Acquisition Activity of Webb‐Pomerene Member Firms, 1951–1968:

Abstract

STOCKING AND WATKINS, in their book Cartels or Competition? state that one of the greatest risks the United States incurs from the Webb-Pomerene Law is the spread of monopolistic practices from export trade to the domestic economy (1). While not all acquisitions by firms constitute monopolistic practices, it is plausible that most merger activity has some anticompetitive effects. A recent report by the Federal Trade Commission covering the activities of Webb-Pomerene Associations in the 1958 to 1962 period (2) and an earlier (1962) study of acquisitions of the 500 largest industrial firms in 1961-by name of firm (3)-presents some evidence for testing the acquisition patterns of firms participating in export trade by means of Webb-Pomerene Association membership. The Webb-Pomerene Associations recently have also been the subject of both a Senate subcommittee Hearing (4) and of a doctoral dissertation (5). The interests of the Senate subcommittee centered around a general review of the Webb-Pomerene Law and the academic study encompassed a questionnaire survey of the 316 firms which were members of the 50 Webb-Pomerene Associations in the period 1962-1965 (6). In addition to the 1951-1961 period covered in the early part of this paper, acquisition data for a more recent 7 year period, 1962-1968, are available (7). These data which include only large acquisitions-those of $10 million or more of assets for most years-are noted where appropriate and, particularly, in the later part of this paper (8).