Mr. HANSEN. You mean legal action? The CHAIRMAN. Legal action. Mr. KILGORE. It has never been filed in court, sir. The CHAIRMAN. Was any action taken in the courts? Mr. KILGORE. No, sir, nothing had been filed in court because we were waiting trying to get authority to go ahead on the entire proceedings. The CHAIRMAN. And the proceedings in the courts were taken in October of this year, 1957. Mr. KILGORE. That is correct. The CHAIRMAN. So despite the fact that you have made recommendations in August 1955, despite the fact that you alerted your superiors to certain problems, no formal proceedings were taken in the courts until October 1957, which incidentally was after the investigation by this committee got started. Mr. KILGORE. Mr. Chairman, may I make one statement on that? I think the record should show that I have been in the Antitrust Division for something over 10 years now, and I know from past experience that matters as complex and as important as this, you cannot work them up overnight. You are not authorized, lightly authorized, to take action in court on these matters. I do not consider it at all that there had been any undue delay in passing upon the recommendation that we submitted. Mr. KEATING. You have been there 10 years. Mr. KILGORE. Yes, sir. Mr. KEATING. Has there been more activity the last 5 or the first 5 in this field? The CHAIRMAN. That question is irrelevant. Mr. KEATING. I think it is very material. The CHAIRMAN. The question is out of order. The CHAIRMAN. No, you are not, not that question. Mr. KEATING. I am going to make it anyway. You charged the head of the Antitrust Division in so many words with not handling his job properly. The CHAIRMAN. I did not say that at all. This man is a subordinate and is not under any accusation from me at all, none whatsoever. Mr. KEATING. You have accused the head of the department of not doing his job the way he should. The CHAIRMAN. I am not accusing anybody. You accused maybe, I didn't accuse. Mr. KEATING. You have charged him in so many words in the record today. The CHAIRMAN. Who? Mr. KEATING. Judge Hansen, the head of the Antitrust Division, and you have stated it in the record today. The CHAIRMAN. I carried it on the record from the time you left it. You only carried it on until 1952, I think, or 1953. I simply carried it on. We will adjourn the meeting and we will meet tomorrow morning at 10 o'clock. Mr. KEATING. The meeting is not adjourned until I have completed my statement. The CHAIRMAN. I will be courteous to the gentleman, but ask him to be very brief becouse if there are vituperative remarks, I will have to adjourn the meeting. Mr. KEATING. The chairman has produced here a witness in the person of one of the assistants in the Antitrust Division in an effort to show that the Antitrust Division has not properly handled these oil cases in this consent decree. I am asking him what I consider a legitimate question, whether there has been more activity in this field in the last 5 years than in the 5 preceding? I think it is a perfectly proper question. I think it is perfectly obvious what the answer is but if the chairman objects to the question being asked I will have to abide by the ruling. The CHAIRMAN. Because that will give rise to a lot of other questions which I could ask and I don't want to prolong the hearing and the question is out of order. Mr. Chaffetz? TESTIMONY OF HAMMOND E. CHAFFETZ, SERVICE PIPE LINE CO. Mr. CHAFFETZ. Mr. Chairman, may I make a very brief statement? I am Hammond E. Chaffetz representing the Service Pipe Line Co. We are in the awkward position here of being tried in a verbal contest between the members of the committee and the Department of Justice. The CHAIRMAN. You are a witness on Thursday. Mr. CHAFFETZ. Yes; I want to say this, Thursday is 48 hours from now and there were a lot of implications this afternoon, imputations, characterization of our documents which we have freely and voluntarily handed to you. The CHAIRMAN. What was that last, Mr. Chaffetz? Mr. CHAFFETZ. Documents which we freely handed to your committee. I think I am repeating what you yourself have said. All I want to say is I hope the members of the committee will reserve judgment and I hope the public, too, about these imputations, characterizations, statements about the way we carried on our activities and our books. We disagree very heartily and strongly with some of the language used and observations made and particularly characterization of our records. The CHAIRMAN. We will let you testify on Thursday. Mr. CHAFFETZ. I just want the record to show that we make that objection and we ask you to reserve judgment until Thursday. Thank you, sir. The CHAIRMAN. We will now adjourn and meet tomorrow morning at 10 o'clock when we will hear witnesses from the Interstate Commerce Commission. (Whereupon, at 4: 10 o'clock the hearing was recessed to reconvene at 10 a. m., Wednesday, October 23, 1957.) REPORTS TO THE ATTORNEY GENERAL STANOLIND PIPE LINE CO., The honorable the ATTORNEY GENERAL of the UNITED STATES, DEAR SIR: Under the provisions of the final judgment in the case of United States of America v. The Atlantic Refining Company, et al., civil action No. 14060, District Court of the United States for the District of Columbia, dated December 23, 1941, and known as the Pipe Line or Elkins Act decree, this company is obliged, among other things, to limit payment of dividends to shipper-owners and also to report to the Attorney General of the United States, on or before April 15 of each year, certain information with respect to the valuation of its properties, as used by it in applying its dividend limitation and its retained or frozen surplus, if any. Therefore, we submit herewith a statement consisting of two pages containing the information which Stanolind Pipe Line Co. is obliged to file with you in compliance with said judgment. Acknowledgment would be appreciated. STANOLIND PIPE LINE Co., By B. P. SIBOLE, President. STANOLIND PIPE LINE Co. Report to the Attorney General of the United States for the calendar year 1942 (civil action No. 14060) 1. Adjusted valuation of property owned and used for common carrier purposes as of Jan. 1, 1942. 2. 7 percent of valuation of common carrier property. 3. Net earnings derived from transportation and other common carrier services (line No. 9, schedule No. 302, annual report form P). $63,393,994 4,437, 580 $5,943, 291 56, 619 4. Excess earnings to be transferred to surplus (line 3 less line 2).... 5. Excess earnings used under par. V: 5,886, 672 1,449, 092 (a) Extending existing or constructing or acquiring new common-car- None (b) Maintaining normal and reasonable working capital during the None (c) Retiring debt outstanding Jan. 1, 1942, which was incurred for the None None 6. Excess earnings retained (line 4 less line 5). 7. Dividends actually paid... 8. Dividends allowable in subsequent years (line 2 less line 7).. Tulsa, Okla., Apr. 9, 1943. 1, 449, 092 4,073, 050 364, 530 Adjusted valuation of property owned and used for common-carrier purposes as of Jan. 1, 1942 DEAR SIR: This is to acknowledge receipt of your letter of April 9, 1943, addressed to the Attorney General, transmitting report of your company for the year 1942, as required by paragraph VIII of the final judgment entered in the case of the United States of America v. The Atlantic Refining Company, et al., civil action No. 14060. ment. We note that for the purposes of computing permissible payments to shipperowners you used an adjusted valuation of $63,393,994. You arrived at this suggested valuation by means of the computations set forth on page 2 of the report. We wish to raise the question as to whether the adjusted valuation used by your company meets the requirements of paragraph III (a) of the judgThe decree provides that the latest final valuation as made by the Interstate Commerce Commission, adjusted for additions and betterments, depreciation ad retirements, be used as valuation for the purposes of the decree. The valuation reports of the Interstate Commerce Commission show that on December 4, 1939, the Commission handed down a decision valuing common carrier property of Stanolind Pipe Line Co. We believe that such valuation of the Commission, instead of the valuation computations used by your company, should be used as the basis of your report. We would also like to know to whom the following payments were made: Interest on long-term debt amounting to $8,544, and interest on unfunded debt amounting to $39,790. These items have been deducted from net earnings in paragraph 3 of your report. Very truly yours, TOM C. CLARK, Assistant Attorney General. STANOLIND PIPE LINE Co., The honorable the ATTORNEY GENERAL OF THE UNITED STATES, Washington, D. C. DEAR SIR: This will acknowledge your letter of April 13 with respect to our letter of April 9, transmitting report of Stanolind Pipe Line Co. for the year 1942, pursuant to the final judgment entered in the case of the United States of America v. The Atlantic Refining Company, et al., civil action No. 14060. The valuation used for computing permissible payments to shipper-owners of Stanolind Pipe Line Co. for the year 1942, was the final valuation made by the Interstate Commerce Commission in its decision valuing common-carrier property of Stanolind Pipe Line Co. as of December 31, 1934, handed down on December 4, 1939, adjusted to January 1, 1942, for additions and betterments, physical depreciation and retirements, in accordance with the methods used by the Interstate Commerce Commission in bringing valuations down to date as required in the decree. If you will review the valuation handed down by the Commission on that date, you will note that Stanolind Pipe Line Co. property, owned and used for common-carrier purposes, was found, as of December 31, 1934, to be $47,150,000; property owned but not used was $13,345,048. Substantially all of the property represented by the $13,345,048 valuation has now been returned to commoncarrier service. For your convenience, we are attaching statement showing values and amounts of common-carrier property owned and used, as determined by the Interstate Commerce Commission in its decision handed down December 4, 1939, adjusted to January 1, 1942, for additions and betterments, physical depreciation and retirements. With respect to your inquiry as to the identity of recipients of long-term debt interest payments and interest payments on unfunded debts, you are advised that the item of $8,544, representing interest on long-term debts, was paid to the following: Standard Oil Co. (Indiana) Stanolind Oil & Gas Co--- $423 Yount Lee Pipe Line Co---- 7, 254 867 The item of $39,790 representing interest on unfunded debt was paid as follows: First National Bank, Chicago, Ill., interest on note__ capital stock taxes.. $2,758 34, 754 Oklahoma Tax Commission, interest on additional State income taxes__ 2, 278 These interest payments are deducted from net earnings because they are applicable to income derived from transportation or other common-carrier services. Trusting these explanations will answer your questions, we are, Yours very truly, STANOLIND PIPE LINE C., |