The government should consider human and social factors in assessing whether to permit mergers between large corporations, Congress was told yesterday by a number of witnesses with intirely different backgrounds.
Among the witnesses at a Senate Antitrust and Monopoly Subcommittee hearing on increasing economic concentration were writers Herman Wouk and John Brooks, regional brewers who bottles Billy Beer among other brands, and a delegation from Youngstown, Ohio, who maintain they are the victims of a conglomerate merger that was not challenged nine years ago and has resulted in the near shutdown of a major steel plant in the town.
Youngstown, Mayor J. Phillip Richley; the Most Rev. James W. Malone, Bishop of the Catholic Diocese of Youngstown, and Gerald Dickey, a steelworker told the subcommittee the city and its residents are the victims of 1969 acquisition of Youngstown Sheet & Tube Co. by Lykes Corp., a Louisiana-based steamship company.
The three said that Lykes diverted the $100 million average annual cash flow the steel company had away from necessary capital expenditures to other parts of the conglomerate's business, causing it to become less competitive in the steel industry.
Last fall, Lykes announced that it was closing most of its operations at Youngstown's Campbell Works plant and has laid off nearly 5,000 workers. Now, it is seeking to merge with LTV Corp., the parent of Jones & Laughlin Steel Corp.
"By deciding not to invest the capital when it was available, by deciding not to modernize, they doomed our mill, annihilated our jobs and brought havoc to our community," Dickey complained.
Richley and Bishop Malone stressed the human effects of the plant's shutdown - the unemployment, resulting depression and other mental health problems, alcoholism, plus the cost to government such as welfare payments and loss of tax revenues.
"We are hoping that we can interest you in our plight," Bishop Malone told subcommittee Chairman Sen. Edward M. Kennedy (D-Mass.), "so that you will come personally and see the effects when conglomerates irresponsibly milk the community, move out and leave a shell behind."
Kennedy indicated his concern that if the antitrust laws as written can't address the human problems created by some conglomerate mergers, "that has to be changed."
In other testimony, novelist Herman Wouk complained about the growing takeover of independent book publishing houses by corporate giants. The trend poses subtle, but definite, "long range dangers" to the free flow of ideas and art, the author of The Caine Mutiny and many other books testified.
It is the nature of a conglomerate to make sure that each acquired property makes a profit and that the loss items are cut away, he contended. "But the loss items in ideas may be the most important books of the year or the decade," he contended.
The books of Thorstein Veblin and William Faulkner "did not sell well" and the management of a conglomerate might well have decided not to publish them, he said. "Literature is the R & D of our society," he contended. "It doesn't pay off immediately."