text:
    TEITEL FILM CORP. et al. v. CUSACK et al., MEMBERS OF THE MOTION PICTURE APPEAL BOARD OF THE CITY OF CHICAGO.
    No. 787.
    Decided January 29, 1968.

      Elmer Gertz and Leon N. Miller for appellants.

      Raymond F. Simon and Marvin E. Aspen for appellees.
   Per Curiam.

This appeal seeks review of judgments of the Supreme Court of Illinois which affirmed orders of the Circuit Court of Cook County permanently enjoining the appellants from showing certain motion pictures in public places in the City of Chicago, 38 Ill. 2d 53, 230 N. E. 2d 241. The questions presented are whether the Chicago Motion Picture Censorship Ordinance is unconstitutional on its face and as applied, and whether the films involved are obscene.

The Chicago Motion Picture Censorship Ordinance prohibits the exhibition in any public place of “any picture . . . without first having secured a permit therefor from the superintendent of police.” The Superintendent is required “within three days of receipt” of films to “inspect such . . . films ... or cause them to be inspected by the Film Review Section . . . and within three days after such inspection” either to grant or deny the permit. If the permit is denied the exhibitor may within seven days seek review by the Motion Picture Appeal Board. The Appeal Board must review the film within 15 days of the request for review, and thereafter within 15 days afford the exhibitor, his agent or distributor a hearing. The Board must serve the applicant with written notice of its ruling within five days after close of the hearing. If the Board denies the permit, “the Board, within ten days from the hearing, shall file with the Circuit Court of Cook County an action for an injunction against the showing of the film.” A Circuit Court Rule, General Order 3-3, promulgated May 26, 1965, provides that a “complaint for injunction . . . shall be given priority over all other causes. The Court shall set the cause for hearing within five (5) days after the defendant has answered . ...” However, neither the rule nor any statutory or other provision assures a prompt judicial decision of the question of the alleged obscenity of the film.

The Illinois Supreme Court held “that the administration of the Chicago Motion Picture Ordinance violates no constitutional rights of the defendants.” 38 Ill. 2d, at 63, 230 N. E. 2d, at 247. We disagree. In Freedman v. Maryland, 380 U. S. 51, 58-59, we held “. . . that a noncriminal process which requires the prior submission of a film to a censor avoids constitutional infirmity only if it takes place under procedural safeguards designed to obviate the dangers of a censorship system. ... To this end, the exhibitor must be assured, by statute or authoritative judicial construction, that the censor will, within a specified brief period, either issue a license or go to court to restrain showing the film. ... [T]he procedure must also assure a prompt-final judicial decision, to minimize the deterrent effect of an interim and possibly erroneous denial of a license.” (Emphasis supplied.) The Chicago censorship procedures violate these standards in two respects. (1) The 50 to 57 days provided by the ordinance to complete the administrative process before initiation of the judicial proceeding does not satisfy the standard that the procedure must assure “that the censor will, within a specified brief period, either issue a license or go to court to restrain showing the film.” (2) The absence of any provision for a prompt judicial decision by the trial court violates the standard that “. . . the procedure must also assure a prompt final judicial decision . . . .”

Accordingly, we reverse the judgments of the Supreme Court of Illinois and remand the case for further proceedings not inconsistent with this opinion.

It is so ordered.

Mr. Justice Black and Mr. Justice Douglas, agreeing that Freedman v. Maryland, 380 U. S. 51, 58-59, requires reversal of this case, base their reversal also on Redrup v. New York, 386 U. S. 767.

Mr. Justice Harlan concurs in the result.

Mr. Justice Stewart bases his concurrence in this judgment upon Redrup v. New York, 386 U. S. 767.

       In light of our decision, we do not reach, and intimate no view upon, the question whether the films are obscene.

       The ordinance was amended during the pendency of the case before the Illinois Supreme Court to require inspection within three days after submission of the films. The members of the Superintendent’s Film Review Section, upon his request, “review each motion picture submitted and . . . recommend in writing to the superintendent of police whether to grant or deny a permit.”

       Comments of the trial judge in this case suggest doubt whether the trial court regarded compliance with this rule to be mandatory:
      “Mr. Aspen [counsel for the City]: As far as the Court is concerned, it is my understand [sic] that Judge Boyle in General Rule 3-3, which has nothing to do with the ordinance has said there will be a hearing within five days of either the filing of an answer—
      “The Court: I am going to have it changed because we just cannot set everything aside to give priority to this kind of litigation.
      “The Court: First amendment matters cannot be anymore important than any other constitutional right or any other citizen's right to have his case heard.
      “As I said before, it is far more important in my judgment to take care of the broken heads and fractured legs than it is to take care of the bleeding hearts.”


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    SMITH v. NOBLE DRILLING CORP.
    No. 648.
    Decided January 29, 1968.

      Samuel C. Gainsburgh for petitioner.

      W. Ford Reese for respondent.
   Per Curiam.

The petition for a writ of certiorari to the Supreme Court of Louisiana is granted. The judgment below is vacated and the case is remanded to the Supreme Court of Louisiana for further consideration in light of Billiot v. Sewart Seacraft, Inc., 382 F. 2d 662 (C. A. 5th Cir. 1967), and Loffland Brothers Co. v. Huckabee, 373 F. 2d 528 (C. A. 5th Cir. 1967).


text:
    GARAFOLO v. UNITED STATES.
    No. 866.
    Decided January 29, 1968.
   Per Curiam.

The petition for a writ of certiorari is granted and the judgment of the United States Court of Appeals for the Seventh Circuit is vacated. The case is remanded' to that court for further consideration in light of Smith v. Illinois, ante, p. 129.

Mr. Justice Black and Mr. Justice Harlan are of the opinion that certiorari should be denied.


author: Mr. Justice White Mr. Justice Douglas, Mr. Justice Harlan, Mr. Justice Stewart,

text:
    ALBRECHT v. HERALD CO., dba GLOBE-DEMOCRAT PUBLISHING CO.
    No. 43.
    Argued November 9, 1967.
    Decided March 4, 1968.

      Gray L. Dorsey argued the cause for petitioner. With him on the briefs was Donald S. Siegel.

      Lon Hooker argued the cause for respondent. With him on the brief was Thomas Newman.

      Arthur B. Hanson filed a brief for the American Newspaper Publishers Association, as amicus curiae, urging affirmance.
   Mr. Justice White

delivered the opinion of the Court.

A jury returned a verdict for respondent in petitioner’s suit for treble damages for violation of § 1 of the Sherman Act. Judgment was entered on the verdict and the Court of Appeals for the Eighth Circuit affirmed. 367 F. 2d 517 (1966). The question is whether the denial of petitioner’s motion for judgment notwithstanding the verdict was correctly affirmed by the Court of Appeals. Because this case presents important issues under the antitrust laws, we granted certiorari. 386 U. S. 941 (1967).

We take the facts from those stated by the Court of Appeals. Respondent publishes the Globe-Democrat, a morning newspaper distributed in the St. Louis metropolitan area by independent carriers who buy papers at wholesale and sell them at retail. There are 172 home delivery routes. Respondent advertises a suggested retail price in its newspaper. Carriers have exclusive territories which are subject to termination if prices exceed the suggested maximum. Petitioner, who had Route 99, adhered to the advertised price for some time but in 1961 raised the price to customers. After more than once objecting to this practice, respondent wrote petitioner on May 20, 1964, that because he was overcharging and because respondent had reserved the right to compete should that happen, subscribers on Route 99 were being informed by letter that respondent would itself deliver the paper to those who wanted it at the lower price. In addition to sending these letters to petitioner’s customers, respondent hired Milne Circulation Sales, Inc., which solicited readers for newspapers, to engage in telephone and house-to-house solicitation of all residents on Route 99. As a result, about 300 of petitioner’s 1,200 customers switched to direct delivery by respondent. Meanwhile, respondent continued to sell papers to petitioner but warned him that should he continue to overcharge, respondent would not have to do business with him. Since respondent did not itself want to engage in home delivery, it advertised a new route of 314 customers as available without cost. Another carrier, George Kroner, took over the route knowing that respondent would not tolerate overcharging and understanding that he might have to return the route if petitioner discontinued his pricing practice. On July 27 respondent told petitioner that it was not interested in being in the carrier business and that petitioner could have his customers back as long as he charged the suggested price. Petitioner brought this lawsuit on August 12. In response, petitioner’s appointment as a carrier was terminated and petitioner was given 60 days to arrange the sale of his route to a satisfactory replacement. Petitioner sold his route for $12,000, $1,000 more than he had paid for it but less than he could have gotten had he been able to turn over 1,200 customers instead of 900.

Petitioner’s complaint charged a combination or conspiracy in restraint of trade under § 1 of the Sherman Act. At the close of the evidence the complaint was amended to charge only a combination between respondent and “plaintiff’s customers and/or Milne Circulation Sales, Inc. and/or George Kroner.” The case went to the jury on this theory, the jury found for respondent, and judgment in its favor was entered on the verdict. The court denied petitioner’s motion for judgment notwithstanding the verdict, which asserted that under United States v. Parke, Davis & Co., 362 U. S. 29 (1960), and like cases, the undisputed facts showed as a matter of law a combination to fix resale prices of newspapers which was per se illegal under the Sherman Act. The Court of Appeals affirmed. In its view “the undisputed evidence fail[ed] to show a Sherman Act violation,” because respondent’s conduct was wholly unilateral and there was no restraint of trade. The previous decisions of this Court were deemed inappo-site to a situation in which a seller establishes maximum prices to be charged by a retailer enjoying an exclusive territory and in which the seller, who would be entitled to refuse to deal, simply engages in competition with the offending retailer. We disagree with the Court of Appeals and reverse its judgment.

On the undisputed facts recited by the Court of Appeals respondent’s conduct cannot be deemed wholly unilateral and beyond the reach of § 1 of the Sherman Act. That section covers combinations in addition to contracts and conspiracies, express or implied. The Court made this quite clear in United States v. Parke, Davis & Co., 362 U. S. 29 (1960), where it held that an illegal combination to fix prices results if a seller suggests resale prices and secures compliance by means in addition to the “mere announcement of his policy and the simple refusal to deal . . . .” Id., at 44. Parke Davis had specified resale prices for both wholesalers and retailers and had required wholesalers to refuse to deal with noncomplying retailers. It was found to have created a combination “with the retailers and the wholesalers to maintain retail prices . . . .” Id., at 45. The combination with retailers arose because their acquiescence in the suggested prices was secured by threats of termination; the combination with wholesalers arose because they cooperated in terminating price-cutting retailers.

If a combination arose when Parke Davis threatened its wholesalers with termination unless they put pressure on their retail customers, then there can be no doubt that a combination arose between respondent, Milne, and Kroner to force petitioner to conform to the advertised retail price. When respondent learned that petitioner was overcharging, it hired Milne to solicit customers away from petitioner in order to get petitioner to reduce his price. It was through the efforts of Milne, as well as because of respondent’s letter to petitioner’s customers, that about 300 customers were obtained for Kroner. Milne’s purpose was undoubtedly to earn its fee, but it was aware that the aim of the solicitation campaign was to force petitioner to lower his price. Kroner knew that respondent was giving him the customer list as part of a program to get petitioner to conform to the advertised price, and he knew that he might have to return the customers if petitioner ultimately complied with respondent’s demands.' He undertook to deliver papers at the suggested price and materially aided in the accomplishment of respondent’s plan. Given the uncontradicted facts recited by the Court of Appeals, there was a combination within the meaning of § 1 between respondent, Milne, and Kroner, and the Court of Appeals erred in holding to the contrary.

The Court of Appeals also held there was no restraint of trade, despite the long-accepted rule in § 1 cases that resale price fixing is a per se violation of the law whether done by agreement or combination. United States v. Trenton Potteries Co., 273 U. S. 392 (1927); United States v. Socony-Vacuum Oil Co., 310 U. S. 150 (1940); Kiefer-Stewart Co. v. Seagram & Sons, 340 U. S. 211 (1951); United States v. McKesson & Robbins, Inc., 351 U. S. 305 (1956).

In Kiefer-Stewart, supra, liquor distributors combined to set maximum resale prices. The Court of Appeals held the combination legal under the Sherman Act because in its view setting maximum prices “. . . constituted no restraint on trade and no interference with plaintiff’s right to engage in all the competition it desired.” 182 F. 2d 228, 235 (C. A. 7th Cir. 1950). This Court rejected that view and reversed the Court of Appeals, holding that agreements to fix maximum prices “no less than those to fix minimum prices, cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment.” 340 U. S. 211, 213.

We think Kiefer-Stewart was correctly decided and we adhere to it. Maximum and minimum price fixing may have different consequences in many situations. But schemes to fix maximum prices, by substituting the perhaps erroneous judgment of a seller for the forces of the competitive market, may severely intrude upon the ability of buyers to compete and survive in that market. Competition, even in a single product, is not cast in a single mold. Maximum prices may be fixed too low for the dealer to furnish services essential to the value which goods have for the consumer or to furnish services and conveniences which consumers desire and for which they are willing to pay. Maximum price fixing may channel distribution through a few large or specifically advantaged dealers who otherwise would be subject to significant nonprice competition. Moreover, if the actual price charged under a maximum price scheme is nearly always the fixed maximum price, which is increasingly likely as the maximum price approaches the actual cost of the dealer, the scheme tends to acquire all the attributes of an arrangement fixing minimum prices. It is our view, therefore, that the combination formed by the respondent in this case to force petitioner to maintain a specified price for the resale of the newspapers which he had purchased from respondent constituted, without more, an illegal restraint of trade under § 1 of the Sherman Act.

We also reject the suggestion of the Court of Appeals that Kiejer-Stewart is inapposite and that maximum price fixing is permissible in this case. The Court of Appeals reasoned that since respondent granted exclusive territories, a price ceiling was necessary to protect the public from price gouging by dealers who had monopoly power in their own territories. But neither the existence of exclusive territories nor the economic power they might place in the hands of the dealers was at issue before the jury. Likewise, the evidence taken was not directed to the question of whether exclusive territories had been granted or imposed as the result of an illegal combination in violation of the antitrust laws. Certainly on the record before us the Court of Appeals was not entitled to assume, as its reasoning necessarily did, that the exclusive rights granted by respondent were valid under § 1 of the Sherman Act, either alone or in conjunction with a price-fixing scheme. See United States v. Arnold, Schwinn & Co., 388 U. S. 365, 373, 379 (1967). The assertion that illegal price fixing is justified because it blunts the pernicious consequences of another distribution practice is unpersuasive. If, as the Court of Appeals, said, the economic impact of territorial exclusivity was such that the public could be protected only by otherwise illegal price fixing itself injurious to the public, the entire scheme must fall under § 1 of the Sherman Act.

In sum, the evidence cited by the Court of Appeals makes it clear that a combination in restraint of trade existed. Accordingly, it was error to affirm the judgment of the District Court which denied petitioner’s motion for judgment notwithstanding the verdict. The judgment of the Court of Appeals is reversed and the case is remanded to that court for further proceedings consistent with this opinion.

Beveraed má remmded,

Mr. Justice Douglas,

concurring.

While I join the opinion of the Court, there is a word I would add. This is a “rule of reason” case stemming from Standard Oil Co. v. United States, 221 U. S. 1, 62. Whether an exclusive territorial franchise in a vertical arrangement is per se unreasonable under the antitrust laws is a much mooted question. A fixing of prices for resale is conspicuously unreasonable, because of the great leverage that price has over the market. United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 221. The Court quite properly refuses to say whether in the newspaper distribution business an exclusive territorial franchise is illegal.

The traditional distributing agency is the neighborhood newspaper boy. Whether he would have the time, acumen, experience, or financial resources to wage competitive warfare without the protection of a territorial franchise is at least doubtful. Here, however, we have a distribution system which has the characteristics of a large retail enterprise. Petitioner’s business requires practically full time. He purchased his route for $11,000, receiving a list of subscribers, a used truck, and a newspaper-tying machine. At the time his dispute with respondent arose, there were 1,200 subscribers on the route, and that route covered “the whole northeast section” of a “big city.” Deliveries had to be made by motor vehicle and although they were usually completed by 6 o’clock in the morning, the rest of the workday was spent in billing, receiving phone calls, arranging for new service, or in placing “stop” or “start” orders on existing service. Petitioner at times hired a staff to tie and to wrap newspapers.

Under our decisions the legality of exclusive territorial franchises in the newspaper distribution business would have to be tried as a factual issue; and that was not done here.

The case is therefore close to White Motor Co. v. United States, 372 U. S. 253, where before ruling on the legality of a territorial restriction in a vertical arrangement, we remanded for findings on “the actual impact of these arrangements on competition.” Id., at 263.

Mr. Justice Harlan,

dissenting.

While I entirely agree with the views expressed by my Brother Stewart and have joined his dissenting opinion, the Court’s disregard of certain economic considerations underlying the Sherman Act warrants additional comment.

I.

The practice of setting genuine price “ceilings,” that is maximum prices, differs from the practice of fixing minimum prices, and no accumulation of pronouncements from the opinions of this Court can render the two economically equivalent.

The allegation of a combination of persons to fix maximum prices undoubtedly states a Sherman Act cause of action. In order for a plaintiff to win such a § 1 case, however, he must be able to prove the existence of the alleged combination, and the defendant must be unable, either by virtue of a per se rule or by failure of proof at trial, to show an adequate justification. It is on these two points that price ceilings differ from price floors: to hold that a combination may be inferred from the vertical dictation of a maximum price simply because it may be permissible to infer a combination from the vertical dictation of a minimum price ignores economic reality; to conclude that no acceptable justification for fixing maximum prices can be found simply because there is no acceptable justification for fixing minimum prices is to substitute blindness for analysis.

Resale price maintenance, a practice not involved here, lessens horizontal intrabrand competition. The effects, higher prices, less efficient use of resources, and an easier life for the resellers, are the same whether the price maintenance policy takes the form of a horizontal conspiracy among resellers or of vertical dictation by a manufacturer plus reseller acquiescence. This means two things. First, it is frequently possible to infer a combination of resellers behind what is presented to the world as a vertical and unilateral price policy, because it is the resellers and not the manufacturer who reap the direct benefits of the policy. Second, price floors are properly considered per se restraints, in the sense that once a combination to create them has been demonstrated, no proffered justification is an acceptable defense. Following the rule of reason, combinations to fix price floors are invariably unreasonable: to the extent that they achieve their objective, they act to the direct detriment of the public interest as viewed in the Sherman Act. In the absence of countervailing fair trade laws, all asserted justifications are, upon examination, found wanting, either because they are too trivial or elusive to warrant the expense of a trial (as is the case, for example, with a defense that price floors maintain the prestige of a product) or because they run counter to Sherman Act premises (as is the case with the defense that price maintenance enables inefficient sellers to stay in business).

Vertically imposed price ceilings are, as a matter of economic fact that this Court’s words cannot change, an altogether different matter. Other things being equal, a manufacturer would like to restrict those distributing his product to the lowest feasible profit margin, for in this way he achieves the lowest overall price to the public and the largest volume. When a manufacturer dictates a minimum resale price he is responding to the interest of his customers, who may treat his product better if they have a secure high margin of profits. When the same manufacturer dictates a price ceiling, however, he is acting directly in his own interest, and there is no room for the inference that he is merely a mechanism for accomplishing anticompetitive purposes of his customers.

Furthermore, the restraint imposed by price ceilings is of a different order from that imposed by price floors. In the present case the Court uses again the fallacious argument that price ceilings and price floors must be equally unreasonable because both “cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment.” The fact of the matter is that this statement does not in itself justify a per se rule in either the maximum or minimum price case, and that the real justification for a per se rule in the case of minimums has not been shown to exist in the case of máximums.

It has long been recognized that one of the objectives of the Sherman Act was to preserve, for social rather than economic reasons, a high degree of independence, multiplicity, and variety in the economic system. Recognition of this objective does not, however, require this Court to hold that every commercial act that fetters the freedom of some trader is a proper subject for a per se rule in the sense that it has no adequate provable justification. See, e. g., White Motor Co. v. United States, 372 U. S. 253. The per se treatment of price maintenance is justified because analysis alone, without the burden of a trial in each individual case, demonstrates that price floors are invariably harmful on balance. Price ceilings are a different matter: they do not lessen horizontal competition; they drive prices toward the level that would be set by intense competition, and they cannot go below this level unless the manufacturer who dictates them and the customer who accepts them have both miscalculated. Since price ceilings reflect the manufacturer’s view that there is insufficient competition to drive prices down to a competitive level, they have the arguable justification that they prevent retailers or wholesalers from reaping monopoly or supercompetitive profits.

When price floors and price ceilings are placed side by side, then, and the question is asked of each, “Does analysis justify a no-trial rule?” the answers must be quite different. Both practices share the negative attribute that they restrict individual discretion in the pricing area, but only the former imposes upon the public the much more significant evil of lessened competition, and, as just seen, the latter has an important arguable justification that the former does not possess. As the Court’s opinion partially but inexplicitly recognizes, in a maximum price case the asserted justification must be met on its merits, and not by incantation of a per se rule developed for an altogether different situation.

II.

The Court’s discovery in this case of (a) a combination and (b) a restraint that is per se unreasonable is beset with pitfalls. The Court relies directly on combinations with Milne and Kroner, two third parties who were simply hired and paid to do telephoning and distributing jobs that respondent could as effectively have done itself. Neither had any special interest in respondent’s objective of setting a price ceiling. If the critical question is whether a company pays one of its own employees to perform a routine task, or hires an outsider to do the same thing, the requirement of a “combination” in restraint of trade has lost all significant meaning. The point is more than that the words in a statute ought to be taken to mean something of substance. The premise of § 1 adjudication has always been that it is quite proper for a firm to set its own prices and determine its own territories, but that it may not do so in conjunction with another firm with which, in combination, it can generate market power that neither would otherwise have. A firm is not “combining” to fix its own prices or territory simply because it hires outside accountants, market analysts, advertisers by telephone or otherwise, or delivery boys. Once it is recognized that Kroner had no interest whatever in forcing his competitor to lower his price, and was merely being paid to perform a delivery job that respondent could have done itself, it is clear respondent’s activity was in its essence unilateral.

The Court, quite evidently dissatisfied with the Milne and Kroner theories of combination, goes on to suggest two others not claimed. First, it is said, petitioner might have alleged a combination with other carriers who accepted respondent’s maximum price. The difficulty with this thesis is that such a “combination” would have been wholly irrelevant to what was done to petitioner. In a price maintenance situation, each distributor does have an interest in preventing others from breaking the price line and driving everyone’s prices down, and there is thus a real symphony of interests behind the pressure exerted on any individual retailer. However, in contrast, the effectiveness of a price ceiling imposed on one distributor does not depend upon the imposition of ceilings on other distributors, be they competitive or not. Each distributor’s maximum price agreement is, for reasons already discussed, a vertical matter only, independent of agreements by other dealers. Hence the result of the Court’s theory here would be to make what was done to this petitioner illegal because of the coincidental existence of unrelated similar agreements, and to base petitioner’s right to recover upon activities that are altogether irrelevant to whatever harm he has suffered.

The Court also suggests that, under Parke, Davis, “petitioner could have claimed a combination between respondent and himself, at least as of the day he unwillingly complied with respondent’s advertised price.” This theory is intriguing, because although it is unsound on its face, it has within it the ring of something familiar. Obviously it makes no sense to deny recovery to a pressured retailer who resists temptation to the last and grant it to one who momentarily yields but is restored to virtue by the vision of treble damages. It is not the momentary acquiescence but the punishment for refusing to acquiesce that does the damage on which recovery is based.

The Court’s difficulties on all of its theories stem from its unwillingness to face the ultimate conclusion at which it has actually arrived: it is unlawful for one person to dictate price floors or price ceilings to another; any pressure brought to bear in support of such dictation renders the dictator liable to any dictatee who is damaged. The reason for the Court’s reluctance to state this conclusion bluntly is transparent: this statement of the matter takes no account of the absence of a combination or conspiracy.

This does not mean, however, that no combination or conspiracy could ever be inferred in such an ostensibly unilateral situation. It would often be proper to infer, in situations in which a manufacturer dictates a minimum price to a retailer, that the manufacturer is the mechanism for enforcing a very real combinatorial restraint among retailers who should be competing horizontally. Instead of undertaking to analyze when this inference would be proper, the Court has in the past followed the rough approximation adopted in Parke, Davis: there is no “combination” when a manufacturer simply states a resale price and announces that he will not deal with those who depart from it; there is a combination when the manufacturer goes one inch further. The magical quality in this transformation is more apparent than real, for the underlying horizontal combination may frequently be there and the Court has simply failed to state what it is.

When a manufacturer dictates a maximum price, however, the Parke, Davis approach does not yield even a satisfactory rough answer to the question “[I]s there a combination?” For the manufacturer who purports to act unilaterally in dictating a maximum price really is acting unilaterally. No one is economically interested in the price squeeze but himself. Had the Court been in the habit of analyzing the economics on which the inference of a combination may be based, it would have seen that even if combinations to fix maximum prices are as illegal as combinations to fix minimum prices the circumstances under which a combination to fix maximum prices maybe inferred are different from those which imply a combination to keep prices up.

It was for this reason that in Kiefer-Stewart Co. v. Seagram & Sons, 340 U. S. 211, the only case in this Court in which maximum resale prices have actually been held unlawful, the key question was whether there was an actual horizontal combination of manufacturers to impose on retailers a maximum resale price. The Court refused to hold that dictation of price ceilings to a single retailer by a single manufacturer was unlawful, but instead insisted upon, and found, a situation in which two manufacturers, in their common interest, combined to impose upon retailers a condition of doing business which they might not have been able to demand individually.

Kiefer-Stewart’s treatment of the combination requirement is instructive. Any manufacturer is at perfect liberty to set the prices at which he will sell to retailers, and in that way maximize his profits while lessening theirs. Competition, that is the threat that the purchasing seller will simply turn to another manufacturer, prevents the manufacturer from raising his prices beyond a certain point. It is per se unlawful, however, for two manufacturers to combine to raise their prices together, rendering each of them secure because the retailer or wholesaler has nowhere else to turn. From the manufacturer’s viewpoint, putting a ceiling on the resale price may be simply an alternative means to the end of maximizing his own profits by lessening distribution costs: instead of squeezing the reseller from the bottom he squeezes from the top. The holding of Kiefer-Stewart was that the squeeze from the top, like the squeeze from the bottom, was lawful unless by a combination of per-: sons between whom competition would otherwise have limited the power to squeeze from either direction. No combination of the kind required in Kiefer-Stewart exists here, and the Court has found no sensible substitute theory of combination.

The Court’s second difficulty in this case is to state why imposition of price ceilings is a per se unlawful restraint. The respondent offered as a defense the contention that since there was no competition between distributors to keep resale prices down, a fixed maximum price was in the interest of both the respondent itself and the public. The Court, recognizing that despite scattered dicta about maximum and minimum prices both being per se illegal there was here an alleged justification that would have to be faced on its merits, attempts to show that the defense may be disposed of without hearing evidence on it.

The Court has not been persuasive. The question in this case is not whether dictation of maximum prices is ever illegal, but whether it is always illegal. Petitioner is seeking, and now receives, a judgment notwithstanding the verdict of a jury that he had failed to show that the practice was unreasonable in this case. The best the Court can do is to list certain unfortunate consequences that maximum price dictation might have in other cases but was not shown to have here. Then, in rejecting the significant affirmative justification offered for respondent’s practice, the Court merely says, “The assertion that illegal price fixing is justified because it, blunts the pernicious consequences of another distribution practice is unpersuasive.” Ante, at 154. I shall ignore the insertion of the word “illegal,” which merely assumes the conclusion. I cannot understand why, in deciding whether a practice is an unreasonable restraint of trade, the Court finds it “unpersuasive” that the practice blunts pernicious attributes of an existing distribution system.

The Court’s only answer is that the courts below did not consider whether the existing distribution system might itself be illegal. But even assuming that respondent can conceivably be penalized for failure to raise the question whether the distribution system, unchallenged by petitioner, was lawful, the Court’s argument falls short. The Court has decided that exclusive territories and consequent market power can never be a justification for dictation of maximum prices because exclusive territories are sometimes unlawful. But they are neither always unlawful nor have they been demonstrated to be unlawful in this case.

It may well be that the mechanics of newspaper distribution are such that a city quite naturally divides itself into one or more relatively exclusive territories (sometimes called “paper routes”), giving each distributor a large degree of monopoly power.’ It is hardly farfetched to assume that a newspaper might be able to prove (if given the opportunity it is today denied) that rough territorial exclusivity is simply a fact of economic life in the newspaper distributing business, both because the nature of the enterprise dictates compactness of routes and because the number of distributors that a particular area can sustain is necessarily so small that they naturally fall into oligopolistic respect for each other’s territories, and into a pattern of price leadership.

There is no question that the ideal situation, from the point of view of both the publisher and the public, is to have a very large number of distributors intensely vying with each other in both price and service. This situation, however, may be one that it is impossible to achieve in some, perhaps in all, cities. It seems quite possible that a publisher who does not want to do his own distributing must live with the fact that there will always be a relatively small number of competing distributors, who consequently will be likely to fall into lawful but undesirable oligopolistic behavior — price leadership and territorial exclusivity.

Confronted by this situation, the publisher, who is competing with other publishers in, among other things, price and service to the public, will seek to provide efficient distribution service at the lowest possible price. These objectives would be realized by intense competition without the publisher’s interference, but in the absence of such competition the publisher must take steps of his own.

The present respondent took two steps. First, it insisted on the right to approve each distributor. Naturally, since newspapermen are notoriously realistic, it referred to the acquisition of a distributorship as the purchase of a “route.” Second, it set a maximum home delivery price and enforced it; the price could not be below the level that perfect competition would dictate without driving the distributors out of business and defeating the publisher’s whole objective. Hence the price set cannot be supposed to have been unreasonable. Respondent had no need to go to the extreme of cutting off distributors preferring to do a high-profit, low-volume business, and did not do so. It simply advertised the maximum home delivery price and created competition with any distributor not observing it. Today’s decision leaves respondent with no alternative but to use its own trucks.

For the reasons stated in my Brother StewaRt’s opinion and those stated here, I would affirm the judgment below.

Mr. Justice Stewart,

with whom Mr. Justice Harlan joins,

dissenting.

The respondent is the publisher of the only daily morning newspaper in St. Louis. The petitioner was one of some 170 independent distributors who bought copies of the paper from the respondent and sold them to householders. Each distributor had an exclusive territory subject only to the condition that his resale price not exceed a stated maximum. When the petitioner’s price did exceed that maximum, the respondent allowed and indeed actively assisted another distributor to enter the petitioner’s territory and compete with him. The Court today holds that this latter practice by the respondent subjected it to antitrust liability to the petitioner. I cannot understand why.

The case was litigated throughout by both parties upon the premise that the respondent’s granting of an exclusive territory to each distributor was a perfectly permissible practice. Upon that premise the judgment of the Court of Appeals was obviously correct. For the respondent’s conduct here was in furtherance of, not contrary to, the purposes of the antitrust laws. The petitioner was a monopolist within his own territory; he was the only person who could sell for home delivery the city’s only daily morning newspaper. But for the fact that respondent provided competition above a certain price level, the householders would have been totally without protection from the petitioner’s monopoly position. The cases cited by the petitioner, such as Kiefer-Stewart Co. v. Seagram & Sons, 340 U. S. 211, and United States v. Parke, Davis & Co., 362 U. S. 29, did not involve monopoly products distributed through exclusive territories and are thus totally inapplicable here. The thrust of those decisions is that the reseller should be free to make his own independent pricing determination. But that cannot be a proper objective where the reseller is a monopolist. To the extent that the respondent prevented the petitioner from raising his price above that which would have prevailed in a competitive market, the respondent’s actions were fully compatible with the antitrust laws.

But, says the Court, the original grant of an exclusive territory to the petitioner may have itself violated the antitrust laws. Putting aside the fact that this question was not briefed or argued either here or in the court below, I fail to understand how the illegality of the petitioner’s exclusive territory could conceivably help his case. The petitioner enjoyed the benefits of his exclusive territory subject to the condition that he keep his price at or below a stated maximum. When he did charge more, the respondent took steps to force the petitioner’s price down by introducing competition into his territory. If it was illegal in the first place for the petitioner to enjoy a conditional monopoly, I am at a loss to understand how the respondent can be liable to the petitioner for not permitting him a complete monopoly.

The Court in this case does more, I think, than simply depart from the rule of reason. Standard Oil Co. v. United States, 221 U. S. 1. The Court today stands the Sherman Act on its head.

       Section 1 of the Sherman Act, 26 Stat. 209, 15 U. S. C. § 1, in part provides that “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal ... I’

       The record indicates that petitioner raised his price by 10 cents a month.

       The record shows that at about this time petitioner lowered his price to respondent’s advertised price. Although petitioner notified all his customers of this change, respondent apparently remained unaware of it.

       Kroner testified at trial that he sold the customers he had within Route 99 to petitioner’s vendee for $3,600.

       Petitioner also charged respondent with tortious interference with business relations under state law, but this count was dismissed before trial.

       Petitioner’s original complaint broadly asserted an illegal combination under § 1 of the Sherman Act. Under Parke, Davis petitioner could have claimed a combination between respondent and himself, at least as of the day he unwillingly complied with respondent’s advertised price. Likewise, he might successfully have claimed that respondent had combined with other carriers because the firmly enforced price policy applied to all carriers, most of whom acquiesced in it. See United. States v. Arnold, Schwinn & Co., 388 U. S. 365, 372 (1967). These additional claims, however, appear to have been abandoned by petitioner when he amended his complaint in the trial court.
      Petitioner’s amended complaint did allege a combination between respondent and petitioner’s customers. Because of our disposition of this case it is unnecessary to pass on this claim. It was not, however, a frivolous contention. See Federal Trade Commission v. Beech-Nut Packing Co., 257 U. S. 441 (1922); Girardi v. Gates Rubber Co. Sales Div., Inc., 325 F. 2d 196 (C. A. 9th Cir. 1963); Graham v. Triangle Publications, Inc., 233 F. Supp. 825 (D. C. E. D. Pa. 1964), aff’d per curiam, 344 F. 2d 775 (C. A. 3d Cir. 1965).

       Our Brother HarlaN seems to state that suppliers have no interest in programs of minimum resale price maintenance, and hence that such programs are “essentially” horizontal agreements between dealers even when they appear to be imposed unilaterally and individually by a supplier on each of his dealers. Although the empirical basis for determining whether or not manufacturers benefit from minimum resale price programs appears to be inconclusive, it seems beyond dispute that a substantial number of manufacturers formulate and enforce complicated plans to maintain resale prices because they deem them advantageous. See E. Grether, Price Control Under Fair Trade Legislation, c. X (1939); Federal Trade Commission, Report- on Resale Price Maintenance 5-11, 59 (1945); Select Committee on Small Business, Fair Trade: The Problem and the Issues, H. R. Rep. No. 1292, 82d Cong., 2d Sess. (1952); Bowman, The Prerequisites and Effects of Resale Price Maintenance, 22 U. Chi. L. Rev. 825, 832-843 (1955); Corey, Fair Trade Pricing: A Reappraisal, 30 Harv. Bus. Rev. No. 5, p. 47 (1952); Fulda, Resale Price Maintenance, 21 U. Chi. L. Rev. 175, 184AL86 (1954). As a theoretical matter, it is not difficult to conceive of situations in which manufacturers would rightly regard minimum resale price maintenance to be in their interest. Maintaining minimum resale prices would benefit manufacturers when the total demand for their product would not be increased as much by the lower prices brought about by dealer competition as by some other nonprice, demand-creating activity. In particular, when total consumer demand (at least within that price range marked at the bottom by the minimum cost of manufacture and distribution and at the top by the highest price at which a price maintenance scheme can operate effectively) is affected less by price than by the number of retail outlets for the product, the availability of dealer services, or the impact of advertising and promotion, it will be in the interest of manufacturers to squelch price competition through a scheme of resale price maintenance in order to concentrate on nonprice competition. Finally, if the retail price of each of a group of competing products is stabilized through manufacturer-imposed price maintenance schemes, the danger to all the manufacturers of severe interbrand price competition is apt to be alleviated.

       Our Brother HarlaN appears to read Kiefer-Stewart as prohibiting only combinations of suppliers to squeeze retailers from the top. Under this view, scarcely derivable from the opinion in that case, signed contracts between a single supplier and his many dealers to fix maximum resale prices would not violate the Sherman Act. With all deference, we reject this view, which seems to stem from the notion that there can be no agreement violative of § 1 unless that agreement accrues to the benefit of both parties, as determined in accordance with some a priori economic model. Cf. Comment, The Per Se Illegality of Price-Fixing — Sans Power, Purpose, or Effect, 19 U. Chi. L. Rev. 837 (1952).

       In Kiejer-Stewart after the manufacturer established the maximum price at which its product could be sold, it fair-traded the product so as to fix that price as the legally permissible minimum. 182 F. 2d, at 230-231.

       “Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence. The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question the court must ordinarily consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant facts. This is not because a good intention will save an otherwise objectionable regulation or the reverse; but because knowledge of intent may help the court to interpret facts and to predict consequences.” Chicago Board of Trade v. United States, 246 U. S. 231, 238. Cf. United States v. Parke, Davis & Co., 362 U. S. 29 (economics of the drug distribution business); United States v. Arnold, Schwinn & Co., 388 U. S. 365 (economics of the bicycle business). In the latter case we noted that the evidence of record “elaborately sets forth information as to the total market interaction and interbrand competition, as well as the distribution program and practices.” 388 U. S., at 367.

       See the opinion of Judge Coffin in Quinn v. Mobil Oil Co., 375 F. 2d 273, 276.

        Kiefer-Stewart Co. v. Seagram & Sons, 340 U. S. 211, 213.

       See the analysis in the leading case, United States v. Trenton Potteries Co., 273 U. S. 392, at 395-402. Price floors, or other agreements to prevent price cutting, are there held to be per se unreasonable because they inevitably lessen competition. There is no reference to the purely collateral effect of limiting individual trader discretion, still less to a program such as the one involved in this case that does not inhibit competitive price cutting.

       The same points may be made from the perspective of the retailers or wholesalers subject to the price dictation. When the issue is minimum resale prices, those sellers who are more efficient and ambitious are likely to object to price restrictions, while the lazier and less efficient sellers will welcome their protection. When the issue is price ceilings, the matter is different. Assuming the ceilings are high enough to permit a return that will enable the seller to stay in business, a seller will object to price ceilings only because they deny him the supercompetitive return that the imperfections of competition would otherwise permit. At the same time, in stark contrast to the situation involved in resale price maintenance, no seller has any interest in insisting that price ceilings be imposed on his competitors; he is not worried that they may sell at a higher price than his own. Thus while resale price maintenance establishes what is the equivalent of a single horizontal restraint on otherwise competitive sellers, price ceilings establish merely a series of distinct vertical relationships between manufacturer and seller, with no one seller economically interested in the maintenance of the vertical relationship with any other seller.

       See Turner, The Definition of Agreement Under the Sherman Act: Conscious Parallelism and Refusals to Deal, 75 Harv. L. Rev. 655. Professor Turner (as he then was) suggested the overruling of United, States v. Colgate & Co., 250 U. S. 300, arguing, inter alia, that Colgate behavior by a manufacturer tends to produce tacit or implied minimum price agreements among otherwise competitive retailers. He suggested that “it should be perfectly clear to any manufacturer that a policy of refusing to deal with price cutters is no more nor less than an invitation [to retailers] to agree [with each other as well as with the manufacturer] on ... a minimum price . . . .” Id., at 689. (Emphasis added.)

        United States v. Parke, Davis & Co., 362 U. S. 29.

       I thought at the time Parke, Davis was decided (see my dissenting opinion in that case, 362 U. S., at 49) and continue to believe, that the result reached could not be supported on the majority’s reasoning. I am frank to say, however, that I now consider that the Parke, Davis result can be supported on Professor Turner’s rationale. See Turner, supra, n. 5, at 684-691. Further reflection on the matter also leads me to say that my statement in dissent to the effect that Parke, Davis had overruled the Colgate case was overdrawn, and further that I am not yet prepared to say that Professor Turner’s rationale necessarily carries the total discard of Colgate.

       Reasonableness is also evidenced by the abundance of persons willing to distribute newspapers at or below the fixed ceilings. The point is not affected by the fact that the distributors willing to accept respondent’s conditions were buying monopolies. The principal virtue of a monopoly is the power of the monopolist to charge supercompetitive prices. Hence it cannot be argued that the ceilings might have proved too low to attract buyers but for the fact that they were accompanied by monopoly power.

       See Elman, “Petrified Opinions” and Competitive Realities, 66 Col. L. Rev. 625, 633 (1966).

       Because the major portion of the respondent’s income derives from advertising rather than from sales to distributors, the respondent’s self-interest is in keeping the retail price of the paper low in order to increase circulation and thereby increase advertising revenues. However, neither the petitioner nor the Court suggests that the maximum set by the respondent was less than the price that would have prevailed if there had been competition among the distributors.

       See generally Elman, “Petrified Opinions” and Competitive Realities, 66 Col. L. Rev. 625 (1966). “It should be plain why there is a real danger of the abuse of the per se principle by those predisposed to offer mechanical or dogmatic solutions to legal problems. In every antitrust case there are two routes to a finding of illegality: critically analyzing the competitive effects and possible justifications of the challenged practice; or subsuming it under one of the per se rules. The latter route is naturally the more tempting; it is easier to classify a practice in a forbidden category than to demonstrate from the ground up, as it were, why it is against public policy and should be forbidden.” Id., at 627.

       “The Supreme Court shows a growing determination in its antitrust decisions to convert laws designed to promote competition into laws which regulate or hamper the competitive process.” Bowman, Restraint of Trade by the Supreme Court: The Utah Pie Case, 77 Yale L. J. 70 (1967).


author:
Mr. Justice White
      Mr. Justice Harlan,

text:
    UNITED STATES v. THIRD NATIONAL BANK IN NASHVILLE et al.
    No. 86.
    Argued December 11, 1967.
    Decided March 4, 1968.

      Daniel M. Friedman argued the cause for the United States. On the brief were Solicitor General Griswold, Assistant Attorney General Turner, Richard A. Posner and Barry Grossman.

      E. William Henry argued the cause for appellees Third National Bank in Nashville et al. With him on the brief were Paul A. Porter, Dennis G. Lyons, Frank M. Farris, Jr., Edwin F. Hunt and John J. Hooker, Jr. Joseph J. O’Malley argued the cause for appellee Camp, Comptroller of the Currency. With him on the brief were Robert Bloom, and Charles H. McEnerney, Jr.

   Mr. Justice White

delivered the opinion of the Court.

In this case the United States appeals from a District Court decision upholding the merger of Third National Bank in Nashville and Nashville Bank and Trust Company against challenge under § 7 of the Clayton Act. The court below concluded that the merger, which joined the second largest and the fourth largest banks in Davidson County, Tennessee, into a bank which immediately after the merger was the county’s largest bank but since has become the second largest, would not tend substantially to lessen competition and also that any anticom-petitive effect would be outweighed by the “convenience and needs of the community to be served.” We disagree with the District Court on both issues. We hold that the United States established that this merger would tend to lessen competition, and also that the District Court did not point to community benefits in terms of “convenience and needs” sufficient to outweigh the anticompetitive impact.

I.

Like other urban centers in the Southeast, Nashville has grown steadily since World War II in both population and economic activity. Commercial banks, as “the intermediaries in most financial transactions,” grew along with their city. From 1955 to 1964, for example, total assets of all banks located in Davidson County increased from $548,300,000 to $1,053,700,000, an increase of 92.2%. The number of banks hardly changed. Indeed, since 1927 there has been only one new bank in the county, Capital City Bank, and at the time of this merger it had achieved only .9% of the county’s bank assets. The other banks at the time of the merger, and their percentage of total bank assets in Davidson County, were First American National, 38.3%; Third National, 33.6% ; Commerce Union, 21.2%; Nashville Bank, 4.8%; and three small banks, two of them located in Davidson County towns outside Nashville, .6%, .3%, and .3%. The merger before us thus joined one of the three very large banks in Nashville and the one middle-sized bank. Its result was to increase from 93.1% to 97.9% the percentage of total assets held by the three largest banks and from 71.9% to 76.7% the percentage held by the two largest institutions.

The two merging banks played significantly different roles in Nashville banking. Third National was characterized by the Comptroller of the Currency as one of the strongest and best managed banks in the Nation and by the District Court as “strong, dynamic and aggressive.” It had “a history of innovating services or promptly providing new services,” a recruitment program at local universities, a continuous audit program, and a legal lending limit of $2,000,000. It had 14 branches at the time of the merger and served as correspondent for smaller banks located throughout the central south.

Nashville Bank and Trust approached the merger with a more checkered history and a less dynamic present. Until 1956 it was largely a trust institution. In that year, under the direction of W. S. Hackworth, it changed its name from Nashville Trust Company and embarked on a drive to become a full-service commercial bank. This program enjoyed considerable success. Between 1955 and 1964, Nashville Bank’s deposits grew from $20,800,000 to $45,500,000, and its loans and discounts from $8,100,000 to $22,800,000. In both categories it grew faster than the county average and faster than Third National. This growth, however, occurred at a substantially faster rate before 1960 than after that year. Before 1960 it was growing more rapidly than the other banks in the county, and after that year more slowly. Its share of total Nashville banking business thus declined from a high of 5.72% on June 30, 1960, to 4.83% on June 30, 1964.

The District Court made elaborate findings as to why Nashville Bank and Trust “reached a plateau on which it remained until the date of the merger” and why in this period “it was a stagnant and floundering bank.” From those findings, and from the broad picture of Nashville Bank’s history and operations which emerges from the testimony and exhibits in this case, it appears that the principal reason was that key members of its management, the men who had been responsible for the bank’s progress in the late 1950’s, had advanced in age and either retired or slowed their activities. The bank’s officials nonetheless made but scant efforts to recruit and advance young talent. Nashville Bank paid substantially lower salaries than the other Nashville banks, had no funded pension plan, and conducted no systematic recruiting program. On January 1, 1964, the bank’s board of directors had 13 members, of whom four were 75 or over, nine were 65 or older, and 11 were 63 or older. Of the six department heads four were 65 or older and the other two were 59. The average age of the 15 officers working outside the trust department was over 60. The District Court painted in somber hues the banking policies and the economic results which seemed to flow from the failure to hire young talent. Essentially, Nashville Bank was not aggressive or efficient, and it had stopped growing, so that it could not open branches (it had only one) or embark on a correspondent banking program. It was nevertheless an institution of substantial size, with assets of $50,900,000 and deposits of $45,500,000. It was profitable, and it offered somewhat different services, occasionally at somewhat lower rates, than its competitors.

In January 1964, the individuals who had owned controlling shares of Nashville Bank and Trust decided to sell 10,845 shares, a controlling interest, to a group of prominent Nashville citizens headed by William Weaver. The price was $350 per share. In February 1964, the Weaver group opened negotiations looking to a merger with Commerce Union Bank, Nashville’s third largest. The negotiations were unsuccessful, however, because Weaver demanded $460 per share while Commerce Union offered only $360. Weaver then negotiated the sale to Third National, at a price of about $420 per share. The merger was approved by the boards of directors of both banks on March 12, 1964, and, after approval by the Comptroller of the Currency, was consummated on August 18, 1964.

II.

The legislative history of the Bank Merger Act of 1966 leaves no doubt that the Act was passed to make substantial changes in the law applicable to bank mergers. Congress was evidently dissatisfied with the 1960 Bank Merger Act as that Act was interpreted in United States v. Philadelphia National Bank, 374 U. S. 321 (1963), and in United States v. First National Bank & Trust Co. of Lexington, 376 U. S. 665 (1964), and wished to alter both the procedures by which the Justice Department challenges bank mergers and the legal standard which courts apply in judging those mergers. The resulting statute, however, as some members of Congress recognized, was more clear and more specific in prescribing new procedures for testing mergers than in expounding the new standard by which they should be judged.

Last Term, in United States v. First City National Bank of Houston, 386 U. S. 361 (1967), this Court interpreted the procedural provisions of the 1966 Act, holding that the Bank Merger Act provided for continued scrutiny of bank mergers under the Sherman Act and the Clayton Act, but had created a new defense, with the merging banks having the burden of proving that defense. The task of the district courts was to inquire de novo into the validity of a bank merger approved by the relevant bank regulatory agency to determine, first, whether the merger offended the antitrust laws and, second, if it did, whether the banks had established that the merger was nonetheless justified by “the convenience and needs of the community to be served.” Houston Bank reserved “all questions” concerning the substantive meaning of the “convenience and needs” defense. See 386 U. S., at 369, n. 1.

III.

The proceedings that have occurred until now regarding validity of the merger here before us have been scrambled and confused, largely because the relevant statute, the 1966 Bank Merger Act, became law just prior to the trial and did not receive its first interpretation by this Court, in Houston Bank, until the decision below had been rendered.

The two banks agreed to merge on March 12, 1964. On April 27, 1964, they applied to the Comptroller of the Currency for approval, as the 1960 Bank Merger Act required. Pursuant to that Act, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Department of Justice reported to the Comptroller of the Currency on “the competitive factors involved.” The Federal Reserve Board reported that the merger “would have clearly adverse effects on competition” by “eliminat[ing] direct competition which exists between participants and . . . increas [ing] significantly . . . already heavy concentration . .. .” The Federal Deposit Insurance Corporation reported that “the effect of the proposed merger on competition would be unfavorable.” The Department of Justice reported that the merger “would have severe anticompetitive effects upon banking competition in Metropolitan Nashville.” The Comptroller of the Currency, however, concluded that the merger would not lessen competition and would “improve the charter bank’s ability to serve the convenience and needs of the Nashville public.” On August 4, 1964, he approved the merger.

On August 10, 1964, the United States, as this Court’s decision in Philadelphia Bank authorized, sued in federal district court charging that the proposed merger was in violation of § 7 of the Clayton Act and § 1 of the Sherman Act. On August 18, 1964, the District Court refused the Government’s request for a preliminary injunction staying consummation, and on that day the two banks merged.

The antitrust suit against the merger had not come to trial when, on February 21, 1966, the Bank Merger Act of 1966 took effect. Congress had devoted much attention to the impact of that Act on bank mergers still in the process of litigation. In § 2 of the Act, 80 Stat. 10, Congress excluded from all antitrust liability mergers which had been consummated before June 17, 1963, the date of this Court’s Philadelphia Bank decision, and those consummated between June 17, 1963, and February 21, 1966, as to which the Attorney General had not begun litigation on February 21, 1966. However, although Congress considered amendments which would have provided antitrust immunity also for those bank mergers consummated after June 17, 1963, and already the subject of litigation, a decision was made to leave those mergers subject to liability, apparently because the merging parties had known, from Philadelphia Bank, that their consummation was with the risk of an eventual order to dissolve. Congress did provide, in § 2 (c) of the Act, that courts hearing such cases “shall apply the substantive rule of law set forth” in the Act.

Since the trial had been held after the 1966 Act took effect, and since the Comptroller of the Currency and other witnesses, directed by counsel, had addressed themselves to the statutory language contained in that Act, the District Court saw no need to remand to the Comptroller for a new opinion in light of the Act, as was ordered in United States v. Crocker-Anglo National Bank, 263 F. Supp. 125 (D. C. N. D. Cal. 1966). Proceeding to decide the case, the District Judge held that under the new Act, violation of antitrust standards was “primarily a legal issue ... [on which courts should make] an independent determination/’ while “convenience and needs of the community is, in the language of the Crocker-Anglo opinion, 'plainly and unquestionably a legislative or administrative determination’ ... [on which] the Comptroller’s findings should not be disturbed unless they are unsupported by substantial evidence.” The court concluded that the merger did not offend antitrust standards and that the Comptroller’s conclusion that it would benefit the community was supported by substantial evidence. The relief sought by the Justice Department was denied.

IV.

The District Court asserted that one effect of the Bank Merger Act of 1966 was to alter the standards used in determining whether a merger is in violation of § 7 of the Clayton Act and § 1 of the Sherman Act. Essentially, the District Court mandated a return to United States v. Columbia Steel Co., 334 U. S. 495 (1948), which this Court has held to be “confined to its special facts.” Lexington Bank, 376 U. S., at 672. In later cases, especially Philadelphia Bank, supra; Lexington Bank, supra; United States v. Aluminum Co. of America, 377 U. S. 271 (1964); and United States v. Continental Can Co., 378 U. S. 441 (1964), this Court has rejected the Columbia Steel approach to determining whether a merger will tend “substantially to lessen competition.” We find in the 1966 Act, which adopted precisely that § 7 Clayton Act phrase, as well as the “restraint of trade” language of Sherman Act § 1, no intention to adopt an “antitrust standard” for bank cases different from that used generally in the law. Only one conclusion can be drawn from the exhaustive legislative deliberations that preceded passage of the Act: Congress intended bank mergers first to be subject to the usual antitrust analysis; if a merger failed that scrutiny, it was to be permissible only if the merging banks could establish that the merger’s benefits to the community would outweigh its anticompetitive disadvantages. See Houston Bank, supra. Congressman Minish spoke in tune with the language of the Act and the statements of his colleagues when he said:

“It should also be clear from the language of paragraph (5) (b) of this bill, which establishes this single standard, that the competitive factor to be used is drawn directly from Clayton Act section 7 and Sherman Act section 1. Thus, all of the principles developed over the last 75 years in regard to these statutes, such as the definition of relevant market and the failing company doctrine are carried forward unchanged by this proposed legislation.”

We therefore hold that the District Court employed an erroneous standard in applying § 7 of the Clayton Act to the merger. In addition we hold that, appraised by the test enunciated in recent Clayton Act cases, the tendency of the merger substantially to lessen competition is apparent. Nashville had three large banks and one of middle size. In this merger the bank of middle size was absorbed by the second largest of the big banks. By the merger the market share of the three largest banks rose from 93% to 98%; the merged bank alone had almost 40% of the Nashville banking business. In addition, the record is replete with evidence that Nashville Bank and Trust was in fact an important competitive element in certain, though not in all, facets of Nashville banking. It offered somewhat different services, at somewhat different rates, from those offered by other banks, and some customers found those services desirable. Although Nashville Bank failed to increase its percentage share of the Nashville banking market after 1960, the absolute size of its business increased steadily from 1956, when it entered seriously into the commercial banking market, to the date of the merger. Throughout this period it was profitable. The record permits no conclusion that Nashville Bank was in any way a “failing” company. See International Shoe Co. v. FTC, 280 U. S. 291 (1930). On these facts, the conclusion is inescapable that the merger of Third National Bank in Nashville with Nashville Bank and Trust Co. tended to lessen competition in the Nashville commercial banking market. Philadelphia Bank, supra.

V.

Because the District Court erroneously concluded that the merger would not tend to lessen competition, its conclusion upon weighing the competitive effect against the asserted benefits to the community is suspect. To weigh adequately one of these factors against the other requires a proper conclusion as to each. Having decided that the court below erred in assessing competitive impact, we should remand, so that the District Court can perform again the balancing process mandated by the Act.

There is, however, an additional reason to remand. In our view, the District Court misapprehended the meaning of the phrase “convenience and needs of the community”; it misunderstood the weight to be given the relevant factors when seeking to determine whether the anticompetitive effects of a merger are “clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.”

The purpose of the Bank Merger Act was to permit certain bank mergers even though they tended to lessen competition in the relevant market. Congress felt that the role of banks in a community’s economic life was such that the public interest would sometimes be served by a bank merger even though the merger lessened competition. The public interest was the ultimate test imposed. This is clear not only from the language of the Act but from the statements of those who supported it while the Act was under consideration:

“Mr. ASHLEY. ... In other words, the merger must be shown to be sufficiently beneficial in meeting the convenience and needs of the community to be served that, on balance, it may properly be regarded as in the public interest.
“Mr. MULTER. ... I believe it was the intention of the Congress originally in 1960 when we enacted the Bank Merger Act that the public interest should be paramount in making any determination with reference to a merger. The words 'in the public interest’ are again written into this bill now and will remain in the law so that there will be no question but that the courts and the agencies must take the public interest into account.
“Mr. ASHLEY. Is .the gentleman saying, as I believe he is, that it is the consensus of the committee, in drafting this bill, that the public interest is to be considered as combining the consideration both of the anticompetitive factors of a particular merger on the one hand, and, on the other, the needs and convenience of the community that may derive from that merger, which, as I say, may result in a diminution of competition; in other words, that the public interest has got to involve a consideration of both of these rather considerable factors?
“Mr. STEPHENS. That is correct . . . .” 112 Cong. Rec. 2446, 2449, 2450.

It is plain that Congress considered both competition in commercial banking and satisfaction of “the convenience and needs of the community” to be in the public interest. It concluded that a merger should be judged in terms of its overall effect upon the public interest. If a merger posed a choice between preserving competition and satisfying the requirements of convenience and need, the injury and benefit were to be weighed and decision was to rest on which alternative better served the public interest.

The necessity of choosing is most clearly posed where the proposed merger would create an institution with capabilities for serving the public interest not possessed by either of the two merging institutions alone and where the potential could be realized only through merger. Thus, it might be claimed, as it is in this case, that a combined bank would have a greater lending capacity and hence be better equipped to serve the financial needs of the community. In Philadelphia Bank, 374 U. S., at 370-371, this Court, acting under the 1960 Bank Merger Act, rejected the relevance of the combined bank’s ability to serve Philadelphia by making large loans that could otherwise only be obtained in New York. The Court found no statutory authorization for considering such a benefit in appraising the legality of a merger. Expressions in Congress during consideration of the 1966 Act suggest that one purpose of that Act was to give this factor, not previously relevant in appraising bank mergers, suitable weight in judging their validity. In the case before us the District Court’s findings of fact suggest that the new bank, with a 20% greater lending limit than Third National Bank previously had, was able to make larger loans, for which Nashville area companies had previously to go to Chicago or New York. The District Court also stated that because Third National Bank operated with a .higher loans-to-deposits ratio than Nashville Bank and Trust, combining their deposits and applying the Third National Bank ratio to the total increased available lending capacity in Nashville by about $2,800,000. But the District Court was not specific in describing the beneficial consequences of such results for the Nashville community, or in defining the value of these additions, especially as compared with the other, and less desirable, results of the merger. Absent such findings, the increased lending capacity of the new bank weighs very little in the balance.

Congress was also concerned about banks in danger of collapse — banks not so deeply in trouble as to call forth the traditional “failing company” defense, but nonetheless in danger of becoming before long financially unsound institutions. Congress seems to have felt that a bank failure is a much greater community catastrophe than the failure of an industrial or retail enterprise, and that a much smaller risk of failure than that required by the failing company doctrine should be sufficient to justify the rather radical preventive step of an anticompeti-tive merger. The Findings of Fact of the District Court included the information that Nashville Bank and Trust Company had a higher than usual percentage of unsound loans, the result of unsatisfactory procedures for investigating and judging credit risks, and that its “rating” had been changed in 1962 from “satisfactory” to “fair.” The District Court drew no conclusion about the extent of the danger these conditions posed for Nashville Bank and Trust’s future, about the feasibility of curative measures short of merger, or about whether other healthy aspects of the bank’s condition — for instance its steady profitability, including after-tax earnings of $368,000 in 1963 — removed any danger of failure in the foreseeable ■future. Absent findings and conclusions of this nature, the District Court seemed to be holding that the merger should be approved simply because Nashville Bank and Trust Company could be a better bank and could render better banking services.

The District Court, it appears, considered the merger beneficial to the community because Nashville Bank and Trust had only one branch, because it had no program of correspondent banking, because its operations were not computerized, because it emphasized real estate loans rather than commercial loans, because its management was old and unable to render sound business advice to borrowers, because it was not recruiting new talent, and because its salary scale was low. Hence a merger was justified because it would solve these problems and produce an institution which, in the words of the House Report, would be capable of

“furnishing better overall service to the community, even though the reduction in the number of competing units, or the concentration in the share of the market in one or more lines of commerce, might result under general antitrust law criteria in a substantial lessening of competition.” H. R. Rep. No. 1221, 89th Cong., 2d Sess., 3. (Emphasis in original.)

Undeniably, Nashville Bank and Trust had significant problems of the kind outlined in the findings of the District Court, problems which were primarily rooted in unsatisfactory and backward management. Just as surely, securing better banking service for the community is a proper element for consideration in weighing convenience and need against the loss of competition. Nor is there any doubt on this record that merger with Third National would very probably end the managerial problems of Nashville Bank and Trust and secure the better use of its assets in the public interest. Thus if the gains in better service outweighed the anticompetitive detriment and the merger was essential to secure this net gain to the public interest, the merger should be approved.

But this analysis puts aside possible ways of satisfying the requirement of convenience and need without resort to merger. If the injury to the public interest flowing from the loss of competition could be avoided and the convenience and needs of the community benefited in ways short of merger but within the competence of reasonably able businessmen, the situation is radically different. In such circumstances, we seriously doubt that Congress intended a merger to be authorized by either the banking agencies or the courts. If, for example, just prior to this merger, an experienced banker with competent associates had offered to take over the active management of the bank or another competent businessman with a willingness to tackle the management problems of the bank had offered to buy out the Weaver interests at an acceptable price, it seems obvious that the Weaver group, which seeks to justify the merger in terms of producing an institution rendering better banking service, should not be permitted to merge and to ignore an available alternative. Otherwise, the benefits of competition, acknowledged by Congress, would be sacrificed needlessly. For the same reasons, we think it was incumbent upon those seeking to merge in this case to demonstrate that they made reasonable efforts to solve the management dilemma of Nashville Bank short of merger with a major competitor but failed in these attempts, or that any such efforts would have been unlikely to succeed.

This seems to us the most rational reading of the Act, which was a compromise and satisfied none of the protagonists in this extended controversy. The Act directs the agencies and the courts to consider managerial as well as financial resources in weighing a proposed merger. However, the Act requires as well that the “future prospects of the existing and proposed institutions” be appraised. Part of such appraisal, where managerial deficiencies exist as they do in this case, is determining whether the merging bank is capable of obtaining its own improved management. This test does not demand the impossible or the unreasonable. It merely insists that before a merger injurious to the public interest is approved, a showing be made that the gain expected from the merger cannot reasonably be expected through other means.

The question we therefore face is whether the findings of the District Court sufficiently or reliably establish the unavailability of alternative solutions to the woes of Nashville Bank and Trust Company. In our view, they do not. The District Court described the nature and extent of the bank’s managerial shortcomings. It noted that the Weaver group had discussed these matters extensively with a number of persons, including bankers, and had learned that recruiting new management would be “extremely difficult” at the salaries paid by Nashville Bank. And it concluded that management procurement was difficult for banks in general and an “almost insoluble” problem for Nashville Bank and Trust.

Just how insoluble was not made clear. The District Court did not ask whether the Weaver group had made concrete efforts to recruit new management, especially a chief executive officer, who was needed most. The record seems clear that they made no proposals to any individual prospects in or outside of Nashville, save one rather casual letter to a banking acquaintance in New York, and that they neither sought nor cared to seek the help of firms specializing in finding or furnishing new management. The court made no reference to the possibility that the new owners themselves might have taken active charge of the bank. None of them was a banker, but their successful predecessor Hackworth had not been one before becoming president of Nashville Bank, Nor did the court assess the possibility of a sale to others who might have been willing to face up to the management difficulties over a more extended period. We find nothing in the findings indicating that a bank with assets of $50,000,000 was simply too small to attract competent management or that the Weaver group, the new owners, were mtran-sigently insisting on unreasonably conservative managerial policies. Indeed, the Weaver group included competent and experienced men who realized the desirability of improving an unsatisfactory situation. Rather than making serious efforts to do so themselves or to sell to others who would, they preferred to merge with a competing bank — a step which produced a profit of $750,000 on a two-month investment of $3,800,000.

The burden of showing that an anticompetitive bank merger would be in the public interest because of the benefits it would bring to the convenience and needs of the community to be served rests on the merging banks. Houston Bank, supra. A showing that one bank needed more lively and efficient management, absent a showing that the alternative means for securing such management without a merger would present unusually severe difficulties, cannot be considered to satisfy that burden.

We therefore conclude that the District Court was in error in holding that the factors it cited as ways in which this merger benefited the Nashville community were sufficient to outweigh the anticompetitive effects of the merger. The case must be remanded so that the District Court can consider again the application of the Bank Merger Act to the facts of this merger. Because the District Court heard this case before Houston Bank was decided, it may wish to consider reopening the record, so that the parties will have an opportunity to present new evidence in light of the intervening interpretations of the Act. The judgment below is reversed and the case is remanded for proceedings consistent with this opinion.

It is so ordered.

Mr. Justice Foutas and Mr. Justice Marshall took no part in the consideration or decision of this case.

Mr. Justice Harlan,

whom Mr. Justice Stewart joins,

concurring in part and dissenting in part.

My understanding of the procedural structure of the Bank Merger Act of 1966, based on our decision last Term in United States v. First City National Bank of Houston, 386 U. S. 361, 364, is that the Act requires the District Court to engage in a two-step process. First, the District Court must decide whether the merger, considered solely from an antitrust viewpoint, would violate the Clayton Act standard embodied in the Bank Merger Act. If it would not, the inquiry is over. If there would be a violation, then the District Court must go on to decide whether “the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.” In making the latter decision, the District Court must again evaluate the antitrust factor, this time in a less polar way. For a comparatively minor violation of the Clayton Act, like that in this case, obviously may be more readily outweighed by factors relating to “convenience and needs” than may a relatively serious infraction.

Turning to the application of the Act to this case, the first question is whether the merger, as an antitrust matter, would violate the Clayton Act. I continue to disagree, particularly in the banking field, with the “numbers game” test for determining Clayton Act violations which was adopted by this Court in United States v. Philadelphia National Bank, 374 U. S. 321. However, I consider myself bound by that decision, and under its dictates I concur in the Court’s finding that this merger would violate the Act.

I also concur in the Court’s decision that this case must be remanded so that there may be a new application of the second-step balancing process. In this case, which was decided before our decision in Houston Bank, supra, the District Court either omitted the first of the two indicated procedural steps or concluded, incorrectly, that the merger would not violate the Clayton Act. In either event, the error may have caused the District Court to misconceive the antitrust “threshold” at which the second-step balancing process was intended to come into play. This, in turn, may have led the court to give the “anticompetitive effect” of the merger a different weight in the balance than was intended by the framers of the Bank Merger Act. Hence, the case must be remanded to the District Court so that it may reweigh the competing factors in light of the correct antitrust threshold.

With regard to the “convenience and needs” side of the balance, I am in accord with the Court’s ruling that a merger should not be approved under the 1966 Act unless the District Court finds that the benefits conferred upon the community by the merger could not reasonably have been achieved in other ways. Unlike the Court, however, I conclude from the record that the District Court did make adequate findings on this issue. The record reveals that many witnesses testified that Nashville Bank had problems of real magnitude, the greatest being to find replacements for key executives. Mr. Weaver, the leader of the group which purchased control of the bank not long before the merger, testified that initially his group had intended to operate the bank themselves, but that talks with many bankers had convinced him that his group could not solve the bank’s problems. The head of an executive-placement firm testified that he did not believe that he could have found new executives for Nashville Bank, in light of its overall situation. Although there was testimony in rebuttal, including that of another recruiter of executives, to the effect that the problems were not unsolvable, I cannot conclude that the District Court committed error when it held that

“While there is some conflict, the preponderance of the evidence is that it would have been practically impossible within any reasonable period of time to obtain adequate managerial replacements either from within the bank or from the outside, a product of the bank’s failure ... to provide itself with the facilities, procedures and equipment required to maintain a competitive posture.” 260 F. Supp. 869, 881.

In sum, what I would consider to be the scope of the proceedings on remand is this. In light of our holding that a Clayton Act violation has been made out, further consideration of the first-step antitrust issue by the District Court is foreclosed. Believing, as I do but contrary to the Court, that the findings already made by the District Court as to the alternatives to merger are adequate, in my view the only question for the District Court to consider respecting the second step is whether, because of its character in light of the antitrust standard now set forth, the antitrust violation should yield to other factors bearing on public “convenience arid needs.”

       The opinion of the District Court is reported at 260 F. Supp. 869 (D. C. M. D. Tenn. 1966). Its findings of fact and conclusions of law are unreported. Probable jurisdiction was noted at 388 U. S. 905 (1967).

        United States v. Philadelphia National Bank, 374 U. S. 321, 326 (1963).

       We cite percentages of total assets for convenience, not because they are alone a valid indication of a bank's market share. The percentages of total deposits and of total loans held by the eight Davidson County banks varied insignificantly from the percentages of total assets. See the District Court’s Finding of Fact No. 66.

       260 F. Supp., at 881.

       Finding of Fact No. 91.

       Finding of Fact No. 134.

       80 Stat. 7, 12 U. S. C. § 1828 (c) (1964 ed., Supp. II). The Act provides, in relevant part:
      “(5) The responsible agency shall not approve—
      “(A) any proposed merger transaction which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the United States, or
      “(B) any other proposed merger transaction whose effect in any section of the country may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.
      “In every case, the responsible agency shall take into consideration the financial and managerial resources and future prospects of the existing and proposed institutions, and the convenience and needs of the community to be served.
      “(7)
      “(B) In any judicial proceeding attacking a merger transaction approved under paragraph (5) on the ground that the merger transaction alone and of itself constituted a violation of aSiy antitrust laws other than [§2 of the Sherman Act], the standards applied by the court shall be identical with those that the banking agencies are directed to apply under paragraph (5).”

       See, e. g., 112 Cong. Rec. 2447 (remarks of Congressman Fino).

       38 Stat. 731, as amended, 64 Stat. 1125, 15 U. S. C. § 18.

       26 Stat. 209, 15 U. S. C. § 1. The United States appealed to this Court only from the dismissal of the § 7 Clayton Act charge. The § 1 Sherman Act count is therefore not before us.

       Liability for monopolization under § 2 of the Sherman Act was not excluded.

       Three mergers are in this category: the Nashville merger at issue here; a California merger, see United States v. Crocker-Anglo National Bank, 263 F. Supp. 125 (D. C. N. D. Cal. 1966); and a St. Louis merger. See H. R. Rep. No. 1221, 89th Cong., 2d Sess., 4.

       See, e. g., 112’Cong. Rec. 2465 (remarks of Congressman Ashley).

       260 F. Supp., at 874. If the District Court failed to review the issues in the case de novo, as this quotation suggests, it committed error. Houston Bank, supra. Other statements in the opinion and findings below suggest that a de novo judgment may also have been reached by the District Court. Our disposition of the case makes it unnecessary to decide whether undue deference was paid to the Comptroller’s judgment.

       We also find in the Act no intention to alter the traditional methods of defining relevant markets in which to appraise the anti-competitive effect of a merger, and so agree with the District Court that commercial banking in Davidson County was the relevant market for appraising this merger.

       112 Cong. Rec. 2451. See also 112 Cong. Rec. 2441-2442 (remarks of Congressman Patman); 112 Cong. Rec. 2455 (remarks of Congressman Annunzio); 112 Cong. Rec. 2452 (remarks of Congressman Reuss); 112 Cong. Rec. 2655 (statement of Senator Robertson).

         Although the District Court erroneously determined the antitrust impact of the merger, its judgment that the merger was not unlawful under the Act may nevertheless have resulted from a sufficient weighing of the evidence before it. Some of the findings below suggest the view that the merger would tend to lessen competition but that this anticompetitive effect would be outweighed by benefits to the community. The argument need not be pursued, however, since we hold that the District Court also misapplied the Act’s convenience-and-needs provision.

       See, e. g., 112 Cong. Rec. 2663 (remarks of Senator Robertson).

       See, e. g., 112 Cong. Rec. 2459-2460 (remarks of Congressman Multer).

       In Finding of Fact No. 181 the District Court concluded that the bank’s “apparently good earnings record” would have been diminished, absent a merger, by “the expenditures which needed to be made for the proper maintenance of the bank.” Among these expenditures were increased salaries, automation, and establishment of additional branch offices. There is no reason to think that such investment of accrued profits would not have been rewarded with a fair return in the form of increased future profits.

       The District Court did conclude, in Finding of Fact No. 184, that the merger was “a business necessity” for Nashville Bank and Trust Co. This general conclusion, without supporting findings, hardly establishes the possibility of eventual failure.

       An official of a company specializing in recruitment of executives did testify for the banks at the trial. In his opinion, recruiting executives for Nashville Bank and Trust would have been extremely difficult.

       The record contains the revealing statement by William C. Weaver, Jr., the leading member of the group which owned the bank at the time of the merger:
      “We finally concluded before we agreed to the merger agreement with the Third National Bank that, if one of us, one of our group, was unable to go down there to the Trust Company and devote full time to its affairs — I would like to say right here that none of us in the group had any commercial banking experience, and that was a serious problem.
      “But we concluded that if we were unable to devote our full time to the affairs of the bank, it would be in the best interests of the customers of the bank, the employees of the bank, the stockholders of the bank, and the Nashville community, for us to merge with the Third National Bank.”
      Mr. Weaver seems to have felt that one or more members of the new ownership group would have been able to furnish satisfactory executive leadership for the bank.

       Capital City Bank, founded in 1960 and but one-fourth the size of Nashville Bank and Trust Co., was apparently flourishing.
      In this regard, a recent study concluded that “the small bank can compete successfully with the large bank — if it has the will to do so.” Kohn, Competitive Capabilities of Small Banks, 60 Banking, January 1968, at 64, reporting on the New York State Banking Department’s research study, The Future of Small Banks.

       80 Stat. 7, 12 U. S. C. § 1828 (e) (1964 ed., Supp. II).

       Bank Merger Act of 1966, amending § 18 (c) (5) (B) of the Federal Deposit Insurance Act, 12 U. S. C. § 1828 (e) (5) (B) (1964 ed., Supp. II).

       The District Court’s opinion is unclear as to whether the court considered it necessary to make a discrete finding under the Clayton Act.

       An account of Nashville Bank’s overall situation appears in the Court’s opinion, ante, at 175-176.


text:
    RAINWATER et al. v. FLORIDA.
    No. 18.
    Decided March 4, 1968.

      Alfred L. Scanlan and J. Edward Worton for petitioners.

      Solicitor General Marshall filed a memorandum for the United States.
   Per Curiam.

The petition for a writ of certiorari is granted, the judgment of the court below is vacated, and the case is remanded for further consideration in the light of Marchetti v. United States, ante, p. 39. Cf. Hoffa v. United States, 387 U. S. 231; Kolod v. United States, ante, p. 136.

Mr. Justice Marshall took no part in the consideration or decision of this case.


text:
    ROBERTS v. WARDEN, MARYLAND PENITENTIARY.
    No. 950,
    Misc.
    Decided March 4, 1968.
   Per Curiam.

The appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    LEE v. KANSAS CITY, MISSOURI.
    No. 383.
    Decided March 4, 1968.

      Michael J. Drape for appellant.

      Jack L. Simms for appellee.
   Per Curiam.

The judgment of the Supreme Court of Missouri is vacated and the case is remanded to that court for further consideration in the light of Marchetti v. United States, ante, p. 39.


text:
    WYNN et al. v. BYRNE, COUNTY PROSECUTOR.
    No. 977.
    Decided March 4, 1968.

      Robert L. Carter, Martin Garbus and Morton Stavis for appellants.

      Thomas P. Ford, Jr., for appellee.
   Per Curiam.

The judgment of the United States District Court for the District of New Jersey is vacated and the cause is remanded to that court for further proceedings. Moody v. Flowers, 387 U. S. 97, at 104.

Mr. Justice Black would .affirm the judgment.