U.S. Since it is the preservation of competition which is at stake, the significant proportion of coverage is that within the area of effective competition.

And it did went on in the report in very much those terms, so that we think our practical businessman or economist as the expert put it, definition of market, is the decisive thing here.

Now, someone may say in reply, “Well, what effect are you giving then to taking the word “community” out?”

And I would say, “We were giving two effects”.

One is that the bill would longer be applicable to a merger between two little fellows in a single little town, that before a city can qualify as a section, it must be sizable enough to have some interstate or national significance.

Felix Frankfurter:

And could have an interstate if it isn’t — in relation to interstate commerce, it isn’t within the statute anyhow.

Archibald Cox:

When I said interstate, I didn’t mean that I should have confined myself to national and not used the word interstate.

It wasn’t — I didn’t mean to emphasize across state line.

I meant that it was of national importance.

Second, we think in this case that it is permissible to consider the fact that not just one retail trade area is included but that a number of retail trade areas are included.

The 138, by our computation and according to the evidence because the question after all must have been whether the lessening of competition in a line of commerce was of enough importance for Congress to take note of it.

The argument that a single city and its environment cannot be a section would prove too much.

It would prove that there was no intention to have this amendment applied to retailing at all.

And that is of the slightest evidence that that was the — in the mind of Congress or was the purpose.

In other words, I think in what my argument comes to in the obstacle I have to get over is that if you can add these together, the section is not something with a single outline on the map.

It becomes more a functional concept, a concept of importance to the whole country rather than a matter of drawing a line on the map that could be called a section.

Potter Stewart:

Are these 138 cities in — in —

Archibald Cox:

They’re scattered all over.

Potter Stewart:

— located in — located in every geographic region of the country?

Archibald Cox:

They’re scattered all over the country whether they’re — and every one would —

Potter Stewart:

Well —

Archibald Cox:

— depend a little bit (Voice overlap) —

Potter Stewart:

— that would be a matter of definition, but they are all over?

Archibald Cox:

Yes.

They’re all over the country.

There’s no — no doubt about that.

Felix Frankfurter:

Mr. Cox, you’ve told us a lot about congressional history and you’ve talked about the mind of Congress.

Does Congresses mind express or tell us from the legislative history on this change in the face of —

Archibald Cox:

Well, in the — it’s — the expression is in the passage I read just a minute ago.

Felix Frankfurter:

I mean, did the report say anything why they made it?

Archibald Cox:

Yes —

Felix Frankfurter:

I meant the specific —

Archibald Cox:

The report says two things.

First, it said that it did not wish to impede mergers between two little concerns in a single town.

Felix Frankfurter:

I thought —

Archibald Cox:

Second, it goes on as set forth, I read it at pages 79, 80 —

Felix Frankfurter:

I thought it was your extrapolation from —

Archibald Cox:

It’s on pages 79 and 80 of our brief.

Felix Frankfurter:

Well, thank you.

Archibald Cox:

I would like now, if I may, because I think that is simply a point that I can’t add to the test that we got over, it seems to me that what we say is consistent with the interpretation of the statute in light of its purposes.

I would like now, if I may, to go back to the question of the vertical combination between one of the dominant firms, manufacturing facilities and the major independent remaining outlet in the country.

I had pointed that the outlet buys 1.7% of all men’s shoes, 1.5%, I think it is of all the children’s, and a smaller percentage of — no, I got it wrong — 1.7 of women’s, 1.5 of children’s and a much smaller percentage of all men’s shoes.

The claim is that by putting these together, Brown is foreclosing selling opportunities for other manufacturers and thus, substantially lessening competition in the manufacturer’s market.

Now, they sell all over the country, this problem about “section of the country” does not arise in connection with the manufacturers’ market.

With respect to what is the appropriate line of commerce, I suggest that before looking at the evidence, we consider, why does one look at the line of commerce?

And the reason as I see it is, is that it bears out of the section of substantiality.

Archibald Cox:

Substantiality is a matter of relative as well as absolute size.

And to determine the relative size of the Kinney market, you have to decide in what line of commerce or what market set Kinney sells.

So that the — so the question of line of commerce in this part of the case boils down to the question, “What is the market in which Kinney purchases?”

The similarities and differences between Brown’s production and Kinney’s production which cover pages of the appellant’s brief are utterly irrelevant because we’re concerned with the vertical, not a horizontal merger.

Now, this one other respect in which the distinctions between Brown’s production and Kinney’s purchases in terms of style, price and so forth, may be important.

The differences may bear on the extent to which Brown can fill Kinney’s needs.

And that in turn, of course, would bear on the question whether this may substantially lessen competition.

But in terms of the market in which Kinney buys, I simply submit that if you look at the range in which Kinney buys, which you will conclude that the only possible way of describing it is men’s, women’s and children’s shoes that it covers such a broad price range, the figures are in the brief, that there isn’t any other way of putting it and that the propriety of doing that is emphasized by the testimony I mentioned earlier about what ultimately happens on the retail and after the shoes were passed through Kinney.

John M. Harlan II:

(Inaudible)

Archibald Cox:

Then you would find that Kinney buys 1.3.

Indeed, the Government’s original argument was that you should take shoes in general.

John M. Harlan II:

That was rejected?

Archibald Cox:

That was rejected and it was narrow.

Of course, I should say that I don’t quite understand why Mr. Dean wishes to narrow the line of commerce.

If he does, he hasn’t ever stated what his line of commerce is because the more you narrow the line of commerce, while you may find that this little effect in some lines, you will find that there’s a much bigger effect in others.

For example, if you said that the line of commerce involved here was women’s shoes to the middle and low income groups, that Kinney’s proportion would rise a great deal, so would Brown’s because neither of them sells the expensive shoe.

And if you narrow it down to a particular price line, you will, without taking the time, find some price line in which Kinney has not 1.7% of the women’s shoes but 3% of the women’s shoes, and Brown could make them.

And the statute says, “In any line of commerce” so that while we think that the District Court’s findings were right, we think that any narrowing would lead to the conclusion that we had a stronger case with respect to some particular line although not to others.

So I come then to the question whether the combination is, one, the effect of which maybe to lessen competition.

As I pointed out earlier, this is in terms of function just like the du Pont General Motors case, and the thesis here is much like the thesis in the du Pont General Motors case, it rest as was in the Columbia Steel case upon the very high probability that a subsidiary will deal only with its parent for goods that the parent could fragment.

And what the other manufacturers in the industry are concerned about, the Government is considered about is that Brown will take over these markets.

Now, can Brown manufacture the shoes needed by Kinney?

In the first place, I should point out that the tables in the back of the appellant’s briefs are highly misleading, if they are intended to bear on this point — if you would turn, for example, to page 7 (a), the next to the last page in Mr. Dean’s main brief, you will find that he has set forth the percentage distribution of Brown’s production — using Brown’s at the various price ranges, using Brown’s production as the total universe and the percentage distribution of Kinney purchases using all Kinney’s purchases as the total universe.

With comparing percentages with percentages, doesn’t give you any indication worthwhile at least of the extent to which Brown’s volume of production are types of shoes it produces are such as Kinney would normally find.

Take for example, just about in the middle of the chart, the manufacturers’ price range, — $5.40 down to $4.81.

And the figures set forth, there are 18.9% of Brown’s production is in that range and 31% of Kinney’s purchases are in that range.

Now, if you use absolute numbers, Brown produces 640,000 pairs of shoes, men’s shoes other than work in that range and Kinney buys 113,000.

So Brown can make all the shoes Kinney would want in that price range so far as price range is bare on this, without any convergence or change whatsoever.

This is one illustration.

Others are equally dramatic, others show that Brown could make only part.

Archibald Cox:

Measured by the existing overlap at 1955 prices, Brown could supply 35% of the men’s shoes needed by Kinney, 30% of the women’s shoes and 50% of the children’s.

But we think the figures should be pushed a great deal higher than that.

In the first place, Brown can adapt its production to Kinney’s needs.

It’s makeup division, which Mr. Dean tells us he’s losing money, sold 19,000,000 shoes in 1950 and 34,000,000 shoes in 1956.

Apparently there, he could’ve possessed in losing money as they thought it would.

The makeup division is the one that sells manufacturers’ other brands.

Brown opened 18 new factories between 1945 and 1955.

When you open a new factory, of course, you have a chance to put in new machinery and to hire a new work force and this problem of piece rates doesn’t get involved at all.

It made 13 major changes in machinery in the five year period, 1951 to 1955, again, this sort of thing that lends itself to the adaptation of your production facilities to your market.

And there was from manufacturers, a great deal of — well, there was testimony — ample testimony that supports for the District Court’s finding that manufacturers are able to convert their production to somewhat different lines up or down.

It is true that the habits of workers in working at a certain piece rate tend to impose some restraint provided you don’t open a new factory or put in entirely new machinery.

But at the same time, as these manufacturers explain, there are ways and terms of the kind of material you used, the way you have cut it, and other ways of manufacturing for a particular market.

Furthermore, it should be pointed out that there was a drawing together to train Brown’s price ranges at Kinney’s because Kinney was beginning to upgrade as it went into the suburban markets.

And Brown was also seeking to emphasize the new markets in the suburban areas.

And in those areas, their lines would naturally tend to merge without any convergence of the machineries.

Would Brown take over Kinney’s purchases?

Well, we know something about what would happen from the past.

Brown had acquired other firms.

The appellants at page 188 of their brief make a good deal of the fact that when Brown purchased Wetherby-Kayser, Wetherby-Kayser kept on purchasing from other manufacturers.

They set forth their purchases from other manufacturers.

No, I guess their total purchases and down below it, the purchases from other manufacturer.

You might be interested in writing in under the purchases from all manufacturers.

The purchases from Brown, 28,801 in 1951, before the merger, 23,144 in 1952, the year of the merger, 137,958 in 1953, after the merger, 1954, I can’t find, 1955, 282,000 in 1957.

In other words, Wetherby-Kayser’s purchases from Brown in those five years increased 10 fold whereas the purchases as a total had only doubled, so that there’s a marked tendency.

I pointed out just before the recess in answer to a question from Justice Whittaker that this same kind of thing had happened, when Brown took over Wohl.

Wohl’s total purchases between 1950 and 1957 increased 60%.

Wohl’s purchases from Brown increased from 2,800,000 to 12,000,000 or 320%.

Brown had been in 1950, doing it quickly, something more than 10% of Wohl’s total purchases and it increased to something more than 33% of Wohl’s total purchases.

In our brief, we have pointed out that there was the same drawing together of purchases and sales between companies within the unit when Brown took over Regal.

Now, so far as Kinney is concerned, Brown is taking over the Kinney purchases.

Archibald Cox:

And I think that in measuring their effect, one should note first that this isn’t the beginning of the merger and second that this has been a litigation all the time.

Nevertheless, Brown had made no sales to Kinney prior to the merger.

The next year, 8% of all Kinney’s purchases came from Brown.

Brown had already become Kinney’s largest single supplier.

Adding what had happened in the case of other firms, to what had happened in the beginning, in the case of Kinney, and to the probabilities that a manufacturer would use, so far as possible, it’s own captive outlet.

It seems to us that it is certainly fair to conclude here that there will be a tendency for Brown to foreclose the Kinney market to other manufacturer.

Now, this is isn’t just something that we’ve thought of.

The President of Brown in buying Kinney had this very thing in mind.

He was asked when he was testified that what was your primary purpose in acquiring the stock of Kinney’s.

It was our feeling in addition to getting a distribution into a field of crisis which we were not covered, was also the feeling that if Kinney moved into shopping centers in these freestanding stores, they were going into a higher income neighborhood.

And they would probably find the necessity of upgrading and adding additional lines to their very successful operation that they have been doing.

And it would give us an opportunity we hope to be able to sell them in that category.

John M. Harlan II:

What page is this?

Archibald Cox:

This is page 1323 of the record.

We hope to be able to sell them in that category, and this was stated in answer to the question, “Why did you acquire Kinney?”

It’s on that evidence that we think that the Court was amply justified in finding that this may tend to lessen competition in manufacturers’ selling opportunities.

Then we come to the question whether the segment of the market is foreclosed.

1.7% in the case of women’s shoes, about that for children, and less for men’s, is substantial.

What is substantial is of course not simply a quantitative method.

But I think that it’s worth pointing out that we are talking about 6.4 million pairs of shoes a year at a cost of $16,000,000 almost $17,000,000.

This acquisition, since substantiality is a matter of relative size as well as absolute size, was an acquisition by one of the giants.

It would have a considerable effect at other manufacturers.

Kinney’s purchases, just to indicate this, equal to the total output of the seventh ranking firm.

It’s the production — it equals the production of 12 average-size manufacturers in the industry.

Now, of course, that isn’t the way the sales were distributed and it doesn’t take the loss of all your production.

Virtually, to ruin a manufacturer.

If you assume that the sudden loss from a tenth to a fifth of the manufacturers’ market we’re enough to a very seriously injury, and that Kinney’s sales were distributed, somewhat that way, the number affected, if all Kinney’s purchases were taken over by Brown would come into at least 65 or 100 of the remaining manufacturers in the industry.

Note too, that this is in an industry in which the market is already trending to our concentration.

The number of plants operated by the big four went up 35% in the period 1950 to 1956.

The number of plants operated by Brown rose 62%.

Archibald Cox:

The five largest manufacturers had already acquired 19 independent manufacturers.

Between 1947 and 1954, the number of independent, I guess I pointed this out this before, had declined 10%, and from 1954 to 1958, another 10%.

This easy entry to the industry is theory.

It was an unanswered question, the United Shoe Company witnesses were not able to testify to more than one or two people who had entered and they’d been backed before 1950.

I wonder, Mr. Chief Justice, if I might have just two minutes to —

Earl Warren:

You may.

Archibald Cox:

— finish off this point.

Earl Warren:

You may.

Archibald Cox:

I think that’s all it will take.

Earl Warren:

You may.

Archibald Cox:

The processes of vertical integration were already narrowing the market for independent manufacturers.

Between 1950 and 1955, the big six manufacturers had purchased 13 retail chains with 13,000 outlets.

Between 1948 and 1954, I’m sorry these jumped around so in the years but those were the figures that were available, the percentage of stores owned by chains with 101 stores or more increased 62% so that by the time of the merger, they constituted 33% of all shoe stores, again, evidence of the concentration of buying power in the manufacturer’s market.

The franchise program was growing very rapidly, as I pointed out earlier.

Between 1945 and 1956, the big six manufacturers increased their own owned-and-operated outlets and this leaves out the franchise dealers from 14,000 to 38,000, a 170% increase.

Other manufacturers were pursuing this same policy.

Indeed, one of the basic problems is that this is a self-feeding reaction.

When Brown who had been selling shoes in Los Angeles through the (Inaudible), found that the (Inaudible) had been bought up by one of the other big manufacturers, Brown rushed in and bought Wetherby-Kayser.

When Florsheim was brought up by one of the other three big manufacturers, Brown rushed in and bought up Regal.

And indeed, the nature of this interplay or chain reaction was explained by Brown’s president in a statement in 1955, which I think chose that this process is likely to continue unless it is stopped here.

My view point can pretty well be summed up like this, “One of our objectives in acquiring retail stores is to protect and guarantee distribution of our products in areas where independent retailers could not give our brands adequate distribution because of their affiliations with other branded manufacturers.”

The gist of the case, as we see it, is that when you take this trend, that if is allowed to continue that this market will cease to be open and competitive to all manufacturers and characterized by a lot of small manufacturers and that in this industry, the opportunities for the small businessmen, as unhappily they have in others, will be lost.

Now, I would just stress one sentence and that is —

Earl Warren:

You may — you may take two or three minutes more.

And I will give Mr. Dean the same amount of time of course?

Archibald Cox:

The other point which I won’t take time to emphasize in full, thank you Mr. Chief Justice, is that when you note the effect through the vertical integration in the manufacturers’ market and note the effect of the horizontal integration in the retail market, and add them together, that they then concentrate economic power and give the combination a leverage, a power in the market that puts everyone else, those independent, at such a disadvantage that even if they were not a violation of Section 7, looking at these things independently, the total effect would most surely be a substantial lessening of competition.

And all we have to show is that it may substantially lessen competition.

Now those advantages are outlined in our brief, and I think really, I shouldn’t address this any longer on the Court’s time.

Thank you.

Earl Warren:

Mr. Dean, you may have a few moments extra also.

Arthur H. Dean:

Mr. Chief Justice, and may it please the Court.

I realized that the figures in this case are very large.

And I realized they are very difficult to carry in your mind by understanding — the Solicitor General said that the manufacturers acquired some 13,000 outlets.

I believe, according to their brief, it should be 1,300.

And that the manufacturer’s own increase should go from 1,400 and not 14,000.

Archibald Cox:

Oh, you’re correct.

Arthur H. Dean:

It’s very difficult, I realized to carry all these figures.

I would like to reply if I may to Mr. Justice Frankfurter’s inquiry to me as to the specific findings of the District Court to which we take exception.

Other than the judgment, and the final judgment, there were no specific detailed findings.

Felix Frankfurter:

Are you challenging the opinions?

Arthur H. Dean:

We challenge the opinion.

Felix Frankfurter:

They are scattered in the opinion.

Arthur H. Dean:

They are scattered in the opinion.

According to the undisputed evidence between the Government and ourselves, the Brown’s percentage in manufacturing (Inaudible) and pairs in 1955 was 4% and Kinney was four-tenths so, 1%.

The Court used the figures of five and a half of 1%.

Although there was, as I said earlier, a detailed evidence by merchandising witnesses — merchandising experts, the Court made no effort whatsoever to analyze the impact of the retail competition in market by market.

There was no attempt to analyze what the market was in any particular situation as to where people shop, as to how they shopped, as to the whether — our witnesses testified that they stayed in the same price ranges and that they did not normally go beyond certain areas.

The Court, without analyzing that evidence in any of the cities, without going into it any detail, without attempting to find what the actual practices were merely said conclusory that with every shoe store in the same city was in competition with every other shoe store in the same city, and that every shoe store without regard to price or quality or use of merchandize was in competition with every other shoe in the categories of men’s, women’s and children’s.

We believe that it is required by in any economic analysis or any legal analysis or the decisions of this Court as to what is a line of commerce, and I believe it must be a line of commerce and in the “section of the country” that there must be a detailed analysis of the impact of competition in a line of commerce found from the evidence in a community.

Now, there isn’t anything — there isn’t anything in the court’s opinion that indicates any connection whatsoever between this 141 cities of 10,000 or over and yet they’re immediately contiguous in any other state (Voice Overlap) —

Potter Stewart:

By the nature of things, Mr. Dean, retailed sales are made in metropolitan communities?

They’re not made out in the woods or in the farms somewhere?

Arthur H. Dean:

That is — that is correct, Mr. Justice Stewart, but they’re not made nationally.

Retail sales are not made all over the United States.

It depends upon your climate.

The same type of shoe is not sold in Florida as is sold in Maine, the same price range is not sold —

Potter Stewart:

Well, we will go to the line of commerce point.

Arthur H. Dean:

Yes.

Potter Stewart:

But, I’m — I thought you were now addressing yourself to the “section of the country” point.

Arthur H. Dean:

No, I said you had to have a —

Potter Stewart:

Both.

You had to have both.

Arthur H. Dean:

You had to have both.

But I believe that the testimony is very clear that there’s a vast difference in the economic incomes of the various cities and the prices ranges in these various cities.

The type of competition, the type of shoes that will be bought in Fort Worth, Texas would be quite different than the type of shoes that would be bought in Wilshire Boulevard in Hollywood.

Tom C. Clark:

What were the effects?

What were the effects of the merger?

Arthur H. Dean:

Well, it isn’t clear, Mr. Justice Clark.

He takes these 141 cities in which Fort Worth is included and simply says that he takes each of the 141 cities of 10,000 or over and immediate or contiguous area.

But there’s nothing further.

Tom C. Clark:

Do you think — do you think Texarkana would be — Fort Worth would be affected under that?

Arthur H. Dean:

It could be.

I believe that there were proper evidence given to it, but there was no analysis of it.

There wasn’t any attempt whatsoever made in the opinion to analyze the impact of competition in any one of these cities or how the competition in any one of these cities related to the other 140.

Tom C. Clark:

(Inaudible)

Arthur H. Dean:

Well, I think — I think what Congress meant from the testimony was what we contented for and I believe what most people thought that they meant was in a standard metropolitan area in which there would be normal competition, that is the Government separates out, for example, the City of Texarkana and gives all of its figures for that political boundaries of that city.

Now, everyone knows that Texarkana is within the general shopping range of — of another larger city in Texas, just as they know that the (Inaudible) is within the larger shopping center of Omaha.

So that if you take all these figures for a very small political unit, as the Government tries to do, ignoring the fact that it’s right next to a very large metropolitan area, you can get some terrific distortions as they do in these appendices that they put in their reply brief.

In their appendices, they rely on the 1958 census which were not available till 1961 and were not introduced into evidence.

And they tried to take peerage figures without any regard to the discrepancies in income throughout, and then they get some terrific distortions which we point out at considerable length in our reply brief.

Tom C. Clark:

Do you think the (Inaudible)

Arthur H. Dean:

I believe that in certain types, it could be in 10,000 population, but I would think it also have to have evidence as to whether that city was primarily a shopping area all onto itself or whether withdrew a certain percentage of its shopping from a surrounding area.

Tom C. Clark:

(Inaudible)

Arthur H. Dean:

Yes.

There were some — there were some 14 witnesses, not one who testified as to retailers.

And they all testified that depending upon each city, they testified as to the roads and the bridges and the highways as to where the shopping came from.

And they — I think the evidence is very clear that you cannot use the political boundaries of the city.

Now unfortunately, we don’t know precisely what Judge Weber meant by the immediately contiguous area.

So therefore, we don’t know whether the figures — their old figures are — the figures for the political boundaries and their figures for the standard metropolitan area, but we don’t quite know what figures you would use for this rather indefinite area of the immediately surrounding and contiguous area.

You can get some — some very astounding figures if you try to average your national sale.

Arthur H. Dean:

We point out that — that part of the Government’s own figures in a town twice the size of Dodge City, they get fewer sales of shoes per capita.

We also point out some other probably fantastic distortions that they get from these appendices that put it in their reply brief.

Potter Stewart:

The point there would be the Dodge City draws on a large area for its customers and some other suburb in New York which maybe, too, twice the size of Dodge City draws on a much more compact group of people?

Arthur H. Dean:

Well, on the — in the —

Potter Stewart:

I suppose in certain — in certain lines of commerce, Denver, Colorado draws on the entire area, the entire rocky mountain area.

Arthur H. Dean:

Yes, it would.

Potter Stewart:

It’s that whole section —

Arthur H. Dean:

It would for certain type of shoes, Mr. Justice Stewart.

There are certain people in the shoes, let’s say, 1295, 1495, 1695 would go long distance as for their shoes.

The evidence in the record is however that for people who shop within the popular price stores of Kinney that they generally don’t go more than a few blocks for the purchases of their shoes.

William O. Douglas:

I noticed that on page 48 of your reply brief, you state this, “Appellee concedes that the merger of Brown and Kinney’s manufacturer does not violate Section 7.”

I’ve been looking for that — for that concession, I’m unable to find it.

Can you put yours —

Arthur H. Dean:

Yes.

Yes, Mr. Justice Douglas, it’s on page 54 of the — of the Government’s main brief.

In the second paragraph on page 54, “Appellant treats the case chiefly in terms of the manufacturing the market.

It seeks to show that Brown and Kinney do not compete because they have as a matter of fact different lines of shoes.

This now just as might be appropriate, if there were any issue concerning the effect of the combination upon competition for Brown and Kinney as manufacturers.

The District Court found however that the merger would only slightly affect that kind of competition.

The Government accepts that finding.

Since there wasn’t any finding of any substantial lessening of competition of manufacturing, I assumed that the Government accepts that finding of the District Court.

William O. Douglas:

I thank — thank you.

Arthur H. Dean:

When I was discussing the — the difference between the sales to mostly to these younger dealers who started in the business on this Wohl Plan account with a minimum amount of capital and where they, after taken out their salaries and expenses, remitted the weekly proceeds.

I used the term “sales on consignment.”

I should not have used that term because I find that title actually passes in the sales to those dealers on the Wohl plan account.

On the question of this increase of Kinney — of Brown sales to Wohl after it acquired Wohl, I like to say that most of the acquisitions prior to Wohl were very minor and in many instances were caused by debts or some cases bankruptcy and where the manufacturing plants were taken over with request of Chambers of Commerce or labor people.

But on page 185 of our main brief, second full paragraph, I point out that Wohl’s purchasers from its outside shoe suppliers other than Brown have risen from 20,900,000 in 1951, and 23,886,000 in 1957 so that Wohl’s purchasers from its outside shoe suppliers.

Several years later replaces much as its shoe purchasers from Brown and it’s during this same period, Wohl’s purchasers from outsiders increased from 160 to 167.

One further fact and that is that Kinney purchases most of its shoes in as very low price range for the sale in its price range.

And the Wohl however, in these leased departments, sells not only in the medium grade fields but in the, some cases, the higher grade fields.

Arthur H. Dean:

Although it’s very minimal, Mr. Justice Stewart, it could be even about 4% of the sales of men’s shoes in the leased departments, it possibly could be that some of them might be selling in the same price range as Regal.

I think it would be minimal but it might be possible.

From the total number of outlets, 70,000, all shoes, Kinney and — and Brown combined would only be 0.91% of these total 70,000 outlets.

There were no witnesses who testified as to any possibility of their being — their sales to Kinney being displaced by Brown.

The sole and only witness, there was only one is in Government’s Exhibit 251.

That question was not asked by the Government.

And there isn’t testimony of any witness or of any implication, incidence of any such testimony.

I just, again, to put Kinney into perspective, its sales and retail were 41,000,000.

Now, it is in this lower the price field.

But the serious sales at retail were 104,000,000. Edison Brothers, all women’s, 87,000,000.

Kinney was 85,000,000 and there’s testimony that the famous bar store was the largest — with eleven departments, the largest retail outlet west of the Mississippi River, and the Montgomery Ward was 41,000,000.

All of these are larger than Kinney’s.

The court, seemed to us, erred in using the substantive measure.

As the Court knows this was not used by Judge Higgs (ph) in the American Crystal Sugar case or the Transamerica case or by the Federal Trade Commission in the Pillsbury case.

It answered one question, Mr. Justice Whittaker, on these wholesale sales of Wohl — 75% of Wohl’s wholesale sales are made to dealers who are not on the Wohl Plan or were not on the Wohl Plan and 25% are made to those on the Wohl Plan.

I would like to call the Court’s attention in conclusion to our reply brief in answer to these appendices of the Government and to the fact that we believed that these appendices include what are wholesale sales to the independent dealers and the retail sales of those same dealers and to what they’re trying to — therefore the numerators and the denominators are in inconsistent basis and they’re trying to compare apples and bananas with oranges.

In conclusion, may it please the Court, we submit that there was complete failure to analyze the evidence on the part of the District Court.

The Government has accepted the fact that there was no substantial lessening of competition in manufacturing.

And we believe that our briefs and the evidence will conclusively show that there was no substantial lessening of competition in the retail field or in the manufacturing and retail field combined.

Earl Warren:

Mr. Dean, on your opening argument, Mr. Justice Harlan asked you the question as to jurisdiction namely, whether — whether you thought this case was properly here under — under 25 U.S.C Section 29, and I wondered if you and the Solicitor General would be willing to submit a memorandum to us on that score.

Arthur H. Dean:

Yes, Mr. Chief Justice.

Earl Warren:

Would you that please?

Arthur H. Dean:

Yes.

Earl Warren:

So that there won’t be any misunderstanding, I’m going to ask Mr. Justice Harlan, if you will restate the question because he’d like it to have it.

John M. Harlan II:

Well, I wonder if I could restate it because the Solicitor General’s answer doesn’t satisfy me, that is the answer.

My problem is this, whether or not in view of the fact of this decree, although in paragraph 1, undertook to order an unqualified divestiture, nevertheless, goes on to say in paragraph 4 that the divestiture is to be subject to approval of the court on notice by parties in submission of the plan, whether an appeal at this stage satisfies the particular requirements of 15 U.S.C. in Section 29.

It is perfectly true and what the court said as to the purpose of that Section at page 558 of 279 U.S. United States, California.

While it is perfectly true as the Solicitor General says that ordinarily an appeal to the Court of Appeals in an equity case is reviewable whether — even though its interlocutory, that is by reason of the particular provisions of Section 28 992 (a) and Section 15 U.S.C. 29 which lays the foundation for this appeal excludes in Government antitrust cases the application of that Section which the Solicitor General, I presume had in mind, in appeal to Government in antitrust cases.

I don’t know what the answer is.

That’s my problem.

Arthur H. Dean:

We would be very happy to submit a memorandum on that point.

Earl Warren:

Mr. Justice Frankfurter would like to add an addendum to it.

Felix Frankfurter:

I would like to add if considered whether assuming it cannot be brought here under Section 29 directly, whether it can be brought to — whether the case can be transferred to the Court of Appeals on this record, or whether neither this Court nor the Court of Appeals has jurisdiction.

Arthur H. Dean:

(Inaudible)

Earl Warren:

Thank you gentlemen.