MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.
This suit was initiated in November 1955 when the Government filed a civil action in the United States District Court for the Eastern District of Missouri alleging that a contemplated merger between the G. R. Kinney Company, Inc. (Kinney), and the Brown Shoe Company, Inc. (Brown), through an exchange of Kinney for Brown stock, would violate § 7 of the Clayton Act, 15 U. S. C. § 18. The Act, as amended, provides in pertinent part:
The complaint sought injunctive relief under § 15 of the Clayton Act, 15 U. S. C. § 25, to restrain consummation of the merger.
A motion by the Government for a preliminary injunction pendente lite was denied, and the companies were permitted to merge provided, however, that their businesses be operated separately and that their assets be kept separately identifiable. The merger was then effected on May 1, 1956.
In the District Court, Brown contended that the merger would be shown not to endanger competition if the "line[s] of commerce" and the "section[s] of the country" were properly determined. Brown urged that not only were the age and sex of the intended customers to be considered in determining the relevant line of commerce, but that differences in grade of material, quality of workmanship, price, and customer use of shoes resulted in establishing different lines of commerce. While agreeing with the Government that, with regard to manufacturing, the relevant geographic market for assessing the effect of the merger upon competition is the country as a whole, Brown contended that with regard to retailing, the market must vary with economic reality from the central business district of a large city to a "standard metropolitan area"
The District Court rejected the broadest contentions of both parties. The District Court found that "there is one group of classifications which is understood and recognized
Realizing that "the areas of effective competition for retailing purposes cannot be fixed with mathematical precision," the District Court found that "when determined by economic reality, for retailing, a `section of the country' is a city of 10,000 or more population and its immediate and contiguous surrounding area, regardless of name designation, and in which a Kinney store and a Brown (operated, franchise, or plan)
The District Court rejected the Government's contention that the combining of the manufacturing facilities of Brown and Kinney would substantially lessen competition in the production of men's, women's, or children's shoes for the national wholesale market. However, the District Court did find that the likely foreclosure of other manufacturers from the market represented by Kinney's retail outlets may substantially lessen competition in the manufacturers' distribution of "men's," "women's," and "children's" shoes, considered separately, throughout the Nation. The District Court also found that the merger may substantially lessen competition in retailing alone in "men's," "women's," and "children's" shoes, considered separately, in every city of 10,000 or more population and its immediate surrounding area in which both a Kinney and a Brown store are located.
Brown's contentions here differ only slightly from those made before the District Court. In order fully to understand and appraise these assertions, it is necessary to set
The District Court found that although domestic shoe production was scattered among a large number of manufacturers, a small number of large companies occupied a commanding position. Thus, while the 24 largest manufacturers produced about 35% of the Nation's shoes, the top 4—International, Endicott-Johnson, Brown (including Kinney) and General Shoe—alone produced approximately 23% of the Nation's shoes or 65% of the production of the top 24.
In 1955, domestic production of nonrubber shoes was 509.2 million pairs, of which about 103.6 million pairs were men's shoes, about 271 million pairs were women's shoes, and about 134.6 million pairs were children's shoes.
The public buys these shoes through about 70,000 retail outlets, only 22,000 of which, however, derive 50% or more of their gross receipts from the sale of shoes and are classified as "shoe stores" by the Census Bureau.
The District Court found a "definite trend" among shoe manufacturers to acquire retail outlets. For example, International Shoe Company had no retail outlets in 1945, but by 1956 had acquired 130; General Shoe Company had only 80 retail outlets in 1945 but had 526 by 1956; Shoe Corporation of America, in the same period, increased its retail holdings from 301 to 842; Melville Shoe Company from 536 to 947; and Endicott-Johnson from 488 to 540. Brown, itself, with no retail outlets of its own prior to 1951, had acquired 845 such outlets by 1956. Moreover, between 1950 and 1956 nine independent shoe store chains, operating 1,114 retail shoe stores, were found to have become subsidiaries of these large firms and to have ceased their independent operations.
And once the manufacturers acquired retail outlets, the District Court found there was a "definite trend" for the parent-manufacturers to supply an ever increasing percentage of the retail outlets' needs, thereby foreclosing other manufacturers from effectively competing for the retail accounts. Manufacturer-dominated stores were found to be "drying up" the available outlets for independent producers.
Another "definite trend" found to exist in the shoe industry was a decrease in the number of plants manufacturing shoes. And there appears to have been a concomitant decrease in the number of firms manufacturing shoes. In 1947, there were 1,077 independent manufacturers of shoes, but by 1954 their number had decreased about 10% to 970.
Brown Shoe was found not only to have been a participant, but also a moving factor, in these industry trends. Although Brown had experimented several times with operating its own retail outlets, by 1945 it had disposed of them all. However, in 1951, Brown again began to seek retail outlets by acquiring the Nation's largest operator of leased shoe departments, Wohl Shoe Company (Wohl), which operated 250 shoe departments in department stores throughout the United States. Between 1952 and 1955 Brown made a number of smaller acquisitions: Wetherby-Kayser Shoe Company (three retail stores), Barnes & Company (two stores), Reilly Shoe Company (two leased shoe departments), Richardson Shoe Store (one store), and Wohl Shoe Company of Dallas (not connected with Wohl) (leased shoe departments in Dallas). In 1954, Brown made another major acquisition: Regal Shoe Corporation which, at the time, operated one manufacturing plant producing men's shoes and 110 retail outlets.
The acquisition of these corporations was found to lead to increased sales by Brown to the acquired companies. Thus although prior to Brown's acquisition of Wohl in 1951, Wohl bought from Brown only 12.8% of its total purchases of shoes, it subsequently increased its purchases to 21.4% in 1952 and to 32.6% in 1955. Wetherby-Kayser's purchases from Brown increased from 10.4% before acquisition to over 50% after. Regal, which had previously sold no shoes to Wohl and shoes worth only $89,000 to Brown, in 1956 sold shoes worth $265,000 to Wohl and $744,000 to Brown.
During the same period of time, Brown also acquired the stock or assets of seven companies engaged solely in shoe manufacturing. As a result, in 1955, Brown was the
Kinney is principally engaged in operating the largest family-style shoe store chain in the United States. At the time of trial, Kinney was found to be operating over 400 such stores in more than 270 cities. These stores were found to make about 1.2% of all national retail shoe sales by dollar volume. Moreover, in 1955 the Kinney stores sold approximately 8 million pairs of nonrubber shoes or about 1.6% of the national pairage sales of such shoes. Of these sales, approximately 1.1 million pairs were of men's shoes or about 1% of the national pairage sales of men's shoes; approximately 4.2 million pairs were of women's shoes or about 1.5% of the national pairage sales of women's shoes; and approximately 2.7 million pairs were of children's shoes or about 2% of the national pairage sales of children's shoes.
In addition to this extensive retail activity, Kinney owned and operated four plants which manufactured men's, women's, and children's shoes and whose combined output was 0.5% of the national shoe production in 1955, making Kinney the twelfth largest shoe manufacturer in the United States.
Kinney stores were found to obtain about 20% of their shoes from Kinney's own manufacturing plants. At the time of the merger, Kinney bought no shoes from Brown;
It is in this setting that the merger was considered and held to violate § 7 of the Clayton Act. The District Court ordered Brown to divest itself completely of all stock, share capital, assets or other interests it held in Kinney, to operate Kinney to the greatest degree possible as an independent concern pending complete divestiture, to refrain thereafter from acquiring or having any interest in Kinney's business or assets, and to file with the court within 90 days a plan for carrying into effect the divestiture decreed. The District Court also stated it would retain jurisdiction over the cause to enable the parties to apply for such further relief as might be necessary to enforce and apply the judgment. Prior to its submission of a divestiture plan, Brown filed a notice of appeal in the District Court. It then filed a jurisdictional statement in this Court, seeking review of the judgment below as entered.
Appellant's jurisdictional statement cites as the basis of our jurisdiction over this appeal § 2 of the Expediting
It was suggested from the bench during the oral argument that, since the judgment of the District Court does not include a specific plan for the dissolution of the Brown-Kinney merger, but reserves such a ruling pending the filing of suggested plans for implementing divestiture, the judgment below is not "final" as contemplated by the Expediting Act. In response to that suggestion, both parties have filed briefs contending that we do have jurisdiction to dispose of the case on the merits in its present posture. However, the mere consent of the parties to the Court's consideration and decision of the case cannot, by itself, confer jurisdiction on the Court. See American Fire & Casualty Co. v. Finn, 341 U.S. 6, 17-18; People's Bank v. Calhoun, 102 U.S. 256, 260-261; Capron v. Van Noorden, 2 Cranch 126, 127. Therefore, a review of the sources of the Court's jurisdiction is a threshold
The requirement that a final judgment shall have been entered in a case by a lower court before a right of appeal attaches has an ancient history in federal practice, first appearing in the Judiciary Act of 1789.
In most cases in which the Expediting Act has been cited as the basis of this Court's jurisdiction, the issue of "finality" has not been raised or discussed by the parties or the Court. On but few occasions have particular
We think the decree of the District Court in this case had sufficient indicia of finality for us to hold that the judgment is properly appealable at this time. We note, first, that the District Court disposed of the entire complaint filed by the Government. Every prayer for relief was passed upon. Full divestiture by Brown of Kinney's stock and assets was expressly required. Appellant was permanently enjoined from acquiring or having any further interest in the business, stock or assets of the other defendant in the suit. The single provision of the judgment by which its finality may be questioned is the one requiring appellant to propose in the immediate future a plan for carrying into effect the court's order of divestiture. However, when we reach the merits of, and affirm, the judgment below, the sole remaining task for the District Court will be its acceptance of a plan for full divestiture, and the supervision of the plan so accepted. Further rulings of the District Court in administering its decree, facilitated by the fact that the defendants below have been required to maintain separate books pendente lite, are sufficiently independent of, and subordinate to, the issues presented by this appeal to make the case in its present posture a proper one for review now.
A second consideration supporting our view is the character of the decree still to be entered in this suit. It will be an order of full divestiture. Such an order requires careful, and often extended, negotiation and formulation. This process does not take place in a vacuum, but, rather, in a changing market place, in which buyers and bankers must be found to accomplish the order of forced sale. The unsettling influence of uncertainty as to the affirmance of the initial, underlying decision compelling divestiture would only make still more difficult the task of assuring expeditious enforcement of the antitrust laws. The delay in withholding review of any of the issues in the case until the details of a divestiture had been approved by the District Court and reviewed here could well mean a change in market conditions sufficiently pronounced to render impractical or otherwise unenforceable the very plan of asset disposition for which the litigation was held. The public interest, as well as that of the parties, would lose by such procedure.
Lastly, holding the decree of the District Court in the instant case less than "final" and, thus, not appealable, would require a departure from a settled course of the Court's practice. It has consistently reviewed antitrust decrees contemplating either future divestiture or other comparable remedial action prior to the formulation and
This case is one of the first to come before us in which the Government's complaint is based upon allegations that the appellant has violated § 7 of the Clayton Act, as that section was amended in 1950.
As enacted in 1914, § 7 of the original Clayton Act prohibited the acquisition by one corporation of the stock of another corporation when such acquisition would result in a substantial lessening of competition between the acquiring and the acquired companies, or tend to
It was, however, not long before the Federal Trade Commission recognized deficiencies in the Act as first enacted. Its Annual Reports frequently suggested amendments, principally along two lines: first, to "plug the loophole" exempting asset acquisitions from coverage under the Act, and second, to require companies proposing a merger to give the Commission prior notification of their plans.
The dominant theme pervading congressional consideration of the 1950 amendments was a fear of what was considered to be a rising tide of economic concentration in the American economy. Apprehension in this regard was bolstered by the publication in 1948 of the Federal Trade Commission's study on corporate mergers. Statistics from this and other current studies were cited as evidence of the danger to the American economy in unchecked corporate expansions through mergers.
What were some of the factors, relevant to a judgment as to the validity of a given merger, specifically discussed by Congress in redrafting § 7?
First, there is no doubt that Congress did wish to "plug the loophole" and to include within the coverage of the Act the acquisition of assets no less than the acquisition of stock.
Third, it is apparent that a keystone in the erection of a barrier to what Congress saw was the rising tide of economic concentration, was its provision of authority for arresting mergers at a time when the trend to a lessening of competition in a line of commerce was still in its incipiency. Congress saw the process of concentration in American business as a dynamic force; it sought to assure the Federal Trade Commission and the courts the power
Fourth, and closely related to the third, Congress rejected, as inappropriate to the problem it sought to remedy, the application to § 7 cases of the standards for judging the legality of business combinations adopted by the courts in dealing with cases arising under the Sherman Act, and which may have been applied to some early cases arising under original § 7.
Sixth, Congress neither adopted nor rejected specifically any particular tests for measuring the relevant markets, either as defined in terms of product or in terms of geographic locus of competition, within which the anti-competitive
Seventh, while providing no definite quantitative or qualitative tests by which enforcement agencies could gauge the effects of a given merger to determine whether it may "substantially" lessen competition or tend toward monopoly, Congress indicated plainly that a merger had to be functionally viewed, in the context of its particular
It is against this background that we return to the case before us.
THE VERTICAL ASPECTS OF THE MERGER.
Economic arrangements between companies standing in a supplier-customer relationship are characterized as "vertical." The primary vice of a vertical merger or other arrangement tying a customer to a supplier is that,
The "area of effective competition" must be determined by reference to a product market (the "line of commerce") and a geographic market (the "section of the country").
The outer boundaries of a product market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it.
Appellant, however, contends that the District Court's definitions fail to recognize sufficiently "price/quality" and "age/sex" distinctions in shoes. Brown argues that the predominantly medium-priced shoes which it manufactures occupy a product market different from the predominantly low-priced shoes which Kinney sells. But agreement with that argument would be equivalent to holding that medium-priced shoes do not compete with low-priced shoes. We think the District Court properly found the facts to be otherwise. It would be unrealistic to accept Brown's contention that, for example, men's shoes selling below $8.99 are in a different product market from those selling above $9.00.
This is not to say, however, that "price/quality" differences, where they exist, are unimportant in analyzing a merger; they may be of importance in determining the likely effect of a merger. But the boundaries of the relevant market must be drawn with sufficient breadth to include the competing products of each of the merging companies and to recognize competition where, in fact, competition exists. Thus we agree with the District Court that in this case a further division of product lines based on "price/quality" differences would be "unrealistic."
The Geographic Market.
We agree with the parties and the District Court that insofar as the vertical aspect of this merger is concerned, the relevant geographic market is the entire Nation. The relationships of product value, bulk, weight and consumer demand enable manufacturers to distribute their shoes on a nationwide basis, as Brown and Kinney, in fact, do. The anticompetitive effects of the merger are to be measured within this range of distribution.
The Probable Effect of the Merger.
Once the area of effective competition affected by a vertical arrangement has been defined, an analysis must be made to determine if the effect of the arrangement "may be substantially to lessen competition, or to tend to create a monopoly" in this market.
Since the diminution of the vigor of competition which may stem from a vertical arrangement results primarily from a foreclosure of a share of the market otherwise open to competitors, an important consideration in determining whether the effect of a vertical arrangement "may be substantially to lessen competition, or to tend to create a monopoly" is the size of the share of the market foreclosed. However, this factor will seldom be determinative. If the share of the market foreclosed is so large that it approaches monopoly proportions, the Clayton Act will, of course, have been violated; but the arrangement will also have run afoul of the Sherman Act.
Between these extremes, in cases such as the one before us, in which the foreclosure is neither of monopoly nor de minimis proportions, the percentage of the market foreclosed by the vertical arrangement cannot itself be decisive. In such cases, it becomes necessary to undertake an examination of various economic and historical factors in order to determine whether the arrangement under review is of the type Congress sought to proscribe.
A most important such factor to examine is the very nature and purpose of the arrangement.
The importance which Congress attached to economic purpose is further demonstrated by the Senate and House Reports on H. R. 2734, which evince an intention to preserve the "failing company" doctrine of International Shoe Co. v. Federal Trade Comm'n, 280 U.S. 291.
The present merger involved neither small companies nor failing companies. In 1955, the date of this merger, Brown was the fourth largest manufacturer in the shoe industry with sales of approximately 25 million pairs of shoes and assets of over $72,000,000 while Kinney had sales of about 8 million pairs of shoes and assets of about $18,000,000. Not only was Brown one of the leading manufacturers of men's, women's, and children's shoes, but Kinney, with over 350 retail outlets, owned and operated the largest independent chain of family shoe stores in the Nation. Thus, in this industry, no merger between
Another important factor to consider is the trend toward concentration in the industry.
The existence of a trend toward vertical integration, which the District Court found, is well substantiated by the record. Moreover, the court found a tendency of the acquiring manufacturers to become increasingly important sources of supply for their acquired outlets. The necessary corollary of these trends is the foreclosure of independent manufacturers from markets otherwise open to them. And because these trends are not the product of accident but are rather the result of deliberate policies of Brown and other leading shoe manufacturers, account must be taken of these facts in order to predict the probable
Brown argues, however, that the shoe industry is at present composed of a large number of manufacturers and retailers, and that the industry is dynamically competitive. But remaining vigor cannot immunize a merger if the trend in that industry is toward oligopoly. See Pillsbury Mills, Inc., 50 F. T. C. 555, 573. It is the probable effect of the merger upon the future as well as the present which the Clayton Act commands the courts and the Commission to examine.
Moreover, as we have remarked above, not only must we consider the probable effects of the merger upon the economics of the particular markets affected but also we must consider its probable effects upon the economic way of life sought to be preserved by Congress.
The District Court's findings, and the record facts, many of them set forth in Part I of this opinion, convince us that the shoe industry is being subjected to just such a cumulative series of vertical mergers which, if left unchecked, will be likely "substantially to lessen competition."
We reach this conclusion because the trend toward vertical integration in the shoe industry, when combined with Brown's avowed policy of forcing its own shoes upon its retail subsidiaries, may foreclose competition from a substantial share of the markets for men's, women's, and children's shoes, without producing any countervailing competitive, economic, or social advantages.
THE HORIZONTAL ASPECTS OF THE MERGER.
An economic arrangement between companies performing similar functions in the production or sale of comparable goods or services is characterized as "horizontal." The effect on competition of such an arrangement depends, of course, upon its character and scope. Thus, its validity in the face of the antitrust laws will depend upon such factors as: the relative size and number of the
Thus, again, the proper definition of the market is a "necessary predicate" to an examination of the competition that may be affected by the horizontal aspects of the merger. The acquisition of Kinney by Brown resulted in a horizontal combination at both the manufacturing and retailing levels of their businesses. Although the District Court found that the merger of Brown's and Kinney's manufacturing facilities was economically too insignificant to come within the prohibitions of the Clayton Act, the Government has not appealed from this portion of the lower court's decision. Therefore, we have no occasion to express our views with respect to that finding. On the other hand, appellant does contest the District Court's finding that the merger of the companies' retail outlets may tend substantially to lessen competition.
Shoes are sold in the United States in retail shoe stores and in shoe departments of general stores. These outlets sell: (1) men's shoes, (2) women's shoes, (3) women's or children's shoes, or (4) men's, women's or children's shoes. Prior to the merger, both Brown and Kinney sold their shoes in competition with one another through the enumerated kinds of outlets characteristic of the industry.
In Part IV of this opinion we hold that the District Court correctly defined men's, women's, and children's shoes as the relevant lines of commerce in which to analyze the vertical aspects of the merger. For the reasons there stated we also hold that the same lines of commerce are appropriate for considering the horizontal aspects of the merger.
The Geographic Market.
The criteria to be used in determining the appropriate geographic market are essentially similar to those used to determine the relevant product market. See S. Rep. No. 1775, 81st Cong., 2d Sess. 5-6; United States v. E. I. du Pont de Nemours & Co., 353 U.S. 586, 593. Moreover, just as a product submarket may have § 7 significance as the proper "line of commerce," so may a geographic submarket be considered the appropriate "section of the country." Erie Sand & Gravel Co. v. Federal Trade Comm'n, 291 F.2d 279, 283 (C. A. 3d Cir.); United States v. Bethlehem Steel Corp., 168 F.Supp. 576, 595-603 (D. C. S. D. N. Y.). Congress prescribed a pragmatic, factual approach to the definition of the relevant market and not a formal, legalistic one. The geographic market selected must, therefore, both "correspond to the commercial realities"
The parties do not dispute the findings of the District Court that the Nation as a whole is the relevant geographic market for measuring the anticompetitive effects of the merger viewed vertically or of the horizontal merger of Brown's and Kinney's manufacturing facilities. As to the retail level, however, they disagree.
The District Court found that the effects of this aspect of the merger must be analyzed in every city with a population exceeding 10,000 and its immediate contiguous surrounding territory in which both Brown and Kinney sold shoes at retail through stores they either owned or controlled.
We believe, however, that the record fully supports the District Court's findings that shoe stores in the outskirts of cities compete effectively with stores in central
We therefore agree that the District Court properly defined the relevant geographic markets in which to analyze this merger as those cities with a population exceeding 10,000 and their environs in which both Brown and Kinney retailed shoes through their own outlets. Such markets are large enough to include the downtown shops and suburban shopping centers in areas contiguous to the city, which are the important competitive factors, and yet are small enough to exclude stores beyond the immediate environs of the city, which are of little competitive significance.
The Probable Effect of the Merger.
Having delineated the product and geographic markets within which the effects of this merger are to be measured, we turn to an examination of the District Court's finding that as a result of the merger competition in the retailing of men's, women's and children's shoes may be lessened substantially in those cities in which both Brown and Kinney stores are located. We note, initially, that appellant challenges this finding on a number of grounds other than those discussed above and on grounds independent of the critical question of whether competition may, in fact, be lessened. Thus, Brown objects that the District Court did not examine the competitive picture in each line of commerce and each section of the country it had defined as appropriate. It says the Court erred in failing to enter findings with respect to each relevant city assessing
However, we believe the record is adequate to support the findings of the District Court. While it is true that the court concentrated its attention on the structure of competition in the city in which it sat and as to which detailed evidence was most readily available, it also heard witnesses from no less than 40 other cities in which the parties to the merger operated. The court was careful to point out that it was on the basis of all the evidence that it reached its conclusions concerning the boundaries of the relevant markets and the merger's effects on competition within them. We recognize that variations of size, climate and wealth as enumerated by Brown exist in the relevant markets. However, we agree with the court below that the markets with respect to which evidence was received provide a fair sampling of all the areas in which the impact of this merger is to be measured. The appellant has not shown how the variables it has mentioned could affect the structure of competition within any particular market so as to require a change in the conclusions drawn by the District Court. Each competitor within a given market is equally affected by these factors, even though the city in which he does business
In the case before us, not only was a fair sample used to demonstrate the soundness of the District Court's conclusions, but evidence of record fully substantiates those findings as to each relevant market. An analysis of undisputed statistics of sales of shoes in the cities in which both Brown and Kinney sell shoes at retail, separated into the appropriate lines of commerce, provides a persuasive factual foundation upon which the required prognosis of the merger's effects may be built. Although Brown objects to some details in the Government's computations used in drafting these exhibits, appellant cannot deny the correctness of the more general picture they reveal.
The market share which companies may control by merging is one of the most important factors to be considered when determining the probable effects of the combination on effective competition in the relevant market.
Other factors to be considered in evaluating the probable effects of a merger in the relevant market lend additional
At the same time appellant has presented no mitigating factors, such as the business failure or the inadequate resources of one of the parties that may have prevented it from maintaining its competitive position, nor a demonstrated need for combination to enable small companies to enter into a more meaningful competition with those dominating the relevant markets. On the basis of the record before us, we believe the Government sustained its burden of proof. We hold that the District Court was correct in concluding that this merger may tend to lessen competition substantially in the retail sale of men's, women's, and children's shoes in the overwhelming majority of those cities and their environs in which both Brown and Kinney sell through owned or controlled outlets.
The judgment is
MR. JUSTICE FRANKFURTER took no part in the decision of this case.
MR. JUSTICE WHITE took no part in the consideration or decision of this case.
Sales of women's shoes by Brown and Kinney as a share of the total city sales in selected areas (1955) _______________________________________________________________________________________ Brown Combined Total sales Kinney owned or Brown-Kinney Area (pairs) Shoe Store controlled share (%) outlets (%)* (%)* _______________________________________________________________________________________ Dodge City, Kans__________ 31,400 23.3 34.4 57.7 Texas City, Tex___________ 32,300 27.8 20.7 48.5 Council Bluffs, Iowa______ 68,200 27.3 15.4 42.7 Marshalltown, Iowa________ 72,600 21.8 13.4 35.2 Uniontown, Pa_____________ 144,900 16.3 18.8 35.1 Ardmore, Okla_____________ 62,600 14.4 20.3 34.7 Keokuk, Iowa______________ 34,600 18.4 14.8 33.2 Ottumwa, Iowa_____________ 67,200 28.2 4.3 32.5 Pine Bluff, Ark___________ 63,100 21.6 9.4 31.0 Lawton, Okla______________ 95,200 20.2 9.8 30.0 Borger, Tex_______________ 50,100 15.5 13.8 29.3 Roswell, N. Mexico________ 80,900 11.7 15.8 27.5 Topeka, Kans______________ 224,000 11.7 15.8 27.5 Coatesville, Pa___________ 46,200 17.2 10.0 27.2 Hobbs, N. Mexico__________ 50,800 22.2 5.0 27.2 Iowa City, Iowa___________ 72,200 15.3 10.7 26.0 Dubuque, Iowa_____________ 119,000 14.3 11.5 25.8 Carlisle, Pa______________ 55,500 17.5 5.9 23.4 Texarkana, Ark____________ 65,800 15.9 7.5 23.4 Fort Dodge, Iowa__________ 104,000 10.8 12.5 23.3 Steubenville, Ohio________ 207,200 14.9 8.1 23.0 Mason City, Iowa__________ 102,400 14.4 8.3 22.7 Marion, Ohio______________ 91,600 6.7 15.7 22.4 Pueblo, Colo______________ 152,400 14.1 7.5 21.6 Hibbing, Minn_____________ 44,600 18.1 3.4 21.5 Fargo, N. Dak_____________ 162,800 15.3 6.2 21.5 Franklin, Pa______________ 32,100 14.4 7.1 21.5 Corpus Christi, Tex_______ 331,500 2.4 19.0 21.4 Batavia, N. Y_____________ 75,300 13.2 8.1 21.3 McAllen, Tex______________ 90,200 13.0 8.3 21.3 Concord, N. H_____________ 57,300 15.6 4.7 20.3 Sioux City, Iowa__________ 222,000 7.7 12.3 20.0 Muskogee, Okla____________ 68,100 7.6 12.2 19.8 Rochester, Minn___________ 130,100 11.2 8.6 19.8 Bartlesville, Okla________ 63,100 15.8 3.9 19.7 Berwyn, Ill_______________ 95,900 17.8 1.9 19.7 Clarksburg, W. Va_________ 134,600 15.5 3.9 19.4 Davenport, Iowa___________ 230,300 6.4 12.8 19.2 Freeport, Ill_____________ 88,000 10.7 8.3 19.0 Grand Forks, N. Dak_______ 121,100 12.8 6.1 18.9 Muskegon, Mich____________ 172,000 4.0 14.9 18.9 Baton Rouge, La___________ 398,100 3.8 14.9 18.7 Des Moines, Iowa__________ 562,800 4.9 13.8 18.7 * The percentages in these columns reflect sales of Brown brand shoes through Brown owned or controlled outlets.
_______________________________________________________________________________________ Brown Combined Total sales Kinney owned or Brown-Kinney Area (pairs) Shoe Store controlled share (%) outlets (%)* (%)* _______________________________________________________________________________________ Springfield, Mo___________ 210,400 3.7 14.9 18.6 Laredo, Tex_______________ 166,200 15.3 3.2 18.5 St. Cloud, Minn___________ 88,400 9.6 8.9 18.5 Fort Smith, Ark___________ 165,200 11.8 6.5 18.3 Kingsport, Tenn___________ 106,200 13.0 5.1 18.1 Gulfport, Miss____________ 99,700 14.2 3.7 17.9 Cortland, N. Y____________ 55,300 12.2 5.5 17.7 Fremont, Nebr_____________ 56,100 11.8 5.6 17.4 Manitowoc, Wis____________ 60,800 13.9 3.5 17.4 Salina, Kans______________ 102,800 13.8 3.3 17.1 Muncie, Ind_______________ 158,000 7.9 9.0 16.9 Portsmouth, Ohio__________ 141,200 9.2 7.2 16.4 Reading, Pa_______________ 417,200 6.0 10.4 16.4 Greensburg, Pa____________ 117,800 8.0 7.9 15.9 Little Rock, Ark__________ 468,100 2.7 13.2 15.9 Flint, Mich_______________ 628,300 2.7 13.1 15.8 Wichita, Kans_____________ 666,600 7.5 8.3 15.8 Lubbock, Tex______________ 305,500 3.9 11.7 15.6 Kingston, N. Y____________ 112,100 11.6 3.9 15.5 Emporia, Kans_____________ 44,300 14.3 0.8 15.1 Johnson City, Tenn________ 75,800 12.0 3.1 15.1 Odessa, Tex_______________ 167,700 8.1 7.0 15.1 Bloomington, Ill__________ 129,600 6.2 8.6 14.8 Elgin, Ill________________ 126,900 6.7 8.0 14.7 Enid, Okla________________ 140,400 10.7 4.0 14.7 Burlington, Iowa__________ 74,500 10.7 3.9 14.6 South Bend, Ind___________ 434,500 1.6 13.0 14.6 Galesburg, Ill____________ 95,600 12.4 2.1 14.5 Abilene, Tex______________ 184,300 12.4 2.0 14.4 Meridian, Miss____________ 120,000 3.7 10.6 14.3 Toledo, Ohio______________ 821,800 1.3 12.6 13.9 Tulsa, Okla_______________ 749,000 7.0 6.9 13.9 Colorado Springs, Colo____ 225,600 7.5 6.1 13.6 Williamsport, Pa__________ 153,400 4.1 9.2 13.3 Mankato, Minn_____________ 99,900 7.9 5.3 13.2 Green Bay, Wis____________ 220,000 7.5 5.2 12.7 Waterloo, Iowa____________ 224,100 10.2 2.3 12.5 Sioux Falls, S. Dak_______ 172,000 7.4 4.9 12.3 Glens Falls, N. Y_________ 115,300 7.6 4.6 12.2 Kansas City, Kans_________ 181,300 8.6 3.6 12.2 Oklahoma City, Okla_______ 839,500 1.8 10.4 12.2 Hutchinson, Kans__________ 156,400 9.0 2.4 11.4 Kenosha, Wis______________ 107,700 7.0 4.3 11.3 Pottsville, Pa____________ 147,000 6.0 5.3 11.3 San Angelo, Tex___________ 113,800 6.5 4.6 11.1 Wheeling, W. Va___________ 311,600 6.9 3.9 10.8 Ithaca, N. Y______________ 82,300 5.8 4.7 10.5 Zanesville, Ohio__________ 138,800 9.0 1.5 10.5 Mobile, Ala_______________ 473,100 1.0 9.4 10.4 * See footnote on p. 347.
_______________________________________________________________________________________ Brown Combined Total sales Kinney owned or Brown-Kinney Area (pairs) Shoe Store controlled share (%) outlets (%)* (%)* _______________________________________________________________________________________ York, Pa________________ 344,200 5.1 4.9 10.0 Gary, Ind_______________ 414,400 4.3 5.3 9.6 Decatur, Ill____________ 221,800 3.9 5.5 9.4 Amarillo, Tex___________ 334,100 5.6 3.2 8.8 Minneapolis, Minn_______ 1,909,900 5.3 3.1 8.4 Fort Worth, Tex_________ 1,092,100 1.4 6.9 8.3 Waco, Tex_______________ 170,400 5.4 2.9 8.3 Altoona, Pa_____________ 241,000 4.8 3.3 8.1 Lancaster, Pa___________ 316,400 3.9 4.2 8.1 Rockford, Ill___________ 377,400 5.0 3.1 8.1 Saginaw, Mich___________ 326,300 2.1 5.6 7.7 Grand Rapids, Mich______ 650,300 5.8 1.6 7.4 Jacksonville, Fla_______ 739,200 0.6 6.7 7.3 Columbus, Ga____________ 308,300 3.4 3.5 6.9 Evansville, Ind_________ 486,600 3.1 3.6 6.7 St. Paul, Minn__________ 1,013,200 3.1 3.5 6.6 Montgomery, Ala_________ 437,100 1.7 4.7 6.4 Peoria, Ill_____________ 469,300 3.6 2.8 6.4 Springfield, Ill________ 304,400 5.1 1.3 6.4 Milwaukee, Wis__________ 1,984,900 5.9 0.3 6.2 San Antonio, Tex________ 1,476,000 1.0 4.7 5.7 Cedar Rapids, Iowa______ 256,600 3.9 1.2 5.1 _______________________________________________________________________________________ * See footnote on p. 347.
Source: GX 9, 214, R. 60-70, 1223-1227; DX RR, DDDD-1, DDDD-2, R. 3892-4315, 4939-5299, 5300-5652.
Sales of children's shoes by Brown and Kinney as a share of the total city sales in selected areas (1955) _______________________________________________________________________________________ Brown Combined Total sales Kinney owned or Brown-Kinney Area (pairs) Shoe Store controlled share (%) outlets (%)* (%)* _______________________________________________________________________________________ Coatesville, Pa___________ 20,900 20.8 31.0 51.8 Dodge City, Kans__________ 14,200 35.5 13.5 49.0 Council Bluffs, Iowa______ 30,900 36.6 6.5 43.1 Ardmore, Okla_____________ 28,400 20.7 21.0 41.7 Pueblo, Colo______________ 69,100 25.4 15.8 41.2 Borger, Tex_______________ 22,700 24.8 16.1 40.9 Berwyn, Ill_______________ 43,500 31.2 3.4 34.6 Batavia, N. Y_____________ 34,100 14.0 19.3 33.3 Ottumwa, Iowa_____________ 30,500 30.4 2.5 32.9 Carlisle, Pa______________ 25,200 21.4 11.3 32.7 Manitowoc, Wis____________ 27,600 19.2 12.1 31.3 Lawton, Okla______________ 43,200 18.3 12.6 30.9 Franklin, Pa______________ 14,500 14.4 14.9 29.3 Gulfport, Miss____________ 45,200 24.5 4.5 29.0 Fremont, Nebr_____________ 25,400 14.3 14.6 28.9 Bartlesville, Okla________ 28,600 20.7 7.8 28.5 Concord, N. H_____________ 26,000 16.3 11.8 28.1 Uniontown, Pa_____________ 65,700 18.9 8.3 27.2 Marshalltown, Iowa________ 32,900 22.8 4.2 27.0 Cortland, N. Y____________ 25,100 13.8 12.4 26.2 Kingsport, Tenn___________ 48,100 14.8 10.6 25.4 McAllen, Tex______________ 40,000 17.0 7.5 24.5 Topeka, Kans______________ 101,600 15.7 7.2 22.9 Texarkana, Ark____________ 29,800 19.2 3.6 22.8 Johnson City, Tenn________ 34,300 13.0 9.4 22.4 Dubuque, Iowa_____________ 53,900 17.6 4.5 22.1 Emporia, Kans_____________ 20,100 14.5 7.4 21.9 Iowa City, Iowa___________ 32,700 15.8 5.8 21.6 Muskogee, Okla____________ 30,900 10.7 10.9 21.6 Salina, Kans______________ 46,600 12.5 8.7 21.2 Mason City, Iowa__________ 46,400 16.8 3.4 20.2 Enid, Okla________________ 63,700 12.1 6.9 19.0 Kingston, N. Y____________ 50,800 12.8 5.1 17.9 Rochester, Minn___________ 59,100 7.5 9.9 17.4 Ithaca, N. Y______________ 37,300 5.5 11.8 17.3 Hutchinson, Kans__________ 70,900 10.9 6.0 16.9 Baton Rouge, La___________ 180,400 8.0 8.6 16.6 Grand Forks, N. Dak_______ 54,900 12.7 3.4 16.1 Sioux City, Iowa__________ 100,600 9.8 5.9 15.7 Altoona, Pa_______________ 109,300 12.5 2.9 15.4 Elgin, Ill________________ 57,500 13.1 2.3 15.4 * The percentages in these columns reflect sales of Brown brand shoes through Brown owned or controlled outlets, with the single exception of Manitowoc, Wis., in which case they reflect the sale of Brown brand shoes through all outlets, regardless of ownership or control, and are, therefore, marginally too high.
Children's shoes—Continued _____________________________________________________________________________________ Brown Combined Total sales Kinney owned or Brown-Kinney Area (pairs) Shoe Store controlled share (%) outlets (%)* (%)* _____________________________________________________________________________________ Meridian, Miss_________ 54,400 6.7 8.7 15.4 Wichita, Kans__________ 302,200 9.6 5.6 15.2 Colorado Springs, Colo_ 102,300 8.0 7.1 15.1 Fort Smith, Ark________ 74,900 12.1 3.0 15.1 Fort Dodge, Iowa_______ 47,100 12.5 2.4 14.9 Zanesville, Ohio_______ 62,900 9.7 4.8 14.5 Muskegon, Mich_________ 78,000 7.4 6.6 14.0 Steubenville, Ohio_____ 93,900 11.4 2.4 13.8 Tulsa, Okla____________ 339,500 8.6 5.2 13.8 Corpus Christi, Tex____ 150,300 4.4 8.8 13.2 Davenport, Iowa________ 104,400 8.4 4.8 13.2 Fargo, N. Dak__________ 73,800 9.0 3.8 12.8 Wheeling, W. Va________ 141,200 8.7 4.1 12.8 Amarillo, Tex__________ 151,400 8.5 4.2 12.7 Little Rock, Ark_______ 212,200 3.0 9.5 12.5 South Bend, Ind________ 197,000 2.9 9.4 12.3 Greensburg, Pa_________ 53,400 8.9 3.0 11.9 Des Moines, Iowa_______ 225,100 6.5 5.1 11.6 Glens Falls, N. Y______ 52,300 10.2 1.2 11.4 Green Bay, Wis_________ 99,700 7.3 3.8 11.1 Decatur, Ill___________ 100,500 6.3 4.4 10.7 Fort Worth, Tex________ 495,100 3.3 7.4 10.7 Mobile, Ala____________ 198,100 4.5 6.2 10.7 Gary, Ind______________ 187,800 7.0 3.6 10.6 Bloomington, Ill_______ 58,800 6.5 4.0 10.5 Springfield, Mo________ 95,400 3.1 6.5 9.6 Willamsport, Pa________ 69,600 5.0 4.5 9.5 Waco, Tex______________ 77,200 6.3 3.2 9.5 Lubbock, Tex___________ 138,500 6.4 2.8 9.2 Pottsville, Pa_________ 66,600 5.9 3.3 9.2 Milwaukee, Wis_________ 899,800 8.3 0.4 8.7 Lancaster, Pa__________ 143,400 6.2 2.3 8.5 Tampa, Fla_____________ 251,600 4.5 4.0 8.5 Oklahoma City, Okla____ 380,600 2.5 5.8 8.3 Mankato, Minn__________ 45,300 8.9 1.1 7.9 Minneapolis, Minn______ 865,800 6.7 1.2 7.9 Peoria, Ill____________ 212,700 6.7 1.0 7.7 Columbus, Ga___________ 139,700 6.4 1.2 7.6 Reading, Pa____________ 189,100 4.4 3.1 7.5 Toledo, Ohio___________ 372,500 1.5 5.3 6.8 Jacksonville, Fla______ 335,100 2.0 4.5 6.5 Springfield, Ill_______ 558,500 5.7 0.7 6.4 Montgomery, Ala________ 164,500 3.3 2.9 6.2 Brownsville, Tex_______ 100,500 4.3 1.8 6.1 Saginaw, Mich__________ 147,900 3.5 2.5 6.0 St. Paul, Minn_________ 459,300 2.7 2.5 5.2 Detroit, Mich__________ 2,483,900 4.4 0.6 5.0 _____________________________________________________________________________________ * See footnote on p. 350.
Source: GX 9, 214, R. 60-70, 1228-1232; DX RR, DDDD-1, DDDD-2, R. 3892-4315, 4939-5299, 5300-5652.
Sales of men's shoes by Brown and Kinney as a share of the total city sales in selected areas (1955) _____________________________________________________________________________________ Brown Combined Total sales Kinney owned or Brown-Kinney Area (pairs) Shoe Store controlled share (%) outlets (%)* (%)* _____________________________________________________________________________________ Dodge City, Kans__________ 12,000 16.4 8.4 24.8 Ardmore, Okla_____________ 23,900 8.1 15.5 23.6 Batavia, N. Y_____________ 28,700 8.9 11.3 20.2 Lawton, Okla______________ 36,300 11.3 8.2 19.5 Borger, Tex_______________ 19,100 11.5 7.8 19.3 Pueblo, Colo______________ 58,100 8.6 10.3 18.9 Carlisle, Pa______________ 21,200 14.3 4.2 18.5 Fremont, Nebr_____________ 21,400 8.0 10.4 18.4 Coatesville, Pa___________ 17,600 9.3 8.2 17.5 Manitowoc, Wis____________ 23,200 10.1 7.3 17.4 Franklin, Pa______________ 12,200 10.5 5.3 15.8 Council Bluffs, Iowa______ 26,000 14.0 1.1 15.1 Concord, N. H_____________ 21,900 11.0 3.7 14.7 Texarkana, Ark____________ 25,100 12.1 2.6 14.7 Corpus Christi, Tex_______ 126,500 2.0 12.3 14.3 Muskogee, Okla____________ 26,000 6.5 7.6 14.1 Emporia, Kans_____________ 16,900 7.8 5.7 13.5 Kingsport, Tenn___________ 40,500 7.2 5.9 13.1 Bartlesville, Okla________ 24,100 8.9 4.1 13.0 Cortland, N. Y____________ 21,100 7.6 5.2 12.8 Dubuque, Iowa_____________ 45,400 10.2 2.1 12.3 McAllen, Tex______________ 34,400 8.4 3.5 11.9 Berwyn, Ill_______________ 36,600 9.1 2.6 11.7 Salina, Kans______________ 39,200 7.2 3.9 11.1 Kingston, N. Y____________ 42,800 6.9 3.7 10.6 Elgin, Ill________________ 48,400 10.1 0.4 10.5 Enid, Okla________________ 53,600 5.9 4.6 10.5 Uniontown, Pa_____________ 55,300 7.3 2.9 10.2 Rochester, Minn___________ 49,600 4.3 5.5 9.8 Fort Smith, Ark___________ 63,000 5.2 4.5 9.7 Topeka, Kans______________ 85,500 9.0 0.5 9.5 Hutchinson, Kans__________ 59,700 5.1 3.7 8.8 Johnson City, Tenn________ 28,900 7.7 1.0 8.7 Davenport, Iowa___________ 87,900 6.0 1.7 7.7 Ithaca, N. Y______________ 31,400 3.5 4.2 7.7 Zanesville, Ohio__________ 53,000 5.2 2.1 7.3 Muskegon, Mich____________ 65,600 5.1 1.7 6.8 Steubenville, Ohio________ 79,000 5.7 1.1 6.8 Springfield, Mo___________ 80,300 3.6 2.8 6.4 * The percentages in these columns reflect sales of Brown brand shoes through Brown owned or controlled outlets, with the single exception of Concord, N. H., in which case they reflect the sale of Brown brand shoes through all outlets, regardless of ownership or control, and are, therefore, marginally too high.
_______________________________________________________________________________________ Brown Combined Total sales Kinney owned or Brown-Kinney Area (pairs) Shoe Store controlled share (%) outlets (%)* (%)* _______________________________________________________________________________________ Amarillo, Tex_____________ 127,400 4.6 1.3 5.9 Asheville, N. C___________ 80,900 2.9 2.9 5.8 Green Bay, Wis____________ 83,900 4.0 1.6 5.6 Waco, Tex_________________ 65,000 2.6 3.0 5.6 Greensburg, Pa____________ 44,900 4.4 1.0 5.4 Peoria, Ill_______________ 179,000 4.7 0.7 5.4 Reading, Pa_______________ 159,200 2.7 2.6 5.3 Wichita, Kans_____________ 254,300 4.3 0.9 5.2 Colorado Springs, Colo____ 86,100 4.4 0.7 5.1 _______________________________________________________________________________________ * See footnote on p. 352.
Source: GX 9, 214, R. 60-70, 1219-1222; DX RR. DDDD-1, DDDD-2, R. 3892-4315, 4939-5299, 5300-5652.
Comparison of Brown-Kinney percentage of industry shoe sales for selected cities, and counties or standard metropolitan areas [Appellant's percentages of 1954 dollar sales adjusted to include sales of Brown franchise and Wohl plan stores] ______________________________________________________________________________________ County or SMA percentage
2City City percentage 1________________________________________ Name SMA County ______________________________________________________________________________________ Texas City, Tex_________ 35.8 Galveston, Tex__________ 12.2 ______ Coatesville, Pa_________ 32.9 Philadelphia, Pa________ 1.9 ______ Ottumwa, Iowa___________ 27.3 Wapello County__________ ____ 26.5 Uniontown, Pa___________ 27.2 Fayette County__________ ____ 12.4 Texarkana, Ark__________ 25.3 Miller County___________ ____ 23.9 Marshalltown, Iowa______ 24.9 Marshall County_________ ____ 22.6 Council Bluffs, Iowa____ 24.2 Omaha, Nebr_____________ 7.9 _____ Corpus Christi, Tex_____ 24.0 Corpus Christi, Tex_____ 22.6 _____ Ardmore, Okla___________ 23.4 Carter County___________ ____ 20.4 Iowa City, Iowa_________ 18.9 Johnson County__________ ____ 16.6 Muskogee, Okla__________ 17.7 Muskogee County_________ ____ 16.5 Steubenville, Ohio______ 17.5 Wheeling-Steubenville___ 8.7 _____ Grand Forks, N. Dak_____ 17.1 Grand Forks County______ ____ 14.4 Mason City, Iowa________ 16.6 Cerro Gordo County______ ____ 15.6 Topeka, Kans____________ 16.4 Topeka, Kans____________ 16.1 _____ Baton Rouge, La_________ 16.0 Baton Rouge, La_________ 15.9 _____ Rochester, Minn_________ 15.9 Rochester, Minn_________ 15.4 _____ Dubuque, Iowa___________ 15.4 Dubuque, Iowa___________ 13.9 _____ Fort Smith, Ark_________ 15.4 Fort Smith, Ark_________ 14.7 _____ Little Rock, Ark________ 15.2 Little Rock & North Little Rock, Ark______________ 13.2 _____ Fort Dodge, Iowa________ 14.8 Webster County__________ ____ 14.3 Springfield, Mo_________ 14.3 Springfield, Mo_________ 13.3 _____ Berwyn, Ill_____________ 14.1 Chicago, Ill____________ 2.5 _____ Davenport, Iowa_________ 14.1 Davenport, Moline, Rock Island_________________ 12.2 _____ Fargo, N. Dak___________ 13.9 Cass County_____________ ____ 13.5 Altoona, Pa_____________ 13.1 Altoona, Pa_____________ 10.6 _____ Muskegon, Mich__________ 13.1 Muskegon County_________ ____ 12.0 Reading, Pa_____________ 12.2 Reading, Pa_____________ 10.7 _____ South Bend, Ind_________ 11.9 South Bend, Ind_________ 11.1 _____ Greensburg, Pa__________ 11.3 Pittsburgh, Pa__________ 2.5 _____ Bloomington, Ill________ 11.0 McLean County___________ ____ 9.8 Kansas City, Kans_______ 10.7 Kansas City, Mo_________ 3.1 _____ Colorado Springs, Colo__ 10.6 El Paso County__________ ____ 10.5 Elgin, Ill______________ 10.5 Chicago, Ill____________ 2.5 _____ Oklahoma City, Okla_____ 10.0 Oklahoma City, Okla_____ 10.1 _____ _______________________________________________________________________________________ 1. Based on dollar values from DX DDDD-1, DDDD-2, NNNN, UUUUUU, R. 4939-5299, R. 5300-5652, 5780-5818, 7155-7313; GX 241 D, R. 2014-2365. 2. Total area dollar estimates of footwear sales from GX 242, R. 2807-2819, and DX UUUUUU, R. 7155-7313. Area dollar sales of footwear by Brown and Kinney owned or controlled outlets from DDDD-1, DDDD-2, NNNN, UUUUUU, R. 4939-5299, 5300-5652, 5780-5818, 7155-7313; GX241 D, R. 2014-2365.
I agree that so long as the Expediting Act, 15 U. S. C. § 29, is on the books we have no alternative but to accept jurisdiction in this case. The Act declares that appeals in civil antitrust cases in which the United States is complainant lie only to this Court. It thus deprives the parties of an intermediate appeal and this Court of the benefit of consideration by a Court of Appeals. Under our system a party should be entitled to at least one appellate review, and since the sole opportunity in cases under the Expediting Act is in this Court we usually note jurisdiction. A fair consideration of the issues requires us to carry out the function of a Court of Appeals by examining the whole record and resolving all questions, whether or not they are substantial. This is a great burden on the Court and seldom results in much expedition, as in this case where 2 1/2 years have passed since the District Court's decision.
On the merits the case presents the question of whether, under § 7 of the Clayton Act, the acquisition by Brown of the Kinney retail stores may substantially lessen competition in shoes on a national basis or in any section of the country.
An analysis of the record indicates (1) that Brown, which makes all types of shoes, is the fourth largest manufacturer in the country; (2) that Kinney likewise manufactures some shoes but deals primarily in retailing, having almost 400 stores that handle a substantial volume
It would appear that the relevant line of commerce would be shoes of all types. This is emphasized by the nature of Brown's manufacturing activity and its plan to integrate the Kinney stores into its operations. The competition affected thereby would be in the line handled by these stores which is the full line of shoes manufactured by Brown. This conclusion is more in keeping with the record as I read it and at the same time avoids the charge of splintering the product line. Likewise, the location of the Kinney stores points more to a national market in shoes than a number of regional markets staked by artificial municipal boundaries. Brown's business is on a national scale and its policy of integration of manufacturing and retailing is on that basis. I would conclude, therefore, that it would be more reasonable to define the line of commerce as shoes—those sold in the ordinary retail store—and the market as the entire country.
MR. JUSTICE HARLAN, dissenting in part and concurring in part.
I would dismiss this appeal for lack of jurisdiction, believing that the case in its present posture is prematurely here because the judgment sought to be reviewed is not yet final. Since the Court, however, holds that the case is properly before us, I consider it appropriate, after noting my dissent to this holding, to express my views on the merits because the issues are of great importance. On that aspect, I concur in the judgment of the Court but do not join its opinion, which I consider to go far beyond what is necessary to decide the case.
The Court's authority to entertain this appeal depends on § 2 of the Expediting Act of 1903. That statute, in its present form, provides (15 U. S. C. § 29):
The Act was passed by a Congress which thereby "sought . . . to ensure speedy disposition of suits in equity brought by the United States under the Anti-Trust
By taking jurisdiction over this appeal at the present time, despite the fact that, even if affirmed, this case would doubtless reappear on the Court's docket if the terms of the District Court's divestiture decree are unsatisfactory to the appellant or to the Government, the Court is paving the way for dual appeals in all government antitrust cases where intricate divestiture judgments are involved. Whether or not such a procedure is advisable from the standpoint of judicial administration or practical business considerations—and I think such questions by no means free from doubt—I believe that it is contrary to the provisions and purposes of the Expediting Act, and that the construction now given the Act does violence to the accepted meaning of "final judgment" in the federal judicial system.
The judgment from which this appeal is taken directs the appellant to "relinquish and dispose of the stock, share capital and assets" of the G. R. Kinney Company and enjoins further interlocking interests between the two corporations. It does not specify how the divestiture is to be carried out, but directs appellant to file "a proposed
The exacting obligation with respect to the terms of antitrust decrees cast upon this Court by the Expediting Act was commented upon only last Term. In United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, it was noted that it was the Court's practice, "particularly in cases of a direct appeal from the decree of a single judge, . . . to examine the District Court's action closely to satisfy ourselves that the relief is effective to redress the antitrust violation proved." 366 U. S., at 323; see International Boxing Club, Inc., v. United States, 358 U.S. 242, 253. In the present case the Court and the parties know nothing more of "this most significant phase of the case," United States v. United States Gypsum Co., 340 U.S. 76, 89, than that Brown will generally be
Despite the opportunity thus created for separate reviews of these kinds of cases at their "merits" and "relief" stages, the Court holds that the judgment now in effect has "sufficient indicia of finality" (ante, p. 308) to render it appealable now, notwithstanding that the terms of the ordered divestiture have not yet been fixed. This conclusion is based upon three discrete considerations, none of which, in my opinion, serves to overcome the "final judgment" requirement of the Expediting Act, as that term has hitherto been understood in federal law.
First. The Court suggests that any further proceedings to be conducted in the District Court are "sufficiently independent of, and subordinate to, the issues presented by this appeal" to permit them to be considered and reviewed separately. But this judicially created exception to the embracing principle of finality has never heretofore been utilized by this Court to permit separate review of a District Court's decision on the underlying merits of a claim when the details of the relief that is to be awarded are yet uncertain. The present case does not present the possibility, as did Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, and Forgay v. Conrad, 6 How. 201, that a delay in appellate review would result in irreparable
If the appellant were compelled to await the entry of a particularized divestiture order before being granted appellate review, it would suffer no irremediable loss; indeed, in this case the merger was allowed to proceed pendente lite, so any delay, to the extent that it could affect the parties, would benefit the appellant. Nor can it well be suggested that the particular conditions under which the divestiture is to be executed are matters that are only fortuitously "entangled" with the merits of the complaint. Despite the seemingly mandatory tone of the "divestiture" judgment now before us, the plain fact remains that it is by its own terms inoperative to a substantial extent until further proceedings are held in the District Court. Unlike the cases relied upon by the Court, therefore, this case comes up on appeal before the appellant knows exactly what it has been ordered to do or not to do. This is surely not the type of judgment "which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233; see Covington v. Covington First National Bank, 185 U.S. 270, 277.
Second. The Court finds significant the "character of the decree still to be entered in this suit." Ante, p. 309. Since the order of full divestiture requires "careful, and often extended, negotiation and formulation," ante, p. 309, it is suggested that a delay in carrying out its terms might render them impractical or unenforceable. Apart
Moreover, if it is delay between formulation of the decree and its execution that is thought to be damaging, what reason is there to believe that this delay or its hazards will be any greater if the entire case is brought up here once than if review is separately sought from the divestiture decree once its terms have been settled? Nor can it be maintained that if the merits are now affirmed then an appeal on the question of relief is improbable. For insofar as complex "negotiation and formulation" is a factor, the probability of an appeal is equally likely in either instance.
Third. The Court's final reason for holding this judgment appealable is that similar judgments have often been reviewed here in the past with no issue ever having been raised regarding jurisdiction. But the cases are
The Court suggests that a "pragmatic approach" to finality is called for in light of the policies of the Federal Rules of Civil Procedure, which direct the "just, speedy, and inexpensive determination of every action." Ante, p. 306. But this misconceives the nature of the issue that is presented. Whether this judgment is final and appealable is not a question turning on the Federal Rules of Civil Procedure or on any balance of policies by this Court. Congress has seen fit to make this Court, for reasons which are less than obvious, the sole appellate tribunal for civil antitrust suits instituted by the United
At this period of mounting dockets there is certainly much to be said in favor of relieving this Court of the often arduous task of searching through voluminous trial testimony and exhibits to determine whether a single district judge's findings of fact are supportable. The legal issues in most civil antitrust cases are no longer so novel or unsettled as to make them especially appropriate for initial appellate consideration by this Court, as compared with those in a variety of other areas of federal law. And under modern conditions it may well be doubted whether direct review of such cases by this Court truly serves the purpose of expedition which underlay the original passage of the Expediting Act. I venture to predict that a critical reappraisal of the problem would lead to the conclusion that "expedition" and also, over-all, more satisfactory appellate review would be achieved in
So long, however, as the present Expediting Act continues to commend itself to Congress this Court is bound by its limitations, and since for the reasons already given the decree appealed cannot, in my opinion, be properly considered a "final judgment," I think the appeal, at this juncture, should have been dismissed.
Since the Court nonetheless holds that the judgment is appealable in its present form, and since the underlying questions are far-reaching, I consider it a duty to express my view on the merits. On this aspect of the case I join the disposition which affirms the judgment of the District Court, though I am not prepared to subscribe to all that is said or implied in the opinion of this Court.
The question presented by this case can be stated in narrow and concise terms: Are the District Court's conclusions that the effect of the Brown-Kinney merger may
The dispositive considerations are, I think, found in the "vertical" effects of the merger, that is, the effects reasonably to be foreseen from combining Brown's manufacturing facilities with Kinney's retail outlets. In my opinion the District Court's conclusions as to such effects are supported by the record, and suffice to condemn the merger under § 7, without regard to what might be deemed to be the "horizontal" effects of the transaction.
1. "Line of Commerce."—In considering both the horizontal and vertical aspects of this merger, the District Court analyzed the probable impact on competition in terms of three relevant "lines of commerce"—men's shoes, women's shoes, and children's shoes. It rejected Brown's claim that shoes of different construction or of different price range constituted distinct lines of commerce. Whatever merit there might be to Brown's contention that the product market should be more narrowly defined when it is viewed from the vantage point of the ultimate consumer (whose pocketbook, for example, may limit his purchase to a definite price range), the same is surely not true of the shoe manufacturer. Although the record contains evidence tending to prove that a shoe manufacturing
Because of this flexibility of manufacture, the product market with respect to the merger between Brown's manufacturing facilities and Kinney's retail outlets might more accurately be defined as the complete wearing-apparel shoe market, combining in one the three components which the District Court treated as separate lines of commerce. Such an analysis, taking into account the interchangeability of production, would seem a more realistic gauge of the possible anticompetitive effects in the shoe manufacturing industry of a merger between a shoe manufacturer and a retailer than the District Court's compartmentalization in terms of the buying public. For if a manufacturer of women's shoes is able, albeit at some expense, to convert his plant to the production of men's shoes, the possibility of such a shift should be considered in deciding whether the market for either men's shoes or women's shoes can be monopolized or whether a particular merger substantially lessens competition among manufacturers of either product. See Adelman, Economic Aspects of the Bethlehem Opinion, 45 Va. L. Rev. 684, 689-691; cf. United States v. Columbia Steel Co., 334 U.S. 495, 510-511; but see United States v. Bethlehem Steel Corp., 168 F.Supp. 576, 592.
The fact that § 7 speaks of the lessening of competition "in any line of commerce" (emphasis added) does not, of course, mean that the product market on which the effect of the merger is considered may be defined as narrowly
2. "Section of the Country."—This merger involves nationwide concerns which sell and purchase shoes in various localities throughout the country, so that it appears that the most suitable geographical market for appraising the alleged anticompetitive effects of the vertical combination is the Nation as a whole. This finding of the District Court (limited to the vertical aspect of the merger) is not contested by Brown and is properly accepted here. One caveat is in order, however. In judging the anticompetitive effect of the merger on the national market, it must be recognized that any decline in competition that might result need not have a uniform effect throughout the entire country. It is sufficient if
3. "Substantially to Lessen Competition."—The remaining question is whether the merger of Brown's manufacturing facilities with Kinney's retail outlets "may . . . substantially lessen competition" or "tend to create a monopoly" in the nationwide market in which shoe manufacturers sell to shoe retailers. The findings of the District Court, supported by the evidence, when taken together with undisputed facts appearing in the record, justify the conclusion that a substantial lessening of competition in the relevant market is a "reasonable probability." S. Rep. No. 1775, 81st Cong., 2d Sess. 6 (1950).
On the date of the merger Kinney's retail stores numbered 352, and this figure had increased to more than 400 by the time of the trial. Nearly all these stores sell men's, women's, and children's shoes and are located in the downtown areas of cities of at least 10,000 population. In 116 of these cities, Kinney's combined pairage sale of shoes for 1955 exceeded 10% of all shoes sold in the city during the year. Its total retail shoe sales during the year constituted 1.2% of the national total in terms of dollar volume and 1.6% in terms of pairage. Of these shoes, only 20% were supplied by the Kinney manufacturing plants, the remainder coming from some 197 other sources.
Prior to 1955 Kinney had bought none of its outside source shoes from Brown, and its records for 1955 reveal that the year's purchases were made from a diverse number of independent shoe manufacturers. There were 66 suppliers (including Brown) in that year each of whose total sales to Kinney exceeded $50,000, and only three of
That the merger between Brown's shoe production plants and Kinney's retail outlets will tend to foreclose some of the large market which smaller shoe manufacturers found in sales to Kinney hardly seems open to doubt. This conclusion is supported by the following facts which emerge indisputably from the record: (1) In the shoe industry, as in many others, the purchase of a retail chain by a manufacturer results in an increased flow of the purchasing manufacturer's shoes to the retail store. Hence independent shoe manufacturers find it more difficult to sell their shoes to an acquired retail chain than to an independent one. (2) The result of Brown's earlier acquisition of two retail chains was, in each instance, a substantial increase in the quantity of Brown shoe purchases by the previously independent chains.
The dollar volume of Kinney's outside shoe purchases in 1955 was between 16 and 17 million dollars, and this amount had increased to 19.4 million by 1957. While Kinney was making only about 1.2% of the total retail dollar sales in the United States in 1955, that percentage can hardly be deemed an accurate reflection of its proportion of nationwide shoe purchases by retailers since the retail-sales figure is based on a computation that includes all retail stores, whether or not they were vertically integrated or otherwise affiliated. In terms of available markets for independent shoe manufacturers, the percentage of Kinney's purchases must have been substantially larger—though the precise figure is unavailable on the record before us.
If the controlling test were, as it may be under the similar language of § 3 of the Clayton Act, one of "quantitative
The vertical affiliation between this shoe manufacturer and a primarily retail organization is surely not, as the dissenters thought the contractual tie in Standard Stations to be, "a device for waging competition" rather than "a device for suppressing competition." 337 U. S., at 323. Since Brown is able by reason of this merger to turn an independent purchaser into a captive market for its shoes it inevitably diminishes the available market for which shoe manufacturers compete. If Brown shoes replace those which had been previously produced by others, the displaced manufacturers have no choice but to enter some other market or go out of business. Since all manufacturers, including Brown, had competed for Kinney's patronage when it was unaffiliated, Brown's merger with Kinney potentially withdraws a share of the market previously available to the independent shoe manufacturers.
Not only may this merger, judged from a vertical standpoint, affect manufacturers who compete with Brown; it may also adversely affect competition on the retailing level. With a large manufacturer such as Brown behind it, the Kinney chain would have a great competitive advantage over the retail stores with which it vies for consumer patronage. As a manufacturer-owned outlet, the Kinney store would doubtless be able to sell its shoes at a
Brown contends that even if these anticompetitive effects are probable, they touch upon an insignificant share of the market and are not, therefore, "substantial" within the meaning of § 7. Our decision in Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, is cited as authority for the proposition that a foreclosure of about 1% of the relevant market is necessarily insubstantial. But the opinion in Tampa Electric carefully noted that "substantiality in a given case" depends on a variety of factors. 365 U. S., at 329. Two of the considerations that were mentioned were "the relative strength of the parties" and "the probable immediate and future effects which pre-emption of that share of the market might have on effective competition therein." Ibid. When, as here, the foreclosure of what may be considered a small percentage of retailers' purchases may be caused by the combination of the country's third largest seller of shoes with the country's largest family-style shoe store chain, and when the volume of the latter's purchases from independent manufacturers in various parts of the country is large enough to render it probable that these suppliers, if displaced, will have to fall by the wayside, it cannot, in my opinion, be said that the effect on the shoe industry is "remote" or "insubstantial."
I reach this result without considering the findings of the District Court respecting the trend in the shoe industry towards "oligopoly" and vertical integration. The
Accordingly, bowing to the Court's decision that the case is properly before us, I join the judgment of affirmance.
"It was our feeling, in addition to getting a distribution into the field of prices which we were not covering, it was also the feeling that as Kinney moved into the shopping centers in these free standing stores, they were going into a higher income neighborhood and they would probably find the necessity of up-grading and adding additional lines to their very successful operation that they had been doing and it would give us an opportunity we hoped to be able to sell them in that category. Besides that, it was a very successful operation and would give us a good diversified investment to stabilize our earnings." T. 1323.
Public hearings were held on H. R. 2357, 79th Cong., 1st Sess. (1945); S. 104, 80th Cong., 1st Sess. (1947); H. R. 515, 80th Cong., 1st Sess. (1947), and H. R. 2734, 81st Cong., 1st Sess. (1949-1950).
For reviews of the legislative history of the amendments, see Notes, 52 Col. L. Rev. 766 (1952); 46 Ill. L. Rev. 444 (1951); Bok, Section 7 of the Clayton Act and the Merging of Law and Economics, 74 Harv. L. Rev. 226, 233-238 (1960); Handler and Robinson, A Decade of Administration of the Celler-Kefauver Antimerger Act, 61 Col. L. Rev. 629, 652-674 (1961); Martin, Mergers and the Clayton Act 221-310 (1959).
"That the current merger movement [during the years 1940-1947] has had a significant effect on the economy is clearly revealed by the fact that the asset value of the companies which have disappeared through mergers amounts to 5.2 billion dollars, or no less than 5.5 percent of the total assets of all manufacturing corporations—a significant segment of the economy to be swallowed up in such a short period of time." H. R. Rep. No. 1191, 81st Cong., 1st Sess. 3.
"The purpose of the proposed legislation is to prevent corporations from acquiring another corporation by means of the acquisition of its assets, whereunder [sic] the present law it is prohibited from acquiring the stock of said corporation. Since the acquisition of stock is significant chiefly because it is likely to result in control of the underlying assets, failure to prohibit direct purchase of the same assets has been inconsistent and paradoxical as to the over-all effect of existing law." S. Rep. No. 1775, 81st Cong., 2d Sess. 2.
"The use of these words ["may be"] means that the bill, if enacted, would not apply to the mere possibility but only to the reasonable probability of the prescribed [sic] effect . . . . The words `may be' have been in section 7 of the Clayton Act since 1914. The concept of reasonable probability conveyed by these words is a necessary element in any statute which seeks to arrest restraints of trade in their incipiency and before they develop into full-fledged restraints violative of the Sherman Act. A requirement of certainty and actuality of injury to competition is incompatible with any effort to supplement the Sherman Act by reaching incipient restraints." S. Rep. No. 1775, 81st Cong., 2d Sess. 6. See also 51 Cong. Rec. 14464 (remarks of Senator Reed).
In 1953, Brown purchased a partial interest in a small chain of retail stores in Los Angeles known as Wetherby-Kayser. Before this purchase, Brown had supplied 10.4% of Wetherby's shoes; within one year this percentage increased to almost 50%.
There is no suggestion in the record as to whether earlier purchases of retail chains by shoe manufacturers reduced the number of independent manufacturers or otherwise harmed competition. Consequently, while the record does establish that manufacturers have been increasing the number of their retail outlets, it is entirely silent on the effects of this vertical expansion.