Book Review: Investigation of Conglomerate Corporations

• Author: Jules Backman
• DOI: 10.1177/0003603X7201700313
• Date: 01 September 1972
• Published date: 01 September 1972
• Subject Matter: Book Reviews

BOOK REVIEWS 961

Investigation

of

Conglomerate Corporations, AReport by the

Staff

of The

Antitrust

(Celler) Subcommittee

No.5

of the

House Committee on the Judiciary, 92nd Congress,

1st

Session,

June

1, 1971, Washington: U.S. Govt.

Printing

Office,

703 pp., $3.00.

In

1969 and 1970,the

Antitrust

Subcommittee of the.House

Committee on the

Judiciary

held public hearings to determine

"the economic and political significance of mergers and acqui-

sitions by conglomerate corporations." Testimony was taken

from company officials

and

some outsiders involved in

mergers concerning the activities of six conglomerates:

ITT,

Gulf

and

Western, Leasco

Data

Processing, Ling-Temco-

Vought, National General,

and

Litton.

In

June

1971 this

Staff

Report

of 703 pages was issued.

Students of conglomerates

and

mergers will find a wealth

of detail concerning methods of acquisitions, methods of fi-

nancing, organization

and

management of conglomerates,

and

related

matters

for

the six companies studied in the

Staff

Report

and

the accompanying volumes of hearings. They will

find little evidence concerning the overall economic signifi-

cance or the competitive impact of conglomerate acquisitions.

In

addition to its summary of the hearings on six conglom-

erates, the

Staff

Report

attempts to

bring

together

other

views on this problem. However,

it

"relied heavily" on the

FTC

Merger

Report

for

its

statistics (p.

17)-but

does

not

discuss the inadequacies of those statistics.' Thus, the

Staff

Report fails to evaluate critically the significance of aggre-

gate concentration or the

nature

of the increase. The extent

to which acquisition of foreign assets

and

of non-manufac-

turing assets caused the increase in concentration is ignored.

The importance of high capital investment in industries such

1

For

adetailed critical analysis of the

FTC

Merger Report see

Testimony of Jules Backman, Hearings on Economic Concentration,

Senate Subcommittee on

Antitrust

and Monopoly,

Part

8,

January

28,

1970, pp. 4713-35.