U.S. Supreme Court Brown Shoe Co., Inc. v. United States, 370
U.S. 294 (1962) Brown Shoe Co., Inc. v. United
States No. 4 Argued December 6,
1961 Decided June 25, 1962 370
U.S. 294 APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT OF
MISSOURI Syllabus The Government brought suit to enjoin consummation of a merger
of two corporations on the ground that its effect might be
substantially to lessen competition or to tend to create a monopoly
in the production, distribution and sale of shoes, in violation of
§ 7 of the Clayton Act, as amended in 1950. The District Court
found that the merger would increase concentration in the shoe
industry, both in manufacturing and retailing, eliminate one of the
corporations as a substantial competitor in the retail field, and
establish a manufacturer-retailer relationship which would deprive
all but the top firms in the industry of a fair opportunity to
compete, and that, therefore, it probably would result in a further
substantial lessening of competition and an increased tendency
toward monopoly. It enjoined appellant from having or acquiring any
further interest in the business, stock, or assets of the other
corporation, required full divestiture by appellant of the other
corporation's stock and assets, and ordered appellant to propose in
the immediate future a plan for carrying into effect the Court's
order of divestiture. Held: The judgment is affirmed. Pp. 370 U. S.
296 -346.

															1. The District Court's judgment was a "final" judgment within
the meaning of § 2 of the Expediting Act, and this Court has
jurisdiction of this direct appeal under that Act. Pp. 370 U. S.
304 -311.

															2. The legislative history of the 1950 amendments to § 7 of the
Clayton Act indicates that Congress provided no definite
quantitative or qualitative tests by which enforcement agencies
were to gauge the effects of a given merger, but rather that
Congress intended that a variety of economic and other factors be
considered in determining whether the merger was consistent with
maintaining competition in the industry in which the merging
companies operated. Pp. 370 U. S.
311 -323.

															3. The record supports the District Court's findings and its
conclusion that the shoe industry is being subjected to a
cumulative series of vertical mergers which, if left unchecked, may
substantially lessen competition within the meaning of § 7, as
amended. Pp. 370 U. S.
323 -334. Page 370 U. S. 295 (a) The record in this case supports the District Court's
finding that the relevant lines of commerce are men's, women's, and
children's shoes. Pp. 370 U. S.
325 -326.

															(b) The District Court properly found that the predominantly
medium-priced shoes which appellant manufactures do not occupy a
product market different from the predominantly low-priced shoes
which the other corporation sells. P. 370 U. S.
326 .

															(c) In defining the product market, the District Court was not
required to employ finer "price/quality" or "age/sex" distinctions
than those recognized by its classifications of "men's," "women's,"
and "children's" shoes. Pp. 370 U. S.
326 -328.

															(d) Insofar as the vertical aspect of this merger is concerned,
the relevant geographic market is the entire Nation, and the
anticompetitive effects of the merger are to be measured within
that range of distribution. P. 370 U. S.
328 .

															(e) The trend toward vertical integration in the shoe industry,
when combined with appellant's avowed policy of forcing its own
shoes upon its retail subsidiaries, seems likely to foreclose
competition from a substantial share of the markets for men's,
women's, and children's shoes, without producing any countervailing
competitive, economic, or social advantages. Pp. 370 U. S.
328 -334.

															4. The District Court was correct in concluding that this merger
may tend to lessen competition substantially in the retail sale of
men's, women's, and children's shoes in the overwhelming majority
of the cities and their environs in which both corporations sell
through owned or controlled outlets. Pp. 370 U. S.
334 -346.

															(a) The District Court correctly defined men's, women's, and
children's shoes as the relevant lines of commerce in which to
analyze the horizontal aspects of the merger. P. 370 U. S.
336 .

															(b) The District Court properly defined the relevant geographic
markets in which to analyze the horizontal aspects of this merger
as those cities with populations exceeding 10,000 and their
environs in which both corporations retailed shoes through their
own or controlled outlets. Pp. 370 U. S.
336 -339.

															(c) The evidence is adequate to support the finding of the
District Court that, as a result of the merger, competition in the
retailing of men's, women's, and children's shoes may be lessened
substantially in those cities. Pp. 370 U. S.
339 -346. 179 F.
Supp. 721 , affirmed. Page 370 U. S. 296 MR. CHIEF JUSTICE WARREN delivered the opinion of the Court. I This suit was initiated in November, 1955, when the Government
filed a civil action in the United States District Court for the
Eastern District of Missouri alleging that a contemplated merger
between the G. R. Kinney Company, Inc. (Kinney) and the Brown Shoe
Company, Inc. (Brown), through an exchange of Kinney for Brown
stock, would violate § 7 of the Clayton Act, 15 U.S.C. § 18. The
Act, as amended, provides in pertinent part:

															"No corporation engaged in commerce shall acquire, directly or
indirectly, the whole or any part of the stock or other share
capital . . . of another corporation engaged also in commerce,
where in any line of commerce in any section of the country, the
effect of such acquisition may be substantially to lessen
competition, or to tend to create a monopoly."

															The complaint sought injunctive relief under § 15 of the Clayton
Act, 15 U.S.C. § 25, to restrain consummation of the merger.

															A motion by the Government for a preliminary injunction pendente lite was denied, and the companies were permitted
to merge provided, however, that their businesses be operated
separately and that their assets be kept separately identifiable.
The merger was then effected on May 1, 1956. Page 370 U. S. 297 In the District Court, the Government contended that the effect
of the merger of Brown the third largest seller of shoes by dollar
volume in the United States, a leading manufacturer of men's,
women's, and children's shoes, and a retailer with over 1,230
owned, operated or controlled retail outlets, [ Footnote 1 ] and Kinney, the eighth largest
company, by dollar volume, among those primarily engaged in selling
shoes, itself a large manufacturer of shoes and a retailer with
over 350 retail outlets, "may be substantially to lessen
competition or to tend to create a monopoly" by eliminating actual
or potential competition in the production of shoes for the
national wholesale shoe market and in the sale of shoes at retail
in the Nation by foreclosing competition from "a market represented
by Kinney's retail outlets whose annual sales exceed $42,000,000,"
and by enhancing Brown's competitive advantage over other
producers, distributors and sellers of shoes. The Government argued
that the "line of commerce" affected by this merger is "footwear,"
or alternatively, that the "line[s]" are "men's," "women's," and
"children's" shoes, separately considered, and that the "section of
the country," within which the anticompetitive effect of the merger
is to be judged is the Nation as a whole, or, alternatively, each
separate city or city and its Page 370 U. S. 298 immediate surrounding area in which the parties sell shoes at
retail.

															In the District Court, Brown contended that the merger would be
shown not to endanger competition if the "line[s] of commerce" and
the "section[s] of the country" were properly determined. Brown
urged that not only were the age and sex of the intended customers
to be considered in determining the relevant line of commerce, but
that differences in grade of material, quality of workmanship,
price, and customer use of shoes resulted in establishing different
lines of commerce. While agreeing with the Government that, with
regard to manufacturing, the relevant geographic market for
assessing the effect of the merger upon competition is the country
as a whole, Brown contended that, with regard to retailing, the
market must vary with economic reality from the central business
district of a large city to a "standard metropolitan area"
[ Footnote 2 ] for a smaller
community. Brown further contended that, both at the manufacturing
level and at the retail level, the shoe industry enjoyed healthy
competition, and that the vigor of this competition would not, in
any event, be diminished by the proposed merger, because Kinney
manufactured less than 0.5% and retailed less than 2% of the
Nation's shoes.

															The District Court rejected the broadest contentions of both
parties. The District Court found that

															"there is one group of classifications which is understood and
recognized Page 370 U. S. 299 by the entire industry and the public the classification into
'men's,' 'women's' and 'children's' shoes separately and
independently."

															On the other hand, "[t]o classify shoes as a whole could be
unfair and unjust; to classify them further would be impractical,
unwarranted and unrealistic."

															Realizing that "the areas of effective competition for retailing
purposes cannot be fixed with mathematical precision," the District
Court found that,

															"when determined by economic reality, for retailing, a 'section
of the country' is a city of 10,000 or more population and its
immediate and contiguous surrounding area, regardless of name
designation, and in which a Kinney store and a Brown (operated,
franchise, or plan) [ Footnote
3 ] store are located."

															The District Court rejected the Government's contention that the
combining of the manufacturing facilities of Brown and Kinney would
substantially lessen competition in the production of men's,
women's, or children's shoes for the national wholesale market.
However, the District Court did find that the likely foreclosure of
other manufacturers from the market represented by Kinney's retail
outlets may substantially lessen competition in the manufacturers'
distribution of "men's," "women's," and "children's" shoes,
considered separately, throughout the Nation. The District Court
also found that the merger may substantially lessen competition in
retailing alone in "men's," "women's," and "children's" shoes,
considered separately, in every city of 10,000 or more population
and its immediate surrounding area in which both a Kinney and a
Brown store are located.

															Brown's contentions here differ only slightly from those made
before the District Court. In order fully to understand and
appraise these assertions, it is necessary to set Page 370 U. S. 300 out in some detail the District Court's findings concerning the
nature of the shoe industry and the place of Brown and Kinney
within that industry. The Industry The District Court found that, although domestic shoe production
was scattered among a large number of manufacturers, a small number
of large companies occupied a commanding position. Thus, while the
24 largest manufacturers produced about 35% of the Nation's shoes,
the top 4 -- International, Endicott-Johnson, Brown (including
Kinney) and General Shoe -- alone produced approximately 23% of the
Nation's shoes, or 65% of the production of the top 24.

															In 1955, domestic production of nonrubber shoes was 509.2
million pairs, of which about 103.6 million pairs were men's shoes,
about 271 million pairs were women's shoes, and about 134.6 million
pairs were children's shoes. [ Footnote 4 ] The District Court found that men's, women's,
and children's shoes are normally produced in separate
factories.

															The public buys these shoes through about 70,000 retail outlets,
only 22,000 of which, however, derive 50% or more of their gross
receipts from the sale of shoes and are classified as "shoe stores"
by the Census Bureau. [ Footnote
5 ] These Page 370 U. S. 301 22,000 shoe stores were found generally to sell (1) men's shoes
only, (2) women's shoes only, (3) women's and children's shoes, or
(4) men's, women's, and children's shoes.

															The District Court found a "definite trend" among shoe
manufacturers to acquire retail outlets. For example, International
Shoe Company had no retail outlets in 1945, but, by 1956, had
acquired 130; General Shoe Company had only 80 retail outlets in
1945, but had 526 by 1956; Shoe Corporation of America, in the same
period, increased its retail holdings from 301 to 842; Melville
Shoe Company, from 536 to 947; and Endicott-Johnson, from 488 to
540. Brown, itself, with no retail outlets of its own prior to
1951, had acquired 845 such outlets by 1956. Moreover, between 1950
and 1956, nine independent shoe store chains, operating 1,114
retail shoe stores, were found to have become subsidiaries of these
large firms and to have ceased their independent operations.

															And once the manufacturers acquired retail outlets, the District
Court found there was a "definite trend" for the parent
manufacturers to supply an ever increasing percentage of the retail
outlets' needs, thereby foreclosing other manufacturers from
effectively competing for the retail accounts.
Manufacturer-dominated stores were found to be "drying up" the
available outlets for independent producers.

															Another "definite trend" found to exist in the shoe industry was
a decrease in the number of plants manufacturing shoes. And there
appears to have been a concomitant decrease in the number of firms
manufacturing shoes. In 1947, there were 1,077 independent
manufacturers of shoes, but, by 1954, their number had decreased
about 10% to 970. [ Footnote
6 ] Page 370 U. S. 302 Brown Shoe Brown Shoe was found not only to have been a participant, but
also a moving factor, in these industry trends. Although Brown had
experimented several times with operating its own retail outlets,
by 1945, it had disposed of them all. However, in 1951, Brown again
began to seek retail outlets by acquiring the Nation's largest
operator of leased shoe departments, Wohl Shoe Company (Wohl),
which operated 250 shoe departments in department stores throughout
the United States. Between 1952 and 1955, Brown made a number of
smaller acquisitions: Wetherby-Kayser Shoe Company (three retail
stores), Barnes & Company (two stores), Reilly Shoe Company
(two leased shoe departments), Richardson Shoe Store (one store),
and Wohl Shoe Company of Dallas (not connected with Wohl) (leased
shoe departments in Dallas). In 1954, Brown made another major
acquisition: Regal Shoe Corporation which, at the time, operated
one manufacturing plant producing men's shoes and 110 retail
outlets.

															The acquisition of these corporations was found to lead to
increased sales by Brown to the acquired companies. Thus, although,
prior to Brown's acquisition of Wohl in 1951, Wohl bought from
Brown only 12.8% of its total purchases of shoes, it subsequently
increased its purchases to 21.4% in 1952 and to 32.6% in 1955.
Wetherby-Kayser's purchases from Brown increased from 10.4% before
acquisition to over 50% after. Regal, which had previously sold no
shoes to Wohl and shoes worth only $89,000 to Brown, in 1956 sold
shoes worth $265,000 to Wohl and $744,000 to Brown.

															During the same period of time, Brown also acquired the stock or
assets of seven companies engaged solely in shoe manufacturing. As
a result, in 1955, Brown was the Page 370 U. S. 303 fourth largest shoe manufacturer in the country, producing about
25.6 million pairs of shoes, or about 4% of the Nation's total
footwear production. Kinney Kinney is principally engaged in operating the largest
family-style shoe store chain in the United States. At the time of
trial, Kinney was found to be operating over 400 such stores in
more than 270 cities. These stores were found to make about 1.2% of
all national retail shoe sales by dollar volume. Moreover, in 1955,
the Kinney stores sold approximately 8 million pairs of nonrubber
shoes, or about 1.6% of the national pairage sales of such shoes.
Of these sales, approximately 1.1 million pairs were of men's
shoes, or about 1% of the national pairage sales of men's shoes;
approximately 4.2 million pairs were of women's shoes, or about
1.5% of the national pairage sales of women's shoes; and
approximately 2.7 million pairs were of children's shoes, or about
2% of the national pairage sales of children's shoes. [ Footnote 7 ]

															In addition to this extensive retail activity, Kinney owned and
operated four plants which manufactured men's, women's, and
children's shoes and whose combined output was 0.5% of the national
shoe production in 1955, making Kinney the twelfth largest shoe
manufacturer in the United States.

															Kinney stores were found to obtain about 20% of their shoes from
Kinney's own manufacturing plants. At the time of the merger,
Kinney bought no shoes from Brown; Page 370 U. S. 304 however, in line with Brown's conceded reasons [ Footnote 8 ] for acquiring Kinney, Brown had,
by 1957, become the largest outside supplier of Kinney's shoes,
supplying 7.9% of all Kinney's needs.

															It is in this setting that the merger was considered and held to
violate § 7 of the Clayton Act. The District Court ordered Brown to
divest itself completely of all stock, share capital, assets or
other interests it held in Kinney, to operate Kinney to the
greatest degree possible as an independent concern pending complete
divestiture, to refrain thereafter from acquiring or having any
interest in Kinney's business or assets, and to file with the court
within 90 days a plan for carrying into effect the divestiture
decreed. The District Court also stated it would retain
jurisdiction over the cause to enable the parties to apply for such
further relief as might be necessary to enforce and apply the
judgment. Prior to its submission of a divestiture plan, Brown
filed a notice of appeal in the District Court. It then filed a
jurisdictional statement in this Court, seeking review of the
judgment below as entered. II JURISDICTION Appellant's jurisdictional statement cites as the basis of our
jurisdiction over this appeal § 2 of the Expediting Page 370 U. S. 305 Act of February 11, 1903, 32 Stat. 823, as amended, 15 U.S.C. §
29. In a civil antitrust action in which the United States is the
complainant that Act provides for a direct appeal to this Court
from "the final judgment of the district court." (Emphasis
supplied.) [ Footnote 9 ] The
Government does not contest appellant's claim of jurisdiction; on
the contrary, it moved to have the judgment below summarily
affirmed, conceding our present jurisdiction to review the merits
of that judgment. We deferred ruling on the Government's motion for
summary affirmance and noted probable jurisdiction over the appeal.
363 U.S. 825. [ Footnote
10 ]

															It was suggested from the bench during the oral argument that,
since the judgment of the District Court does not include a
specific plan for the dissolution of the Brown-Kinney merger, but
reserves such a ruling pending the filing of suggested plans for
implementing divestiture, the judgment below is not "final" as
contemplated by the Expediting Act. In response to that suggestion,
both parties have filed briefs contending that we do have
jurisdiction to dispose of the case on the merits in its present
posture. However, the mere consent of the parties to the Court's
consideration and decision of the case cannot, by itself, confer
jurisdiction on the Court. See American Fire & Casualty Co.
v. Finn, 341 U. S. 6 , 341 U. S. 17 -18; People's Bank of Belville v. Calhoun, 102 U.
S. 256 , 102 U. S.
260 -261; Capron v. Van
Noorden , 2 Cranch 126, 6
U. S. 127 . Therefore, a review of the sources of the
Court's jurisdiction is a threshold Page 370 U. S. 306 inquiry appropriate to the disposition of every case that comes
before us. Revised Rules of the Supreme Court, 15(1)(b), 23(1)(b); Kesler v. Department of Public Safety, 369 U.
S. 153 ; Collins v. Miller, 252 U.
S. 364 ; United States v.
More , 3 Cranch 159.

															The requirement that a final judgment shall have been entered in
a case by a lower court before a right of appeal attaches has an
ancient history in federal practice, first appearing in the
Judiciary Act of 1789. [ Footnote
11 ] With occasional modifications, the requirement has remained
a cornerstone of the structure of appeals in the federal courts.
[ Footnote 12 ] The Court has
adopted essentially practical tests for identifying those judgments
which are, and those which are not, to be considered "final." See, e.g., Cobbledick v. United States, 309 U.
S. 323 , 309 U. S. 326 ; Market Street R. Co. v. Railroad Comm'n, 324 U.
S. 548 , 324 U. S. 552 ; Republic Natural Gas Co. v. Oklahoma, 334 U. S.
62 , 334 U. S. 69 ; Cohen v. Beneficial Industrial Loan Corp., 337 U.
S. 541 , 337 U. S. 546 ; DiBella v. United States, 369 U.
S. 121 , 369 U. S. 124 , 369 U. S. 129 ; cf. Federal Trade Comm'n v. Minneapolis-Honeywell Regulator
Co., 344 U. S. 206 , 344 U. S. 212 ; United States v. F. & M. Schaefer Brewing Co., 356 U. S. 227 , 356 U. S. 232 .
A pragmatic approach to the question of finality has been
considered essential to the achievement of the "just, speedy, and
inexpensive determination of every action": [ Footnote 13 ] the touchstones of federal
procedure.

															In most cases in which the Expediting Act has been cited as the
basis of this Court's jurisdiction, the issue of "finality" has not
been raised or discussed by the parties or the Court. On but few
occasions have particular Page 370 U. S. 307 orders in suits to which that Act is applicable been considered
in the light of claims that they were insufficiently "final" so as
to preclude appeal to this Court. Compare Schine Chain Theatres
v. United States, 329 U.S. 686, with Schine Chain Theatres
v. United States, 334 U. S. 110 . The
question has generally been passed over without comment in
adjudications on the merits. While we are not bound by previous
exercises of jurisdiction in cases in which our power to act was
not questioned but was passed sub silentio, United States v.
Tucker Truck Lines, Inc., 344 U. S. 33 , 344 U. S. 38 ; United States ex rel. Arant v. Lane, 245 U.
S. 166 , 245 U. S. 170 ,
neither should we disregard the implications of an exercise of
judicial authority assumed to be proper for over 40 years.
[ Footnote 14 ] Cf. 336 U. S. Mo Page 370 U. S. 308 Hock Ke Lok Po, 336 U. S. 368 , 336 U. S.
379 -380; Radio Station WOW v. Johnson, 326 U. S. 120 , 326 U. S.
125 -126.

															We think the decree of the District Court in this case had
sufficient indicia of finality for us to hold that the judgment is
properly appealable at this time. We note, first, that the District
Court disposed on the entire complaint filed by the Government.
Every prayer for relief was passed upon. Full divestiture by Brown
of Kinney's stock and assets was expressly required. Appellant was
permanently enjoined from acquiring or having any further interest
in the business, stock or assets of the other defendant in the
suit. The single provision of the judgment by which its finality
may be questioned is the one requiring appellant to propose in the
immediate future a plan for carrying into effect the court's order
of divestiture. However, when we reach the merits of, and affirm,
the judgment below, the sole remaining task for the District Court
will be its acceptance of a plan for full divestiture, and the
supervision of the plan so accepted. Further rulings of the
District Court in administering its decree, facilitated by the fact
that the defendants below have been required to maintain separate
books pendente lite, are sufficiently independent of, and
subordinate to, the issues presented by this appeal to make the
case in its present posture a proper one for review now. [ Footnote 15 ] Appellant here does not
attack the full divestiture ordered by the District Court as such;
it is appellant's contention that, Page 370 U. S. 309 under the facts of the case, as alleged and proved by the
Government, no order of divestiture could have been proper. The
propriety of divestiture was considered below and is disputed here
on an "all or nothing" basis. It is ripe for review now, and will,
thereafter, be foreclosed. Repetitive judicial consideration of the
same question in a single suit will not occur here. Cf. Radio
Station WOW v. Johnson, supra, at 326 U. S. 127 ; Catlin v. United States, 324 U. S. 229 , 324 U. S.
233 -234; Cobbledick v. United States, supra, 309 U.S. at 309 U. S. 325 , 309 U. S.
330 .

															A second consideration supporting our view is the character of
the decree still to be entered in this suit. It will be an order of
full divestiture. Such an order requires careful, and often
extended, negotiation and formulation. This process does not take
place in a vacuum, but, rather, in a changing market place, in
which buyers and bankers must be found to accomplish the order of
forced sale. The unsettling influence of uncertainty as to the
affirmance of the initial, underlying decision compelling
divestiture would only make still more difficult the task of
assuring expeditious enforcement of the antitrust laws. The delay
in withholding review of any of the issues in the case until the
details of a divestiture had been approved by the District Court
and reviewed here could well mean a change in market conditions
sufficiently pronounced to render impractical or otherwise
unenforceable the very plan of asset disposition for which the
litigation was held. The public interest, as well as that of the
parties, would lose by such procedure.

															Lastly, holding the decree of the District Court in the instant
case less than "final" and, thus, not appealable, would require a
departure from a settled course of the Court's practice. It has
consistently reviewed antitrust decrees contemplating either future
divestiture or other comparable remedial action prior to the
formulation and Page 370 U. S. 310 entry of the precise details of the relief ordered. No instance
has been found in which the Court has reviewed a case following a
divestiture decree such as the one we are asked to consider here,
in which the party subject to that decree has later brought the
case back to this Court with claims of error in the details of the
divestiture finally approved. [ Footnote 16 ] And only two years ago, we were unanimous in
accepting jurisdiction, and in affirming the judgment of a District
Court similar to the one entered here, in the only case under
amended § 7 of the Clayton Act brought before us at a juncture
comparable to the instant litigation. See Maryland &
Virginia Milk Producers Ass'n v. United States, 362 U.
S. 458 , 362 U. S.
472 -473. [ Footnote
17 ] A fear of piecemeal appeals because of our adherence to
existing procedure can find no support in history. Thus, the
substantial body Page 370 U. S. 311 of precedent for accepting jurisdiction over this case in its
present posture supports the practical considerations previously
discussed. We believe a contrary result would be inconsistent with
the very purposes for which the Expediting Act was passed and that
gave it its name. III LEGISLATIVE HISTORY This case is one of the first to come before us in which the
Government's complaint is based upon allegations that the appellant
has violated § 7 of the Clayton Act, as that section was amended in
1950. [ Footnote 18 ] The
amendments adopted in 1950 culminated extensive efforts over a
number of years, on the parts of both the Federal Trade Commission
and some members of Congress, to secure revision of a section of
the antitrust laws considered by many observers to be ineffective
in its then existing form. Sixteen bills to amend § 7 during the
period 1943 to 1949 Page 370 U. S. 312 alone were introduced for consideration by the Congress, and
full public hearings on proposed amendments were held in three
separate sessions. [ Footnote
19 ] In the light of this extensive legislative attention to the
measure, and the broad, general language finally selected by
Congress for the expression of its will, we think it appropriate to
review the history of the amended Act in determining whether the
judgment of the court below was consistent with the intent of the
legislature. See United States v. E.I. du Pont de Nemours &
Co., 353 U. S. 586 , 353 U. S.
591 -592; Schwegmann Bros. v. Calvert Distillers
Corp., 341 U. S. 384 , 341 U. S.
390 -395; Federal Trade Comm'n v. Morton Salt
Co., 334 U. S. 37 , 334 U. S. 43 -46, 334 U. S. 49 ; Corn Products Refining Co. v. Federal Trade Comm'n, 324 U. S. 726 , 324 U. S.
734 -737.

															As enacted in 1914, § 7 of the original Clayton Act prohibited
the acquisition by one corporation of the stock of another
corporation when such acquisition would result in a substantial
lessening of competition between the acquiring and the acquired
companies, or tend to Page 370 U. S. 313 create a monopoly in any line of commerce. The Act did not, by
its explicit terms, or as construed by this Court, bar the
acquisition by one corporation of the assets of another. [ Footnote 20 ] Nor did it appear to
preclude the acquisition of stock in any corporation other than a
direct competitor. [ Footnote
21 ] Although proponents of the 1950 amendments to the Act
suggested that the terminology employed in these provisions was the
result of accident or an unawareness that the acquisition of assets
could be as inimical to competition as stock acquisition, a review
of the legislative history of the original Clayton Act fails to
support such views. [ Footnote
22 ] The possibility of asset acquisition was discussed,
[ Footnote 23 ] but was not
considered important Page 370 U. S. 314 to an Act then conceived to be directed primarily at the
development of holding companies and at the secret acquisition of
competitors through the purchase of all or parts of such
competitors' stock. [ Footnote
24 ]

															It was, however, not long before the Federal Trade Commission
recognized deficiencies in the Act as first enacted. Its Annual
Reports frequently suggested amendments, principally along two
lines: first, to "plug the loophole" exempting asset acquisitions
from coverage under the Act, and second, to require companies
proposing a merger to give the Commission prior notification of
their plans. [ Footnote 25 ]
The Final Report of the Temporary National Economic Committee also
recommended changes focusing on these two proposals. [ Footnote 26 ] Hearings were held on
some bills incorporating either or both of these changes but, prior
to the amendments adopted in 1950, none reached the floor of
Congress of plenary consideration. Although the bill that was
eventually to become amended § 7 was confined to embracing within
the Act's terms the Page 370 U. S. 315 acquisition of assets as well as stock, in the course of the
hearings conducted in both the Eightieth and Eighty-first
Congresses, a more far-reaching examination of the purposes and
provisions of § 7 was undertaken. A review of the legislative
history of these amendments provides no unmistakably clear
indication of the precise standards the Congress wished the Federal
Trade Commission and the courts to apply in judging the legality of
particular mergers. However, sufficient expressions of a consistent
point of view may be found in the hearings, committee reports of
both the House and Senate, and in floor debate to provide those
charged with enforcing the Act with a usable frame of reference
within which to evaluate any given merger.

															The dominant theme pervading congressional consideration of the
1950 amendments was a fear of what was considered to be a rising
tide of economic concentration in the American economy.
Apprehension in this regard was bolstered by the publication in
1948 of the Federal Trade Commission's study on corporate mergers.
Statistics from this and other current studies were cited as
evidence of the danger to the American economy in unchecked
corporate expansions through mergers. [ Footnote 27 ] Other considerations cited in support of
the bill were the desirability Page 370 U. S. 316 of retaining "local control" over industry and the protection of
small businesses. [ Footnote
28 ] Throughout the recorded discussion may be found examples of
Congress' fear not only of accelerated concentration of economic
power on economic grounds, but also of the threat to other values a
trend toward concentration was thought to pose.

															What were some of the factors, relevant to a judgment as to the
validity of a given merger, specifically discussed by Congress in
redrafting § 7?

															First, there is no doubt that Congress did wish to "plug the
loophole" and to include within the coverage of the Act the
acquisition of assets no less than the acquisition of stock.
[ Footnote 29 ] Page 370 U. S. 317 Second, by the deletion of the "acquiring-acquired" language in
the original text, [ Footnote
30 ] it hoped to make plain that § 7 applied not only to mergers
between actual competitors, but also to vertical and conglomerate
mergers whose effect may tend to lessen competition in any line of
commerce in any section of the country. [ Footnote 31 ]

															Third, it is apparent that a keystone in the erection of a
barrier to what Congress saw was the rising tide of economic
concentration, was its provision of authority for arresting mergers
at a time when the trend to a lessening of competition in a line of
commerce was still in its incipiency. Congress saw the process of
concentration in American business as a dynamic force; it sought to
assure the Federal Trade Commission and the courts the power Page 370 U. S. 318 to brake this force at its outset and before it gathered
momentum. [ Footnote 32 ]

															Fourth, and closely related to the third, Congress rejected, as
inappropriate to the problem it sought to remedy, the application
to § 7 cases of the standards for judging the legality of business
combinations adopted by the courts in dealing with cases arising
under the Sherman Act, and which may have been applied to some
early cases arising under original § 7. [ Footnote 33 ] Page 370 U. S. 319 Fifth, at the same time that it sought to create an effective
tool for preventing all mergers having demonstrable anticompetitive
effects, Congress recognized the stimulation to competition that
might flow from particular mergers. When concern as to the Act's
breadth was expressed, supporters of the amendments indicated that
it would not impede, for example, a merger between two small
companies to enable the combination to compete more effectively
with larger corporations dominating the relevant market, nor a
merger between a corporation which is financially healthy and a
failing one which no longer can be a vital competitive factor in
the market. [ Footnote
34 ] Page 370 U. S. 320 The deletion of the word "community" in the original Act's
description of the relevant geographic market is another
illustration of Congress' desire to indicate that its concern was
with the adverse effects of a given merger on competition only in
an economically significant "section" of the country. [ Footnote 35 ] Taken as a whole, the
legislative history illuminates congressional concern with the
protection of competition, not competitors, and its desire to
restrain mergers only to the extent that such combinations may tend
to lessen competition.

															Sixth, Congress neither adopted nor rejected specifically any
particular tests for measuring the relevant markets, either as
defined in terms of product or in terms of geographic locus of
competition, within which the anticompetitive Page 370 U. S. 321 effects of a merger were to be judged. Nor did it adopt a
definition of the word "substantially," whether in quantitative
terms of sales or assets or market shares or in designated
qualitative terms, by which a merger's effects on competition were
to be measured. [ Footnote
36 ]

															Seventh, while providing no definite quantitative or qualitative
tests by which enforcement agencies could gauge the effects of a
given merger to determine whether it may "substantially" lessen
competition or tend toward monopoly, Congress indicated plainly
that a merger had to be functionally viewed, in the context of its
particular Page 370 U. S. 322 industry. [ Footnote 37 ]
That is, whether the consolidation was to take place in an industry
that was fragmented, rather than concentrated, that had seen a
recent trend toward domination by a few leaders or had remained
fairly consistent in its distribution of market shares among the
participating companies, that had experienced easy access to
markets by suppliers and easy access to suppliers by buyers or had
witnessed foreclosure of business, that had witnessed the ready
entry of new competition or the erection of barriers to prospective
entrants, all were aspects, varying in importance with the merger
under consideration, which would properly be taken into account.
[ Footnote 38 ] Page 370 U. S. 323 Eighth, Congress used the words " may be substantially
to lessen competition" (emphasis supplied), to indicate that its
concern was with probabilities, not certainties. [ Footnote 39 ] Statutes existed for dealing
with clear-cut menaces to competition; no statute was sought for
dealing with ephemeral possibilities. Mergers with a probable
anticompetitive effect were to be proscribed by this Act.

															It is against this background that we return to the case before
us. IV THE VERTICAL ASPECTS OF THE MERGER Economic arrangements between companies standing in a
supplier-customer relationship are characterized as "vertical." The
primary vice of a vertical merger or other arrangement tying a
customer to a supplier is that, Page 370 U. S. 324 by foreclosing the competitors of either party from a segment of
the market otherwise open to them, the arrangement may act as a
"clog on competition," Standard Oil Co. of California v. United
States, 337 U. S. 293 , 337 U. S. 314 ,
which "deprive[s] . . . rivals of a fair opportunity to compete."
[ Footnote 40 ] H.R.Rep. No.
1191, 81st Cong., 1st Sess. 8. Every extended vertical arrangement,
by its very nature, for at least a time, denies to competitors of
the supplier the opportunity to compete for part or all of the
trade of the customer-party to the vertical arrangement. However,
the Clayton Act does not render unlawful all such vertical
arrangements, but forbids only those whose effect "may be
substantially to lessen competition, or to tend to create a
monopoly" "in any line of commerce in any section of the country."
Thus, as we have previously noted,

															"[d]etermination of the relevant market is a necessary predicate
to a finding of a violation of the Clayton Act because the
threatened monopoly must be one which will substantially lessen
competition 'within the area of effective competition.'
Substantiality can be determined only in terms of the market
affected. [ Footnote 41 ]"

															The "area of effective competition" must be determined by
reference to a product market (the "line of commerce") and a
geographic market (the "section of the country"). Page 370 U. S. 325 The Product Market The outer boundaries of a product market are determined by the
reasonable interchangeability of use or the cross-elasticity of
demand between the product itself and substitutes for it. [ Footnote 42 ] However, within this
broad market, well defined submarkets may exist which, in
themselves, constitute product markets for antitrust purposes. United States v. E.I. du Pont de Nemours & Co., 353 U. S. 586 , 353 U. S.
593 -595. The boundaries of such a submarket may be
determined by examining such practical indicia as industry or
public recognition of the submarket as a separate economic entity,
the product's peculiar characteristics and uses, unique production
facilities, distinct customers, distinct prices, sensitivity to
price changes, and specialized vendors. [ Footnote 43 ] Because § 7 of the Clayton Act prohibits
any merger which may substantially lessen competition "in any line of commerce" (emphasis supplied), it is necessary
to examine the effects of a merger in each such economically
significant submarket to determine if there is a reasonable
probability that the merger will substantially lessen competition.
If such a probability is found to exist, the merger is proscribed.
[ Footnote 44 ] Page 370 U. S. 326 Applying these considerations to the present case, we conclude
that the record supports the District Court's finding that the
relevant lines of commerce are men's, women's, and children's
shoes. These product lines are recognized by the public; each line
is manufactured in separate plants; each has characteristics
peculiar to itself rendering it generally noncompetitive with the
others; and each is, of course, directed toward a distinct class of
customers.

															Appellant, however, contends that the District Court's
definitions fail to recognize sufficiently "price/quality" and
"age/sex" distinctions in shoes. Brown argues that the
predominantly medium-priced shoes which it manufactures occupy a
product market different from the predominantly low-priced shoes
which Kinney sells. But agreement with that argument would be
equivalent to holding that medium-priced shoes do not compete with
low-priced shoes. We think the District Court properly found the
facts to be otherwise. It would be unrealistic to accept Brown's
contention that, for example, men's shoes selling below $8.99 are
in a different product market from those selling above.$9.00.

															This is not to say, however, that "price/quality" differences,
where they exist, are unimportant in analyzing a merger; they may
be of importance in determining the likely effect of a merger. But
the boundaries of the relevant market must be drawn with sufficient
breadth to include the competing products of each of the merging
companies and to recognize competition where, in fact, competition
exists. Thus, we agree with the District Court that, in this case,
a further division of product lines based on "price/quality"
differences would be "unrealistic." Page 370 U. S. 327 Brown's contention that the District Court's product market
definitions should have recognized further "age/sex" distinctions
raises a different problem. Brown's sharpest criticism is directed
at the District Court's finding that children's shoes constituted a
single line of commerce. Brown argues, for example, that "a little
boy does not wear a little girl's black patent leather pump," and
that "[a] male baby cannot wear a growing boy's shoes." Thus, Brown
argues that "infants' and babies'" shoes, "misses' and children's'"
shoes and "youths' and boys'" shoes should each have been
considered a separate line of commerce. Assuming, arguendo, that
little boys' shoes, for example, do have sufficient peculiar
characteristics to constitute one of the markets to be used in
analyzing the effects of this merger, we do not think that in this
case the District Court was required to employ finer "age/sex"
distinctions then those recognized by its classifications of
"men's," "women's," and "children's" shoes. Further division does
not aid us in analyzing the effects of this merger. Brown
manufactures about the same percentage of the Nation's children's
shoes (5.8%) as it does of the Nation's youths' and boys' shoes
(6.5%), of the Nation's misses' and children's shoes (6.0%) and of
the Nation's infants' and babies' shoes (4.9%). Similarly, Kinney
sells about the same percentage of the Nation's children's shoes
(2%) as it does of the Nation's youths' and boys' shoes (3.1%), of
the Nation's misses' and children's shoes (1.9%), and of the
Nation's infants' and babies' shoes (1.5%). Appellant can point to
no advantage it would enjoy were finer divisions than those chosen
by the District Court employed. Brown manufactures significant,
comparable quantities of virtually every type of nonrubber men's,
women's, and children's shoes, and Kinney sells such quantities of
virtually every type of men's, women's, and children's shoes. Thus,
whether considered separately or together, the picture of this Page 370 U. S. 328 merger is the same. We therefore agree with the District Court's
conclusion that, in the setting of this case, to subdivide the shoe
market further on the basis of "age/sex" distinctions would be
"impractical" and "unwarranted." The Geographic Market We agree with the parties and the District Court that, insofar
as the vertical aspect of this merger is concerned, the relevant
geographic market is the entire Nation. The relationships of
product value, bulk, weight and consumer demand enable
manufacturers to distribute their shoes on a nationwide basis, as
Brown and Kinney, in fact, do. The anticompetitive effects of the
merger are to be measured within this range of distribution. The Probable Effect of the Merger Once the area of effective competition affected by a vertical
arrangement has been defined, an analysis must be made to determine
if the effect of the arrangement "may be substantially to lessen
competition, or to tend to create a monopoly" in this market.

															Since the diminution of the vigor of competition which may stem
from a vertical arrangement results primarily from a foreclosure of
a share of the market otherwise open to competitors, an important
consideration in determining whether the effect of a vertical
arrangement "may be substantially to lessen competition, or to tend
to create a monopoly" is the size of the share of the market
foreclosed. However, this factor will seldom be determinative. If
the share of the market foreclosed is so large that it approaches
monopoly proportions, the Clayton Act will, of course, have been
violated; but the arrangement will also have run afoul of the
Sherman Act. [ Footnote 45 ]
And the legislative history of § 7 indicates clearly that the Page 370 U. S. 329 tests for measuring the legality of any particular economic
arrangement under the Clayton Act are to be less stringent than
those used in applying the Sherman Act. [ Footnote 46 ] On the other hand, foreclosure of a de minimis share of the market will not tend
"substantially to lessen competition."

															Between these extremes, in cases such as the one before us, in
which the foreclosure is neither of monopoly nor de
minimis proportions, the percentage of the market foreclosed
by the vertical arrangement cannot itself be decisive. In such
cases, it becomes necessary to undertake an examination of various
economic and historical factors in order to determine whether the
arrangement under review is of the type Congress sought to
proscribe. [ Footnote 47 ]

															A most important such factor to examine is the very nature and
purpose of the arrangement. [ Footnote 48 ] Congress not only indicated that

															"the tests of illegality [under § 7] are intended to be similar
to those which the courts have applied in interpreting the same
language as used in other sections of the Clayton Act, [ Footnote 49 ]"

															but also chose for § 7 language virtually identical to that of §
3 of the Clayton Act, 15 U.S.C. § 14, which had been interpreted by
this Court to require an examination of the interdependence of the
market share foreclosed by, and the economic purpose of, the
vertical arrangement. Thus, for example, if a particular vertical
arrangement, considered under § 3, appears to be a limited term
exclusive dealing contract, Page 370 U. S. 330 the market foreclosure must generally be significantly greater
than if the arrangement is a tying contract before the arrangement
will be held to have violated the Act. Compare Tampa Electric
Co. v. Nashville Coal Co., 365 U. S. 320 , and Standard Oil Co. of California v. United States, supra,
with International Salt Co. v. United States, 332 U.
S. 392 . [ Footnote
50 ] The reason for this is readily discernible. The usual tying
contract forces the customer to take a product or brand he does not
necessarily want in order to secure one which he does desire.
Because such an arrangement is inherently anticompetitive, we have
held that its use by an established company is likely
"substantially to lessen competition" although only a relatively
small amount of commerce is affected. International Salt Co. v.
United States, supra. Thus, unless the tying device is
employed by a small company in an attempt to break into a market, cf. Harley-Davidson Motor Co., 50 F.T.C. 1047, 1066, the
use of a tying device can rarely [ Footnote 51 ] be harmonized with the strictures of the
antitrust laws, which are intended primarily to preserve and
stimulate competition. See Standard Oil Co. of California v.
United States, supra, 337 U.S. at 337 U. S.
305 -306. On the other hand, requirement contracts are
frequently negotiated at the behest of the customer who has chosen
the particular supplier and his product upon the basis of
competitive merit. See, e.g., Tampa Electric Co. v. Nashville
Coal Co., supra. Of course, the fact that requirement
contracts are not inherently anticompetitive will not save a
particular agreement if, in fact, it is likely "substantially to
lessen competition, or to tend to create a monopoly." E.g.,
Standard Oil Co. of California v. United States, supra. Yet a
requirement contract may escape censure if only a Page 370 U. S. 331 small share of the market is involved, if the purpose of the
agreement is to insure to the customer a sufficient supply of a
commodity vital to the customer's trade or to insure to the
supplier a market for his output and if there is no trend toward
concentration in the industry. Tampa Electric Co. v. Nashville
Coal Co., supra. Similar considerations are pertinent to a
judgment under § 7 of the Act.

															The importance which Congress attached to economic purpose is
further demonstrated by the Senate and House Reports on H.R. 2734,
which evince an intention to preserve the "failing company"
doctrine of International Shoe Co. v. Federal Trade
Comm'n, 280 U. S. 291 .
[ Footnote 52 ] Similarly,
Congress foresaw that the merger of two large companies or a large
and a small company might violate the Clayton Act while the merger
of two small companies might not, although the share of the market
foreclosed be identical, if the purpose of the small companies is
to enable them in combination to compete with larger corporations
dominating the market. [ Footnote
53 ]

															The present merger involved neither small companies nor failing
companies. In 1955, the date of this merger, Brown was the fourth
largest manufacturer in the shoe industry, with sales of
approximately 26 million pairs of shoes and assets of over
$72,000,000 while Kinney had sales of about 8 million pairs of
shoes and assets of about $18,000,000. Not only was Brown one of
the leading manufacturers of men's, women's, and children's shoes,
but Kinney, with over 350 retail outlets, owned and operated the
largest independent chain of family shoe stores in the Nation.
Thus, in this industry, no merger between Page 370 U. S. 332 a manufacturer and an independent retailer could involve a
larger potential market foreclosure. Moreover, it is apparent both
from past behavior of Brown and from the testimony of Brown's
President [ Footnote 54 ] that
Brown would use its ownership of Kinney to force Brown shoes into
Kinney stores. Thus, in operation, this vertical arrangement would
be quite analogous to one involving a tying clause. [ Footnote 55 ]

															Another important factor to consider is the trend toward
concentration in the industry. [ Footnote 56 ] It is true, of course, that the statute
prohibits a given merger only if the effect of that merger may be
substantially to lessen competition. [ Footnote 57 ] But the very wording of § 7 requires a
prognosis of the probable future effect of the merger.
[ Footnote 58 ]

															The existence of a trend toward vertical integration, which the
District Court found, is well substantiated by the record.
Moreover, the court found a tendency of the acquiring manufacturers
to become increasingly important sources of supply for their
acquired outlets. The necessary corollary of these trends is the
foreclosure of independent manufacturers from markets otherwise
open to them. And because these trends are not the product of
accident, but are rather the result of deliberate policies of Brown
and other leading shoe manufacturers, account must be taken of
these facts in order to predict the probable Page 370 U. S. 333 future consequences of this merger. It is against this
background of continuing concentration that the present merger must
be viewed.

															Brown argues, however, that the shoe industry is at present
composed of a large number of manufacturers and retailers, and that
the industry is dynamically competitive. But remaining vigor cannot
immunize a merger if the trend in that industry is toward
oligopoly. See Pillsbury Mills, Inc., 50 F.T.C. 555, 573.
It is the probable effect of the merger upon the future, as well as
the present, which the Clayton Act commands the courts and the
Commission to examine. [ Footnote
59 ]

															Moreover, as we have remarked above, not only must we consider
the probable effects of the merger upon the economics of the
particular markets affected, but also we must consider its probable
effects upon the economic way of life sought to be preserved by
Congress. [ Footnote 60 ]
Congress was desirous of preventing the formation of further
oligopolies with their attendant adverse effects upon local control
of industry and upon small business. Where an industry was composed
of numerous independent units, Congress appeared anxious to
preserve this structure. The Senate Report, quoting with approval
from the Federal Trade Commission's 1948 report on the merger
movement, states explicitly that amended § 7 is addressed, inter alia, to the following problem:

															"Under the Sherman Act, an acquisition is unlawful if it creates
a monopoly or constitutes an attempt to monopolize. Imminent
monopoly may appear when one large concern acquires another, but it
is unlikely to be perceived in a small acquisition by a large
enterprise. As a large concern grows through a series of such small
acquisitions, its accretions of Page 370 U. S. 334 power are individually so minute as to make it difficult to use
the Sherman Act tests against them. . . ."

															"Where several large enterprises are extending their power by
successive small acquisitions, the cumulative effect of their
purchases may be to convert an industry from one of intense
competition among many enterprises to one in which three or four
large concerns produce the entire supply."

															S.Rep. No. 1775, 81st Cong., 2d Sess. 5, U.S.Code Cong. and
Adm.News 1950, p. 4297. [ Footnote 61 ] And see H.R.Rep. No. 1191, 81st
Cong., 1st Sess. 8.

															The District Court's findings, and the record facts, many of
them set forth in Part I of this opinion, convince us that the shoe
industry is being subjected to just such a cumulative series of
vertical mergers which, if left unchecked, will be likely
"substantially to lessen competition."

															We reach this conclusion because the trend toward vertical
integration in the shoe industry, when combined with Brown's avowed
policy of forcing its own shoes upon its retail subsidiaries, may
foreclose competition from a substantial share of the markets for
men's, women's, and children's shoes, without producing any
countervailing competitive, economic, or social advantages. V THE HORIZONTAL ASPECTS OF THE MERGER An economic arrangement between companies performing similar
functions in the production or sale of comparable goods or services
is characterized as "horizontal." The effect on competition of such
an arrangement depends, of course, upon its character and scope.
Thus, its validity in the face of the antitrust laws will depend
upon such factors as: the relative size and number of the Page 370 U. S. 335 parties to the arrangement; whether it allocates shares of the
market among the parties; whether it fixes prices at which the
parties will sell their product; or whether it absorbs or insulates
competitors. [ Footnote 62 ]
Where the arrangement effects a horizontal merger between companies
occupying the same product and geographic market, whatever
competition previously may have existed in that market between the
parties to the merger is eliminated. Section 7 of the Clayton Act,
prior to its amendment, focused upon this aspect of horizontal
combinations by proscribing acquisitions which might result in a
lessening of competition between the acquiring and the acquired
companies. [ Footnote 63 ] The
1950 amendments made plain Congress' intent that the validity of
such combinations was to be gauged on a broader scale: their effect
on competition generally in an economically significant market.

															Thus, again, the proper definition of the market is a "necessary
predicate" to an examination of the competition that may be
affected by the horizontal aspects of the merger. The acquisition
of Kinney by Brown resulted in a horizontal combination at both the
manufacturing and retailing levels of their businesses. Although
the District Court found that the merger of Brown's and Kinney's
manufacturing facilities was economically too insignificant to come
within the prohibitions of the Clayton Act, the Government has not
appealed from this portion of the lower court's decision.
Therefore, we have no occasion to express our views with respect to
that finding. On the other hand, appellant does contest the
District Court's finding that the merger of the companies' retail
outlets may tend substantially to lessen competition. Page 370 U. S. 336 The Product Market Shoes are sold in the United States in retail shoe stores and in
shoe departments of general stores. These outlets sell: (1) men's
shoes, (2) women's shoes, (3) women's or children's shoes, or (4)
men's, women's or children's shoes. Prior to the merger, both Brown
and Kinney sold their shoes in competition with one another through
the enumerated kinds of outlets characteristic of the industry.

															In Part IV of this opinion we hold that the District Court
correctly defined men's, women's, and children's shoes as the
relevant lines of commerce in which to analyze the vertical aspects
of the merger. For the reasons there stated, we also hold that the
same lines of commerce are appropriate for considering the
horizontal aspects of the merger. The Geographic Market The criteria to be used in determining the appropriate
geographic market are essentially similar to those used to
determine the relevant product market. See S.Rep. No.1775,
81st Cong., 2d Sess. 5-6; United States v. E.I. du Pont de
Nemours & Co., 353 U. S. 586 , 353 U. S. 593 .
Moreover, just as a product submarket may have § 7 significance as
the proper "line of commerce," so may a geographic submarket be
considered the appropriate "section of the country." Erie Sand
& Gravel Co. v. Federal Trade Comm'n, 291 F.2d 279, 283
(C.A.3d Cir.); United States v. Bethlehem Steel
Corp., 168 F.
Supp. 576 , 595-603 (D.C.S.D.N.Y.). Congress prescribed a
pragmatic, factual approach to the definition of the relevant
market, and not a formal, legalistic one. The geographic market
selected must, therefore, both "correspond to the commercial
realities" [ Footnote 64 ] of
the industry and be economically Page 370 U. S. 337 significant. Thus, although the geographic market in some
instances may encompass the entire Nation, under other
circumstances, it may be as small as a single metropolitan area. United States v. Columbia Pictures Corp., 189 F.
Supp. 153 , 193-194 (D.C.S.D.N.Y.); United States v.
Maryland & Virginia Milk Producers Ass'n, 167 F.
Supp. 799 (D.C.D.C.), aff'd, 362 U. S. 362 U.S.
458. The fact that two merging firms have competed directly on the
horizontal level in but a fraction of the geographic markets in
which either has operated, does not, in itself, place their merger
outside the scope of § 7. That section speaks of "any . . . section
of the country," and if anticompetitive effects of a merger are
probable in "any" significant market, the merger at least to that
extent is proscribed. [ Footnote
65 ]

															The parties do not dispute the findings of the District Court
that the Nation as a whole is the relevant geographic market for
measuring the anticompetitive effects of the merger viewed
vertically or of the horizontal merger of Brown's and Kinney's
manufacturing facilities. As to the retail level, however, they
disagree.

															The District Court found that the effects of this aspect of the
merger must be analyzed in every city with a population exceeding
10,000 and its immediate contiguous surrounding territory in which
both Brown and Kinney sold shoes at retail through stores they
either owned or controlled. [ Footnote 66 ] By this definition of the geographic
market, Page 370 U. S. 338 less than one-half of all the cities in which either Brown or
Kinney sold shoes through such outlets are represented. The
appellant recognizes that, if the District Court's characterization
of the relevant market is proper, the number of markets in which
both Brown and Kinney have outlets is sufficiently numerous so that
the validity of the entire merger is properly judged by testing its
effects in those markets. However, it is appellant's contention
that the areas of effective competition in shoe retailing were
improperly defined by the District Court. It claims that such areas
should, in some cases, be defined so as to include only the central
business districts of large cities, and in others, so as to
encompass the "standard metropolitan areas" within which smaller
communities are found. It argues that any test failing to
distinguish between these competitive situations is improper.

															We believe, however, that the record fully supports the District
Court's findings that shoe stores in the outskirts of cities
compete effectively with stores in central Page 370 U. S. 339 downtown areas, and that, while there is undoubtedly some
commercial intercourse between smaller communities within a single
"standard metropolitan area," the most intense and important
competition in retail sales will be confined to stores within the
particular communities in such an area and their immediate
environs. [ Footnote 67 ]

															We therefore agree that the District Court properly defined the
relevant geographic markets in which to analyze this merger as
those cities with a population exceeding 10,000 and their environs
in which both Brown and Kinney retailed shoes through their own
outlets. Such markets are large enough to include the downtown
shops and suburban shopping centers in areas contiguous to the
city, which are the important competitive factors, and yet are
small enough to exclude stores beyond the immediate environs of the
city, which are of little competitive significance. The Probable Effect of the Merger Having delineated the product and geographic markets within
which the effects of this merger are to be measured, we turn to an
examination of the District Court's finding that as a result of the
merger competition in the retailing of men's, women's, and
children's shoes may be lessened substantially in those cities in
which both Brown and Kinney stores are located. We note, initially,
that appellant challenges this finding on a number of grounds other
than those discussed above, and on grounds independent of the
critical question of whether competition may, in fact, be lessened.
Thus, Brown objects that the District Court did not examine the
competitive picture in each line of commerce and each section of
the country it had defined as appropriate. It says the Court erred
in failing to enter findings with respect to each relevant city
assessing Page 370 U. S. 340 the anticompetitive effect of the merger on the retail sale, of,
for example, men's shoes in Council Bluffs, men's shoes in Texas
City, women's shoes in Texas City and children's shoes in St. Paul.
Even assuming a representative sample could properly be used, Brown
also objects that the District Court's detailed analysis of
competition in shoe retailing was limited to a single city St.
Louis -- a city in which Kinney did not operate. The appellant says
this analysis could not be sufficiently representative to establish
a standard image of the shoe trade which could be applied to each
of the more than 100 cities in which Brown and Kinney sold shoes,
particularly as some of those cities were much smaller than St.
Louis, others were larger, some were in different climates, and
others were in areas having different median per capita
incomes.

															However, we believe the record is adequate to support the
findings of the District Court. While it is true that the court
concentrated its attention on the structure of competition in the
city in which it sat and as to which detailed evidence was most
readily available, it also heard witnesses from no less than 40
other cities in which the parties to the merger operated. The court
was careful to point out that it was on the basis of all the
evidence that it reached its conclusions concerning the boundaries
of the relevant markets and the merger's effects on competition
within them. We recognize that variations of size climate and
wealth as enumerated by Brown exist in the relevant markets.
However, we agree with the court below that the markets with
respect to which evidence was received provide a fair sampling of
all the areas in which the impact of this merger is to be measured.
The appellant has not shown how the variables it has mentioned
could affect the structure of competition within any particular
market so as to require a change in the conclusions drawn by the
District Court. Each competitor within a given market is equally
affected by these factors, even though the city in which he does
business Page 370 U. S. 341 may differ from St. Louis in size, climate or wealth. Thus, we
believe the District Court properly reached its conclusions on the
basis of the evidence available to it. There is no reason to
protract already complex antitrust litigation by detailed analyses
of peripheral economic facts, if the basic issues of the case may
be determined through study of a fair sample. [ Footnote 68 ]

															In the case before us, not only was a fair sample used to
demonstrate the soundness of the District Court's conclusions, but
evidence of record fully substantiates those findings as to each
relevant market. An analysis of undisputed statistics of sales of
shoes in the cities in which both Brown and Kinney all shoes at
retail, separated into the appropriate lines of commerce, provides
a persuasive factual foundation upon which the required prognosis
of the merger's effects may be built. Although Brown objects to
some details in the Government's computation used in drafting these
exhibits, appellant cannot deny the correctness of the more general
picture they reveal. [ Footnote
69 ] We have appended the exhibits to this opinion. Page 370 U. S. 342 They show, for example, that, during 1955, in 32 separate cities
ranging in size and location from Topeka, Kansas, to Batavia, New
York, and Hobbs, New Mexico, the combined Page 370 U. S. 343 share of Brown and Kinney sales of women's shoes (by unit
volume) exceeded 20%. [ Footnote
70 ] In 31 cities -- some the same as those used in measuring
the effect of the merger in the women's line -- the combined share
of children's shoes sales exceeded 20%; in 6 cities, their share
exceeded 40%. In Dodge City, Kansas, their combined share of the
market for women's shoes was over 57%; their share of the
children's shoe market in that city was 49%. In the 7 cities in
which Brown's and Kinney's combined shares of the market for
women's shoes were greatest (ranging from 33% to 57%), each of the
parties alone, prior to the merger, had captured substantial
portions of those markets (ranging from 13% to 34%); the merger
intensified this existing concentration. In 118 separate cities,
the combined shares of the market of Brown and Kinney in the sale
of one of the relevant lines of commerce exceeded 5%. In 47 cities,
their share exceeded 5% in all three lines.

															The market share which companies may control by merging is one
of the most important factors to be considered when determining the
probable effects of the combination on effective competition in the
relevant market. [ Footnote
71 ] In an industry as fragmented as shoe retailing, the control
of substantial shares of the trade in a city may have important
effects on competition. If a merger achieving Page 370 U. S. 344 5% control were now approved, we might be required to approve
future merger efforts by Brown's competitors seeking similar market
shares. The oligopoly Congress sought to avoid would then be
furthered, and it would be difficult to dissolve the combinations
previously approved. Furthermore, in this fragmented industry, even
if the combination controls but a small share of a particular
market, the fact that this share is held by a large national chain
can adversely affect competition. Testimony in the record from
numerous independent retailers, based on their actual experience in
the market, demonstrates that a strong national chain of stores can
insulate selected outlets from the vagaries of competition in
particular locations, and that the large chains can set and alter
styles in footwear to an extent that renders the independents
unable to maintain competitive inventories. A third significant
aspect of this merger is that it creates a large national chain
which is integrated with a manufacturing operation. The retail
outlets of integrated companies, by eliminating wholesalers and by
increasing the volume of purchases from the manufacturing division
of the enterprise, can market their own brands at prices below
those of competing independent retailers. Of course, some of the
results of large integrated or chain operations are beneficial to
consumers. Their expansion is not rendered unlawful by the mere
fact that small independent stores may be adversely affected. It is
competition, not competitors, which the Act protects. But we cannot
fail to recognize Congress' desire to promote competition through
the protection of viable, small, locally owned business. Congress
appreciated that occasional higher costs and prices might result
from the maintenance of fragmented industries and markets. It
resolved these competing considerations in favor of
decentralization. We must give effect to that decision.

															Other factors to be considered in evaluating the probable
effects of a merger in the relevant market lend additional Page 370 U. S. 345 support to the District Court's conclusion that this merger may
substantially lessen competition. One such factor is the history of
tendency toward concentration in the industry. [ Footnote 72 ] As we have previously pointed
out, the shoe industry has, in recent years, been a prime example
of such a trend. Most combinations have been between manufacturers
and retailers, as each of the larger producers has sought to
capture an increasing number of assured outlets for its wares.
Although these mergers have been primarily vertical in their aim
and effect, to the extent that they have brought ever greater
numbers of retail outlets within fewer and fewer hands, they have
had an additional important impact on the horizontal plane. By the
merger in this case, the largest single group of retail stores
still independent of one of the large manufacturers was absorbed
into an already substantial aggregation of more or less controlled
retail outlets. As a result of this merger, Brown moved into second
place nationally in terms of retail stores directly owned.
Including the stores on its franchise plan, the merger placed under
Brown's control almost 1,600 shoe outlets, or about 7.2% of the
Nation's retail "shoe stores" as defined by the Census Bureau,
[ Footnote 73 ] and 2.3% of
the Nation's total retail Page 370 U. S. 346 shoe outlets. [ Footnote
74 ] We cannot avoid the mandate of Congress that tendencies
toward concentration in industry are to be curbed in their
incipiency, particularly when those tendencies are being
accelerated through giant steps striding across a hundred cities at
a time. In the light of the trends in this industry, we agree with
the Government and the court below that this is an appropriate
place at which to call a halt.

															At the same time, appellant has presented no mitigating factors,
such as the business failure or the inadequate resources of one of
the parties that may have prevented it from maintaining its
competitive position, nor a demonstrated need for combination to
enable small companies to enter into a more meaningful competition
with those dominating the relevant markets. On the basis of the
record before us, we believe the Government sustained its burden of
proof. We hold that the District Court was correct in concluding
that this merger may tend to lessen competition substantially in
the retail sale of men's, women's, and children's shoes in the
overwhelming majority of those cities and their environs in which
both Brown and Kinney sell through owned or controlled outlets.

															The judgment is Affirmed. MR. JUSTICE FRANKFURTER took no part in the decision of this
case.

															MR. JUSTICE WHITE took no part in the consideration or decision
of this case. Page 370 U. S. 347 [ Footnote 1 ]

															[ Footnote 2 ]

															"The general concept adopted in defining a standard metropolitan
area [is] that of an integrated economic area with a large volume
of daily travel and communication between a central city of 50,000
inhabitants or more and the outlying parts of the area. . . . Each
area (except in New England) consists of one or more entire
counties. In New England, metropolitan areas have been defined on a
town basis, rather than a county basis."

															II U.S. Bureau of the Census, United States Census of Business:
1954, p. 3.

															[ Footnote 3 ] See note 1 supra. [ Footnote 4 ]

															U.S. Bureau of Census, Facts for Industry, Production, by Kind
of Footwear: 1956 and 1955, Table 1, Production Series M31A 06,
introduced as Defendant's Exhibit MM. The term "nonrubber shoes"
includes leather shoes, sandals and play shoes, but excludes
canvas-upper, rubber-soled shoes, athletic shoes and slippers. Ibid. [ Footnote 5 ]

															These figures are based on the 1954 Census of Business. For that
enumeration, the Census Bureau classification "shoe stores"
included separately operated leased shoe departments of general
stores, as distinguished from the shoe departments of general
stores operated only as sections of the latter's general business.
U.S. Bureau of Census, Retail Trade, Single Units and Multiunits,
BC58-RS3, p. I. As described infra, Brown operated
numerous leased shoe departments in general stores which would be
included in the Census Bureau's total of "shoe stores."

															[ Footnote 6 ]

															U.S. Bureau of the Census, 1958 Census of Manufacturers, MC
58(2)-31A 6. By 1958, the number of independent manufacturers had
decreased by another 10% to 872. Ibid. [ Footnote 7 ]

															Kinney's pairage sales of men's, women's, and children's shoes
were extracted from exhibits submitted to the Government in
response to its interrogatories. See GX 6, R. 48-53. These
statistics are virtually identical to those cited in appellant's
brief, with but one exception. In its internal operations,
appellant classifies certain shoes as "growing girls" shoes while
the cited figures follow the Census Bureau's treatment of such
shoes as "women's" shoes.

															[ Footnote 8 ]

															As stated in the testimony of Clark R. Gamble, President of
Brown Shoe Company:

															"It was our feeling, in addition to getting a distribution into
the field of prices which we were not covering, it was also the
feeling that as Kinney moved into the shopping centers in these
free standing stores, they were going into a higher income
neighborhood and they would probably find the necessity of
upgrading and adding additional lines to their very successful
operation that they had been doing and it would give us an
opportunity we hoped to be able to sell them in that category.
Besides that, it was a very successful operation and would give us
a good diversified investment to stabilize our earnings."

															T. 1323.

															[ Footnote 9 ]

															Congress thus limited the right of review in such cases to an
appeal from a decree which disposed of all matters, and it
precluded the possibility of an appeal either to this Court or to a
Court of Appeals from an interlocutory decree. United States v.
California Cooperative Canneries, 279 U.
S. 553 , 279 U. S.
558 .

															[ Footnote 10 ]

															After probable jurisdiction had been noted, a joint motion of
the parties to postpone oral argument on the appeal to the present
Term of the Court was granted. 363 U.S. 825.

															[ Footnote 11 ]

															Section 22, 1 Stat. 84, in its present form, 28 U.S.C. §
1291.

															[ Footnote 12 ] Cf. 28 U.S.C. § 1292; Fed.Rules Civ.Proc., 54(b); 28
U.S.C. § 1651; Ex parte United States, 226 U.
S. 420 ; United States v. United States District
Court, 334 U. S. 258 ; Beacon Theatres, Inc. v. Westover, 359 U.
S. 500 .

															[ Footnote 13 ]

															Fed.Rules Civ.Proc., 1

															[ Footnote 14 ] See, e.g., United States v. Reading Co., 226 F. 229,
286 (D.C.E.D.Pa.), 1 Decrees & Judgments in Civil Federal
Antitrust Cases (hereinafter cited "D. & J.") 575, 576-577, affirmed in pertinent part, 253 U. S. 253 U.S.
26; United States v. National Lead Co., 63 F. Supp.
513 , 534 535 (D.C.S.D.N.Y.), 4 D. & J. 2846, 2851, affirmed, 332 U. S. 332 U.S.
319; United States v. Timken Roller Bearing
Co., 83 F. Supp.
284 , 318 (D.C.N.D.Ohio) (relevant portions of the decree
reprinted at 341 U. S. 341 U.S.
593, 341 U. S. 602 n. 1), modified, 341 U. S. 341 U.S.
593; United States v. United Shoe Machinery
Corp., 110 F.
Supp. 295 , 352 353, 354 (D.C.D.Mass.), affirmed, 347 U. S. 521 ; United States v. Maryland & Virginia Milk Producers
Ass'n, 167 F.
Supp. 799 , 809 (D.C.D.C.), affirmed, 362 U. S. 362 U.S.
458. The Court has also approved the practice of District Courts of
retaining jurisdiction in such cases for future modifications of
their decrees, a practice which has also not been considered
inconsistent with the finality of the original decrees. See
Associated Press v. United States, 326 U. S.
1 , 326 U. S. 22 -23; Lorain Journal Co. v. United States, 342 U.
S. 143 , 342 U. S. 157 . But cf. United States v. Schine Chain
Theatres, 63 F. Supp.
229 , 241 242 (D.C.W.D.N.Y.), 2 D. & J. 1815, modified, 334 U. S. 334 U.S.
110; United States v. Paramount Pictures, 70 F. Supp.
53 , 72, 75 (D.C.S.D.N.Y.), 2 D. & J. 1682, modified, 334 U. S. 334 U.S.
131, revised in accordance with this Court's mandate, 85 F. Supp.
881 , 898-901, 2 D. & J. 1690, affirmed sub nom. Loew's,
Inc. v. United States, 339 U.S. 974, in which review did await
the entry of specific and detailed provisions for disposition of
the defendants' assets.

															[ Footnote 15 ] Cf. 47 U. S. Conrad, 6 How. 201; Carondelet Canal & Navigation Co.
v. Louisiana, 233 U. S. 362 ; Radio Station WOW v. Johnson, 326 U.
S. 120 ; Cohen v. Beneficial Industrial Loan
Corp., 337 U. S. 541 . The
details of the divestiture which the District Court will approve
cannot affect the outcome of the basic litigation in this case, as
the details of an eminent domain settlement might moot the claims
of the condemnee in that type of suit. See Republic Natural Gas
Co. v. Oklahoma, 334 U. S. 62 ; Grays Harbor Logging Co. v. Coats-Fordney Logging Co., 243 U. S. 251 .

															[ Footnote 16 ]

															The Court has, of course, occasionally reviewed varying facets
of single antitrust cases on separate appeals. However, such cases
are distinguishable from the situation at bar. Thus, one group
includes cases in which the Government first sought appellate
review from dismissals of its complaints, whereafter the Court
considered the orders entered on remand. E.g., United States v.
Terminal R. Ass'n of St. Louis, 224 U.
S. 383 ; 236 U. S. 236 U.S.
194; United States v. E. I. du Pont de Nemours & Co., 353 U. S. 586 ; 366 U. S. 366 U.S.
316. Another group includes cases in which the Government appealed
from what it considered to be inadequate decrees, in which the
Court later considered the further relief ordered on remand. E.g., United States v. Reading Co., 253 U. S.
26 , later considered sub nom. Continental Insurance
Co. v. United States, 259 U. S. 156 ; United States v. Paramount Pictures, 334 U.
S. 131 , later considered sub nom. Loew's, Inc. v.
United States, 339 U.S. 974. And appeals in which the details
of a divestiture were made a primary issue have followed the entry
of such orders upon the filing of consent decrees, in which the
underlying requirements of divestiture were never previously
presented. E.g., Swift & Co. v. United States, 276 U. S. 311 ; United States v. Swift & Co., 286 U.
S. 106 ; Chrysler Corp. v. United States, 316 U. S. 556 ; Ford Motor Co. v. United States, 335 U.
S. 303 . Cf. International Harvester Co. of New
Jersey v. United States, 248 U.S. 587; 274 U. S. 274 U.S.
693.

															[ Footnote 17 ] Cf. Jerrold Electronics Corp. v. United States, 365 U. S. 567 , affirming 187 F.
Supp. 545 , 563 567 (D.C.E.D.Pa.).

															[ Footnote 18 ]

															Material in italics was added by the amendments; material in
brackets was deleted.

															"No corporation engaged in commerce shall acquire, directly or
indirectly, the whole or any part of the stock or other share
capital and no corporation subject to the jurisdiction of the
Federal Trade Commission shall acquire the whole or any part of the
assets of another corporation engaged also in commerce, where
in any line of commerce in any section of the country, the effect
of such acquisition may be [to] substantially to lessen competition
[between the corporation whose stock is so acquired and the
corporation making the acquisition, or to restrain such commerce in
any section or community], or to tend to create a monopoly [of any
line of commerce]."

															Other paragraphs of § 7 were also amended in details not
relevant to this case. The only other cases to reach this Court, in
which the Government's complaints were based, in part, on amended §
7, were Maryland & Virginia Milk Producers Ass'n v. United
States, 362 U. S. 458 , and Jerrold Electronics Corp. v. United States, 365 U.
S. 567 . However, a detailed analysis of the scope and
purposes of the 1950 amendments was unnecessary to our disposition
of the issues raised in those cases.

															[ Footnote 19 ]

															S. 2277, 67th Cong., 1st Sess. (1921); H.R. 7371, S. 2549, 75th
Cong., 1st Sess. (1937); H.R. 10176, S. 3345, 75th Cong., 2d Sess.
(1938); H.R. 1517, S. 577, 78th Cong., 1st Sess. (1943); H.R. 2357,
H.R. 4519, H.R. 4810, S. 615, 79th Cong., 1st Sess. (1945); H.R.
4519, H.R. 4810; H.R. 5535, 79th Cong., 2d Sess. (1946); H.R. 515,
H.R. 3736, S. 104, 80th Cong., 1st Sess. (1947); H.R. 7024, 80th
Cong., 2d Sess. (1948); H.R. 988, H.R. 1240, H.R. 2006, H.R. 2734,
S. 56, 81st Cong., 1st Sess. (1949).

															Public Hearings were held on H.R. 2357, 79th Cong., 1st Sess.
(1945); S. 104, 80th Cong., 1st Sess. (1947); H.R. 515, 80th Cong.,
1st Sess. (1947), and H.R. 2734, 81st Cong., 1st Sess. (1949
1950).

															For reviews of the legislative history of the amendments, see Notes, 52 Col.L.Rev. 766 (1952); 46 Ill.L.Rev. 444
(1951); Bok, Section 7 of the Clayton Act and the Merging of Law
and Economics, 74 Harv.L.Rev. 226, 233 238 (1960); Handler and
Robinson, A Decade of Administration of the Celler-Kefauver
Antimerger Act, 61 Col.L.Rev. 629, 652 674 (1961); Martin, Mergers
and the Clayton Act 221-310 (1959).

															[ Footnote 20 ] See Arrow-Hart & Hegeman Electric Co. v. Federal Trade
Comm'n, 291 U. S. 587 ; Federal Trade Comm'n v. Western Meat Co., 272 U.
S. 554 . See also United States v. Celanese
Corp., 91 F. Supp.
14 (D.C.S.D.N.Y.); 1 F.T.C. 541 542; 33 Op.Atty.Gen. 225,
241.

															[ Footnote 21 ]

															This was the manner in which the Federal Trade Commission had
viewed the prohibitions of original § 7. See F.T.C.Ann.Rep. 6 7 (1929); Statement by General Counsel Kelley in
Hearings before Subcommittee 3 of the House Committee on the
Judiciary on H.R. 2734, 81st Cong., 1st Sess. (hereinafter cited as
H.R. Hearings on H.R. 2734) 38. However, we have held, since the
adoption of the 1950 amendments, that such a construction of § 7
was incorrect. United States v. E.I. du Pont de Nemours &
Co., 353 U. S. 586 .

															[ Footnote 22 ]

															For expressions of this questionable view of the background of
the original Act, see F.T.C., The Merger Movement: A
Summary Report 2 (1948); testimony of then Representative Kefauver,
in Hearings before Subcommittee 2 of the House Committee on the
Judiciary on H.R. 515, 80th Cong., 1st Sess. (hereinafter cited as
Hearings on H.R. 515) 4-5; remarks of Senator O'Mahoney, 96
Cong.Rec. 16443; H.R.Rep. No.1191, 81st Cong., 1st Sess. 4-5. For a
critique of this understanding of the Act, see United States v.
E.I. du Pont de Nemours & Co., 353 U.
S. 586 , 353 U. S.
613 -615 (dissent), and reviews cited in note 19 supra. [ Footnote 23 ] See 51 Cong.Rec. 14255, 14316, 14456-14457 (remarks of
Senators Chilton, Cummins, Colt, Reed). An amendment offered during
the Senate's floor debate by Senator Cummins would have precluded
the acquisition by one corporation of the stock "or any other means
of control or participation in the control" of two or more other
corporations carrying on business of the same kind or competitive
in character. The amendment was not directed at asset acquisitions
specifically and was, in any event, overwhelmingly defeated. 51
Cong.Rec. 14315, 14473-14476.

															[ Footnote 24 ] See 51 Cong.Rec. 9073-9074, 9271, 14226, 14254, 14316,
14420, 14465-14466 (remarks of Representatives Webb and Carlin and
Senators Reed, Cummins and Poindexter); H.R.Rep. No.627, 63d Cong.,
2d Sess. 17; S.Rep. No. 698, 63d Cong., 2d Sess. 13.

															[ Footnote 25 ] See F.T.C.Ann.Rep. for 1928, 19; id. for 1929,
at 6, 59; id. for 1930, at 50-51; id. for 1935,
at 16, 48; id. for 1936, at 48; id. for 1937, at
15; id. for 1938, at 11, 19, 29; id. for 1939, at
14, 16; id. for 1940, at 12-13; id. for 1941, at
19-20; id. for 1942, at 9; id. for 1943, at 9; id. for 1944, at 8; id. for 1945, at 8-9; id. for 1946, at 12; id. for 1947, at 12; id. for 1948, at 11, 16. The Commission has continued
unsuccessfully to urge adoption of the prior notification
provision. See id. for 1958, at 7; id. for 1960,
at 12.

															[ Footnote 26 ]

															Temporary National Economic Committee, Final Report and
Recommendations, S.Doc.No.35, 77th Cong., 1st Sess. 38 40
(1941).

															[ Footnote 27 ]

															F.T.C., The Present Trend of Corporate Mergers and Acquisitions,
reprinted in Hearings on H.R. 515, at 300 317; F.T.C., The Merger
Movement: A Summary Report, passim; 95 Cong.Rec. 11500
11507; 96 Cong.Rec. 16433, 16444, 16457; S.Rep. No.1775, 81st
Cong., 2d Sess. 3, U.S.Code Cong. and Adm.News 1950, p. 4293 et
seq. The House Report on the amendments summarized its view of
the situation:

															"That the current merger movement (during the years 1940-1947)
has had a significant effect on the economy is clearly revealed by
the fact that the asset value of the companies which have
disappeared through mergers amounts to 5.2 billion dollars, or no
loss than 5.5 percent of the total assets of all manufacturing
corporations -- a significant segment of the economy to be
swallowed up in such a short period of time."

															H.R.Rep. No.1191, 81st Cong., 1st Sess. 3.

															[ Footnote 28 ] See, e.g., 95 Cong.Rec. 11486, 11489, 11494-11495,
11498; 96 Cong.Rec. 16444, 16448, 16450, 16452, 16503 (remarks by
the cosponsors of the amendments, Representative Celler and Senator
Kefauver, and by Representatives Bryson, Keating and Patman and
Senators Murray and Aiken). Cf. United States v. Aluminum Co.
of America, 148 F.2d 416, 429 (C.A.2d Cir., per Learned Hand,
J.):

															"Throughout the history of these [antitrust] statutes it has
been constantly assumed that one of their purposes was to
perpetuate and preserve, for its own sake and in spite of possible
cost, an organization of industry in small units which can
effectively compete with each other."

															[ Footnote 29 ]

															Virtually every member of congress who spoke in support of the
amendments, indicated that this aspect of the legislation was its
salient characteristic. Representative Kefauver, one of the Act's
sponsors, testified, "The bill is not complicated. It proposes
simply to plug the loophole in sections 7 and 11 of the Clayton
Act." Hearings on H.R. 515, at 4. The Senate Report on the measure
finally adopted summarized the "Purpose" of the amendment with this
single paragraph:

															"The purpose of the proposed legislation is to prevent
corporations from acquiring another corporation by means of the
acquisition of its assets, whereunder [ sic ] the present
law it is prohibited from acquiring the stock of said corporation.
Since the acquisition of stock is significant chiefly because it is
likely to result in control of the underlying assets, failure to
prohibit direct purchase of the same assets has been inconsistent
and paradoxical as to the over-all effect of existing law."

															S.Rep. No.1775, 81st Cong., 2d Sess. 2, U.S.Code Cong. and
Adm.News 1950, p. 4294.

															[ Footnote 30 ]

															The deletion of the "acquiring-acquired" test was the direct
result of an amendment offered by the Federal Trade Commission. In
presenting the proposed change, Commission Counsel Kelley made the
following points: this Court's decisions had implied that the
effect on competition between the parties to the merger was not the
only test of the illegality of a stock merger; the Court had
applied Sherman Act tests to Clayton Act cases, and thus judged the
effect of a merger on the industry as a whole; this incorporation
of Sherman Act tests, with the accompanying "rule of reason," was
inadequate for reaching some mergers which the Commission felt were
not in the public interest; and the new amendment proposed a middle
ground between what appeared to be an overly restrictive test
insofar as mergers between competitors were concerned, and what
appeared to the Commission to be an overly lenient test insofar as
all other mergers were concerned. Congressman Kefauver supported
this amendment and the Commission's proposal was then incorporated
into the bill which was eventually adopted by the Congress. See Hearings on H.R. 515, at 23, 117-119, 238-240, 259;
Hearings before a Subcommittee of the Senate Judiciary Committee on
H.R. 2734, 81st Cong., 1st Sess. (hereinafter cited as S. Hearings
on H.R. 2734) 147.

															[ Footnote 31 ]

															That § 7 was intended to apply to all mergers horizontal,
vertical or conglomerate was specifically reiterated by the House
Report on the final bill. H.R.Rep. No. 1191, 81st Cong., 1st Sess.
11. And see note 21 supra. [ Footnote 32 ]

															That § 7 of the Clayton Act was intended to reach incipient
monopolies and trade restraints outside the scope of the Sherman
Act was explicitly stated in the Senate Report on the original Act.
S.Rep. No. 698, 63d Cong., 2d Sess. 1. See United States v.
E.I. du Pont de Nemours & Co., 353 U.
S. 586 , 353 U. S. 589 .
This theme was reiterated in congressional consideration of the
amendments adopted in 1950, and found expression in the final House
and Senate Reports on the measure. H.R.Rep. No. 1191, 81st Cong.,
1st Sess. 8 ("Acquisitions of stock or assets have a cumulative
effect, and control of the market . . . may be achieved not in a
single acquisition, but as the result of a series of acquisitions.
The bill is intended to permit intervention in such a cumulative
process when the effect of an acquisition may be a significant
reduction in the vigor of competition."); S.Rep. No. 1775, 81st
Cong., 2d Sess. 4-5, U.S.Code Cong. and Adm.News, 1950, p. 4296
("The intent here . . . is to cope with monopolistic tendencies in
their incipiency, and well before they have attained such effects
as would justify a Sherman Act proceeding."). And see F.T.C., The Merger Movement: A Summary Report 6-7.

															[ Footnote 33 ]

															The Report of the House Judiciary Committee on H.R. 515
recommended the adoption of tests more stringent than those in the
Sherman Act. H.R.Rep. No. 596, 80th Cong., 1st Sess. 7. A vigorous
minority thought no new legislation was needed. Id. at
11-18. Between the issuance of this Report and the Committee's
subsequent consideration of H.R. 2734, this Court had decided United States v. Columbia Steel Co., 334 U.
S. 495 , which some understood to indicate that existing
law might be inadequate to prevent mergers that had substantially
lessened competition in a section of the country, but which,
nevertheless, had not risen to the level of those restraints of
trade or monopoly prohibited by the Sherman Act. See 96
Cong.Rec. 16502 (remarks of Senator Kefauver); H.R.Rep. No. 1191,
81st Cong., 1st Sess. 10 11. Numerous other statements by
Congressmen and Senators and by representatives of the Federal
Trade Commission, the Department of Justice and the President's
Council of Economic Advisors were made to the Congress suggesting
that a standard of illegality stricter than that imposed by the
Sherman Act was needed. See, e.g., H.R. Hearings on H.R.
2734, at 13, 29, 41, 117; S. Hearings on H.R. 2734, at 22, 23, 47,
66, 319. The House Judiciary Committee's 1949 Report supported this
concept unanimously although five of the nine members who had
dissented two years earlier in H.R. Rep. No. 596 were still serving
on the Committee. H.R.Rep. No. 1191, 81st Cong., 1st Sess. 7-8. The
Senate Report was explicit:

															"The committee wish to make it clear that the bill is not
intended to revert to the Sherman Act test. The intent here . . .
is to cope with monopolistic tendencies in their incipiency and
well before they have attained such effects as would justify a
Sherman Act proceeding. . . . [The] various additions and deletions
some strengthening and others weakening the bill are not
conflicting in purpose and effect. They merely are different steps
toward the same objective, namely, that of framing a bill which,
though dropping portions of the so-called Clayton Act test that
have no economic significance (the reference would appear to be
primarily to the 'acquiring-acquired' standard of the original
Act), reaches far beyond the Sherman Act."

															S.Rep. No. 1775, 81st Cong., 2d Sess. 4 5, U.S.Code Cong. and
Adm.News 1950, p. 4296.

															[ Footnote 34 ]

															As to small company mergers, see H.R. Hearings on H.R.
2734, at 41, 117; S. Hearings on H.R. 2734, at 6, 51; 95 Cong.Rec.
11486, 11488, 11506; 96 Cong.Rec. 16436; H.R.Rep. No. 1191, 81st
Cong., 1st Sess. 6 8; S.Rep. No. 1775, 81st Cong., 2d Sess. 4. As
to mergers with failing companies, see S.Hearings on H.R.
2734, at 115, 134-135, 198; 96 Cong.Rec. 16435, 16444; H.R.Rep. No.
1191, supra, at 6; S.Rep. No. 1775, supra, at
7.

															[ Footnote 35 ]

															The Federal Trade Commission's amendment, see note 30 supra, included the
phrase

															"where . . . , in any section, community, or trade area, there
is reasonable probability that the effect of such acquisition may
be to substantially lessen competition."

															Congressman Kefauver urged deletion of the word "community" on
the ground that it might suggest, for example, that a merger
between two small filling stations in a section of a city was
proscribed. Hearings on H.R. 515, at 260. And see also 96
Cong.Rec. 16453. The fear of literal prohibition of all but de
minimis mergers through the use of the word "community" was
also cited by the Senate Report as the basis for its retention
solely of the word "section." S.Rep. No. 1775, 81st Cong., 2d Sess.
4. The reference to "trade area" was deleted as redundant when it
became clear that the "section" of the country to which the Act was
to apply referred not to a definite geographic area of the country,
but rather the geographic area of effective competition in the
relevant line of commerce. See S. Hearings on H.R. 2734,
at 38 52, 66 84, 101-102, 132, 133, 144, 145; H.R.Rep. No. 1191,
81st Cong., 1st Sess. 8; S.Rep. No. 1775, 81st Cong., 2d Sess. 4,
5-6. The senate Report cited with approval the definition of the
market employed by the Court in Standard Oil Co. of California
v. United States, 337 U. S. 293 , 337 U. S. 299 n. 5.

															[ Footnote 36 ]

															The House Report on H.R. 2734 stated that two tests of
illegality were included in the proposed Act: whether the merger
substantially lessened competition or tended to create a monopoly.
It stated that such effects could be perceived through findings,
for example, that a whole or material part of the competitive
activity of an enterprise which had been a substantial factor in
competition had been eliminated; that the relative size of the
acquiring corporation had increased to such a point that its
advantage over competitors threatened to be "decisive"; that an
"undue" number of competing enterprises had been eliminated; or
that buyers and sellers in the relevant market had established
relationships depriving their rivals of a fair opportunity to
compete. H.R.Rep. No. 1191, 81st Cong., 1st Sess. 8. Each of these
standards, couched in general language, reflects a conscious
avoidance of exclusively mathematical tests even though the case of Standard Oil Co. of California v. United States, 337 U. S. 293 ,
said to have created a "quantitative substantiality" test for suits
arising under § 3 of the Clayton Act, was decided while Congress
was considering H.R. 2734. Some discussion of the applicability of
this test to § 7 cases ensued, see, e.g., S. Hearings on
H.R. 2734, at 31-32, 169 172; S.Rep. No. 1775, 81st Cong., 2d Sess.
21; 96 Cong.Rec. 16443, but this aspect of the Standard
Oil decision was neither specifically endorsed nor impugned by
the bill's supporters. However, the House Judiciary Committee's
Report, issued two months after Standard Oil had been
decided, remarked that the tests of illegality under the new Act
were intended to be "similar to those which the courts have applied
in interpreting the same language as used in other sections of the
Clayton Act." H.R.Rep. No. 1191, 81st Cong., 1st Sess. 8.

															[ Footnote 37 ]

															A number of the supporters of the amendments voiced their
concern that passage of the bill would amount to locking the barn
door after most of the horses had been stolen, but urged approval
of the measure to prevent the theft of those still in the barn.
Which was to say that, if particular industries had not yet been
subject to the congressionally perceived trend toward
concentration, adoption of the amendments was urged as a way of
preventing the trend from reaching those industries as yet
unaffected. See, e.g., 95 Cong.Rec. 11489, 11494, 11498
(remarks of Representatives Keating, Yates, Patman); 96 Cong.Rec.
16444 (remarks of Senators O'Mahoney, Murray).

															[ Footnote 38 ]

															Subsequent to the adoption of the 1950 amendments, both the
Federal Trade Commission and the courts have, in the light of
Congress' expressed intent, recognized the relevance and importance
of economic data that places any given merger under consideration
within an industry framework almost inevitably unique in every
case. Statistics reflecting the shares of the market controlled by
the industry leaders and the parties to the merger are, of course,
the primary index of market power; but only a further examination
of the particular market its structure, history and probable future
can provide the appropriate setting for judging the probable
anticompetitive effect of the merger. See, e.g., Pillsbury
Mills, Inc., 50 F.T.C. 555; United States v. Bethlehem
Steel Corp., 168 F.
Supp. 576 (D.C.S.D.N.Y.); United States v. Jerrold
Electronics Corp., 187 F.
Supp. 545 (D.C.E.D.Pa.), aff'd, 365 U.
S. 567 . And see U.S. Atty. Gen. Nat. Comm'n to
Study the Antitrust Laws, Report 126 (1955).

															[ Footnote 39 ]

															In the course of both the Committee hearings and floor debate,
attention was occasionally focused on the issue of whether
"possible," "probable" or "certain" anticompetitive effects of a
proposed merger would have to be proven to establish a violation of
the Act. Language was quoted from prior decisions of the Court in
antitrust cases in which each of these interpretations of the word
"may" was suggested as appropriate. H.R.Hearings on H.R. 2734, at
74; S. Hearings on H.R. 2734, at 32, 33, 160 168; 96 Cong.Rec.
16453, 16502. The final Senate Report on the question was explicit
on the point:

															"The use of these words ['may be'] means that the bill, if
enacted, would not apply to the mere possibility, but only to the
reasonable probability, of the prescribed [ sic ] effect. .
. . The words 'may be' have been in section 7 of the Clayton Act
since 1914. The concept of reasonable probability conveyed by these
words is a necessary element in any statute which seeks to arrest
restraints of trade in their incipiency and before they develop
into full-fledged restraints violative of the Sherman Act. A
requirement of certainty and actuality of injury to competition is
incompatible with any effort to supplement the Sherman Act by
reaching incipient restraints."

															S.Rep. No.1775, 81st Cong., 2d Sess. 6, U.S.Code Cong. and
Adm.News 1950, p. 4298. See also 51 Cong.Rec. 14464
(remarks of Senator Reed).

															[ Footnote 40 ]

															In addition, a vertical merger may disrupt and injure
competition when those independent customers of the supplier who
are in competition with the merging customer, are forced either to
stop handling the supplier's lines, thereby jeopardizing the
goodwill they have developed, or to retain the supplier's lines,
thereby forcing them into competition with their own supplier. See United States v. Bethlehem Steel Corp., 168 F.
Supp. 576 , 613 (D.C.S.D.N.Y.). See also GX 13, R. 215,
a letter from Sam Sullivan, an independent shoe retailer, to Clark
Gamble, President of Brown Shoe Co.

															[ Footnote 41 ] United States v. E.I. du Pont de Nemours & Co., 353 U. S. 586 , 353 U. S.
593 .

															[ Footnote 42 ]

															The cross-elasticity of production facilities may also be an
important factor in defining a product market within which a
vertical merger is to be viewed. Cf. United States v. Columbia
Steel Co., 334 U. S. 495 , 334 U. S.
510 -511; United States v. Bethlehem Steel
Corp., 168 F.
Supp. 576 , 592 (D.C.S.D.N.Y.). However, the District Court made
but limited findings concerning the feasibility of interchanging
equipment in the manufacture of nonrubber footwear. At the same
time, the record supports the court's conclusion that individual
plants generally produced shoes in only one of the product lines
the court found relevant.

															[ Footnote 43 ] See generally Bock, Mergers and Markets, An Economic
Analysis of Case Law 25-35 (1960).

															[ Footnote 44 ] United States v. E.I. du Pont de Nemours & Co., 353 U. S. 586 , 353 U. S. 592 , 353 U. S. 595 ; A. G. Spalding & Bros. Inc. v. Federal Trade Comm'n, 301 F.2d 585, 603 (C.A.3d Cir.); American Crystal Sugar Co. v.
Cuban-American Sugar Co., 259 F.2d 524, 527 (C.A.2d Cir.); United States v. Bethlehem Steel Corp., 168 F.
Supp. 576 , 603 (D.C.S.D.N.Y.). See also note 39 supra. [ Footnote 45 ]

															15 U.S.C. §§ 1 and 2. See S.Rep. No.1775, 81st Cong.,
2d Sess. 4-5.

															[ Footnote 46 ] See note 33 supra. [ Footnote 47 ] See note 38 supra, and note 55 infra, and the accompanying text.

															[ Footnote 48 ]

															Although it is "unnecessary for the Government to speculate as
to what is in the back of the minds' of those who promote a
merger," H.R.Rep. No.1191, 81st Cong., 1st Sess. 8, evidence
indicating the purpose of the merging parties, where available, is
an aid in predicting the probable future conduct of the parties,
and thus the probable effects of the merger. Swift & Co. v.
United States, 196 U. S. 375 , 196 U. S. 396 ; United States v. Maryland & Virginia Milk Producers
Ass'n, 167 F.
Supp. 799 , 804 (D.C.D.C.), aff'd, 362 U. S. 362 U.S.
458. [ Footnote 49 ] See H.R.Rep. No.1191, 81st Cong., 1st Sess. 8.

															[ Footnote 50 ] See also Comment, 59 Mich.L.Rev. 1236, 1239-1240
(1961).

															[ Footnote 51 ] Compare Standard Oil Co. of California v. United
States, 337 U. S. 293 , 337 U. S. 306 , with Federal Trade Comm'n v. Sinclair Refining Co., 261 U. S. 463 .

															[ Footnote 52 ]

															H.R.Rep. No.1191, 81st Cong., 1st Sess. 6; S.Rep. No.1775, 81st
Cong., 2d Sess. 7, U.S.Code Cong. and Adm.News 1950, p. 4299.

															[ Footnote 53 ] See note 34 supra. Compare Harley-Davidson Co., 50 F.T.C.
1047, 1066, and U.S.Atty.Gen.Nat.Comm'n to Study the Antitrust
Laws, Report 143 (1955).

															[ Footnote 54 ] See note 8 supra. [ Footnote 55 ]

															Moreover, ownership integration is a more permanent and
irreversible tie than is contract integration. See Kessler
and Stern, Competition, Contract, and Vertical Integration, 69 Yale
L.J. 1, 78 (1959).

															[ Footnote 56 ] See generally Pillsbury Mills, Inc., 50 F.T.C. 555, 572
573; United States v. Bethlehem Steel
Corp., 168 F.
Supp. 576 , 606 (D.C.S.D.N.Y.); Stigler, Mergers and Preventive
Antitrust Policy, 104 U. of Pa.L.Rev. 176, 180 (1955);
U.S.Atty.Gen.Nat. Comm'n to Study the Antitrust Laws, Report 124
(1955).

															[ Footnote 57 ] See Handler and Robinson, A Decade of Administration of
the Celler-Kefauver Antimerger Act, 61 Col.L.Rev. 629, 668
(1961).

															[ Footnote 58 ] See note 39 supra, and accompanying text.

															[ Footnote 59 ] United States v. E.I. du Pont de Nemours & Co., 353 U. S. 586 , 353 U. S. 589 , 353 U. S.
597 .

															[ Footnote 60 ] See note 28 supra, and accompanying text.

															[ Footnote 61 ] See also Stigler, Mergers and Preventive Antitrust
Policy, 104 U. of Pa.L.Rev. 176, 180 (1955).

															[ Footnote 62 ] See, e.g., United States v. Trenton Potteries Co., 273 U. S. 392 ; Sugar Institute, Inc. v. United States, 297 U.
S. 553 ; United States v. Paramount Pictures, 334 U. S. 131 ; Timken Roller Bearing Co. v. United States, 341 U.
S. 593 .

															[ Footnote 63 ] See note 30 supra. [ Footnote 64 ] American Crystal Sugar Co. v. Cuban-American Sugar
Co., 152 F.
Supp. 387 , 398 (D.C.S.D.N.Y.), aff'd, 259 F.2d 524
(C.A.2d Cir.); S.Rep. No. 1775, 81st Cong., 2d Sess. 5-6.

															[ Footnote 65 ]

															The illustrate: if two retailers, one operating primarily in the
eastern half of the Nation, and the other operating largely in the
West, competed in but two mid-Western cities, the fact that the
latter outlets represented but a small share of each company's
business would not immunize the merger in those markets in which
competition might be adversely affected. On the other hand, that
fact would, of course, be properly considered in determining the
equitable relief to be decreed. Cf. United States v. Jerrold
Electronics Corp., 187 F.
Supp. 545 (D.C.E.D.Pa.), aff'd, 365 U.
S. 567 .

															[ Footnote 66 ]

															In describing the geographic market in which Brown and Kinney
competed, the District Court included cities in which Brown
"Franchise Plan" and "Wohl Plan" stores were located. Although such
stores were not owned or directly controlled by Brown, did not sell
Brown products exclusively, and did not finance inventory through
Brown, we believe there was adequate evidence before the District
Court to support its finding that such stores were "Brown stores."
To such stores, Brown provided substantial assistance in the form
of merchandising and advertising aids, reports on market and
management research, loans, group life and fire insurance, and
centralized purchase of rubber footwear from manufacturers on
Brown's credit. For these services, Brown required the retailer to
deal almost exclusively in Brown's products in the price scale at
which Brown shoes sold. Further, Brown reserved the power to
terminate such franchise agreements on 30 days' notice. Since the
retailer was required, under this plan, to invest his own resources
and develop his good will to a substantial extent in the sale of
Brown products, the flow of which Brown could readily terminate,
Brown was able to exercise sufficient control over these stores and
departments to warrant their characterization as "Brown" outlets
for the purpose of measuring the share and effect of Brown's
competition at the retail level. Cf. Standard Oil Co. of
California v. United States, 337 U. S. 293 .

															[ Footnote 67 ]

															The District Court limited its findings to cities having a
population of at least 10,000 persons, since Kinney operated only
in such areas.

															[ Footnote 68 ] See Standard Oil Co. of California v. United States, 337 U. S. 293 , 337 U. S. 313 ;
U.S. Atty. Gen. Nat. Comm'n to Study the Antitrust Laws, Report 126
(1955):

															"While sufficient data to support a conclusion is required,
sufficient data to give the enforcement agencies, the courts and
business certainty as to competitive consequences would nullify the
words 'Where the effect may be' in the Clayton Act and convert them
into 'Where the effect is.'"

															And the Committee of the Judicial Conference of the United
States on Procedure in Antitrust and Other Protracted Cases has
also emphasized the need for limiting the mass of possibly relevant
evidence in cases of this type in order to avoid confusion and its
concomitant increased possibility of error. 13 F.R.D. 62, 64.

															[ Footnote 69 ]

															Brown objects, for example, to the fact that these exhibits are
drafted on the basis of the cities concerning which census
information was available, rather than on the basis of the cities
and their environs as the relevant markets were defined by the
District Court. However, the record shows that the statistics of
shoe sales in cities by and large conform to statistics of shoe
sales in counties in which those cities are the principal
metropolitan area. See 370
U.S. 294 appd|>Appendix D, infra. Thus, we find no
error in a conclusion drawn as to a slightly larger market from the
available record of sales in cities alone. Brown also objects to
the use of pairage sales, rather than dollar volume, as the basis
for defining the size, and measuring Brown's shares, of the market.
However, since Brown and Kinney sold shoes primarily in the low and
medium price ranges, and in the light of the conceded spread in
shoe prices, we agree that sales measured by pairage provide a more
accurate picture of the Brown-Kinney shares of the market than do
sales measured in dollars. Detailed statistics of shoe sales were
available only in terms of dollar volume, however, and Brown
objects to the method by which the Government has converted those
figures into those reflecting sales in terms of pairage. The
Government's conversion was, with some exceptions, based on
national median income and national averages of shoe prices and the
ratio of men, women and children in the population. The District
Court accepted expert testimony offered by the Government to the
effect that shoe price and population age, sex and income
variations in the relevant cities produced, at most, a 6% error in
the converted statistics, and that his error was as likely to favor
Brown (by increasing the universe of sales against which Brown's
shares were to be measured) as it was to disfavor it. We find no
error in the District Court's acceptance of the Government's
evidence as to the propriety of the accounting methods its experts
employed. Lastly, Brown objects that the statistics concerning its
own pairage sales were improperly derived, since they included
sales by its wholesale distributors to the retail outlets on its
franchise plans in the same category as sales to ultimate consumers
by its owned retail stores. Again, while recognizing a possible
margin of error in statistics combining sales at two levels of
distribution, we believe they provide an adequate basis upon which
to gauge Brown sales through outlets it controlled. Particularly as
the franchise stores were required to finance their own inventory,
does it seem reasonable to conclude that most of their purchases
from Brown's distributors were eventually resold. In summary,
although appellant may point to technical flaws in the compilation
of these statistics, we recognize that, in cases of this type,
precision in detail is less important than the accuracy of the
broad picture presented. We believe the picture as presented by the
Government in this case is adequate for making the determination
required by § 7: whether this merger may tend to lessen competition
substantially in the relevant markets.

															[ Footnote 70 ]

															Although the sum of the parties' preexisting shares of the
market will normally equal their combined share of the immediate
post-merger market, we recognize that this share need not remain
stable in the future. Nevertheless, such statistics provide a
graphic picture of the immediate impact of a merger, and, as such,
also provide a meaningful base upon which to build conclusions of
the probable future effects of the merger.

															[ Footnote 71 ] See United States v. E.I. du Pont de Nemours & Co., 353 U. S. 586 , 353 U. S.
595 -596; A. G. Spalding & Bros. Inc. v. Federal
Trade Comm'n, 301 F.2d 585, 612-615 (C.A.3d Cir.); United
States v. Bethlehem Steel Corp., 168 F.
Supp. 576 , 603-611 (D.C.S.D.N.Y.). Cf. Bok, Section 7
of the Clayton Act and the Merging of Law and Economics, 74
Harv.L.Rev. 226, 279, 308 311 (1960).

															[ Footnote 72 ] See note 38 supra. A company's history of expansion through mergers
presents a different economic picture than a history of expansion
through unilateral growth. Internal expansion is more likely to be
the result of increased demand for the company's products and is
more likely to provide increased investment in plants, more jobs
and greater output. Conversely, expansion through merger is more
likely to reduce available consumer choice while providing no
increase in industry capacity, jobs or output. It was for these
reasons, among others, Congress expressed its disapproval of
successive acquisitions. Section 7 was enacted to prevent even
small mergers that added to concentration in an industry. See S.Rep. No. 1775, 81st Cong., 2d Sess. 5. Cf.
United States v. Jerrold Electronics Corp., 187 F.
Supp. 545 , 566 (D.C.E.D.Pa.), aff'd, 365 U.
S. 567 ; United States v. Bethlehem Steel
Corp., 168 F.
Supp. 576 , 606 (D.C.S.D.N.Y.).

															[ Footnote 73 ] See note 5 supra. [ Footnote 74 ]

															Although statistics concerning the degree of concentration and
the rank of Brown-Kinney in terms of controlled retail stores in
each of the relevant product and geographic markets would have been
more helpful in analyzing the results of this merger, neither side
has presented such statistics. The figures in the record, based on
national rank, are nevertheless, useful in depicting the trends in
the industry.

															| 370
U.S. 294 appa| APPENDIX A Sales of women's shoes by Brown and Kinney as a share
of the total city sales in selected areas
(1955) bwm:

-------------------------------------------------------------------

															Brown Combined

															Total sales Kinney owned or Brown-

															Area (pairs) Shoe Store controlled Kinney

															(%) outlets share

															(%)* (%)*

-------------------------------------------------------------------

															Dodge City, Kans. 31,400 23.3 34.4 57.7

															Texas City, Tex. 32,300 27.8 20.7 48.5

															Council Bluffs, Iowa 68,200 27.3 15.4 42.7

															Marshalltown, Iowa 72,600 21.8 13.4 35.2

															Uniontown, Pa. 144,900 16.3 18.8 35.1

															Ardmore, Okla. 62,600 14.4 20.3 34.7

															Keokuk, Iowa 34,600 18.4 14.8 33.2

															Ottumwa, Iowa 67,200 28.2 4.3 32.5

															Pine Bluff, Ark. 63,100 21.6 9.4 31.0

															Lawton, Okla. 95,200 20.2 9.8 30.0

															Borger, Tex. 50,100 15.5 13.8 29.3

															Roswell, N. Mexico 80,900 11.7 15.8 27.5

															Topeka, Kans. 224,000 11.7 15.8 27.5

															Coatesville, Pa. 46,200 17.2 10.0 27.2

															Hobbs, N. Mexico 50,800 22.2 5.0 27.2

															Iowa City, Iowa 72,200 15.3 10.7 26.0

															Dubuque, Iowa 119,000 14.3 11.5 25.8

															Carlisle, Pa. 55,500 17.5 5.9 23.4

															Texarkana, Ark. 65,800 15.9 7.5 23.4

															Fort Dodge, Iowa 104,000 10.8 12.5 23.3

															Steubenville, Ohio 207,200 14.9 8.1 23.0

															Mason City, Iowa 102,400 14.4 8.3 22.7

															Marion, Ohio 91,600 6.7 15.7 22.4

															Pueblo, Colo. 152,400 14.1 7.5 21.6

															Hibbing, Minn. 44,600 18.1 3.4 21.5

															Fargo, N. Dak. 162,800 15.3 6.2 21.5

															Franklin, Pa. 32,100 14.4 7.1 21.5

															Corpus Christi, Tex. 331,500 2.4 19.0 21.4

															Batavia, N. Y. 75,300 13.2 8.1 21.3

															McAllen, Tex. 90,200 13.0 8.3 21.3

															Concord, N. H. 57,300 15.6 4.7 20.3

															Sioux City, Iowa 222,000 7.7 12.3 20.0

															Muskogee, Okla. 68,100 7.6 12.2 19.8

															Rochester, Minn. 130,100 11.2 8.6 19.8

															Bartlesville, Okla. 63,100 15.8 3.9 19.7

															Berwyn, Ill. 95,900 17.8 1.9 19.7

															Clarksburg, W. Va. 134,600 15.5 3.9 19.4

															Davenport, Iowa 230,300 6.4 12.8 19.2

															Freeport, Ill. 88,000 10.7 8.3 19.0

															Grand Forks, N. Dak. 121,100 12.8 6.1 18.9

															Muskegon, Mich. 172,000 4.0 14.9 18.9

															Baton Rouge, La. 398,100 3.8 14.9 18.7

															Des Moines, Iowa 562,800 4.9 13.8 18.7 Page 370 U. S. 348 Springfield, Mo. 210,400 3.7 14.9 18.6

															Laredo, Tex. 166,200 15.3 3.2 18.5

															St. Cloud, Minn. 88,400 9.6 8.9 18.5

															Fort Smith, Ark. 165,200 11.8 6.5 18.3

															Kingsport, Tenn. 106,200 13.0 5.1 18.1

															Gulfport, Miss. 99,700 14.2 3.7 17.9

															Cortland N. Y. 55,300 12.2 5.5 17.7

															Fremont, Nebr. 56,100 11.8 5.6 17.4

															Manitowoc, Wis. 60,800 13.9 3.5 17.4

															Salina, Kans. 102,800 13.8 3.3 17.1

															Muncie, Ind. 158,000 7.9 9.0 16.9

															Portsmouth, Ohio 141,200 9.2 7.2 16.4

															Reading, Pa. 417,200 6.0 10.4 16.4

															Greensburg, Pa. 117,800 8.0 7.9 15.9

															Little Rock, Ark. 468,100 2.7 13.2 15.9

															Flint, Mich. 628,300 2.7 13.1 15.8

															Wichita, Kans. 666,600 7.5 8.3 15.8

															Lubbock, Tex. 305,500 3.9 11.7 15.6

															Kingston, N. Y. 112,100 11.6 3.9 15.5

															Emporia, Kans. 44,300 14.3 0.8 15.1

															Johnson City, Tenn. 75,800 12.0 3.1 15.1

															Odessa, Tex. 167,700 8.1 7.0 15.1

															Bloomington, Ill. 129,600 6.2 8.6 14.8

															Elgin, Ill. 126,900 6.7 8.0 14.7

															Enid, Okla. 140,400 10.7 4.0 14.7

															Burlington, Iowa 74,500 10.7 3.9 14.6

															South Bend, Ind. 434,500 1.6 13.0 14.6

															Galesburg, Ill. 95,600 12.4 2.1 14.5

															Abilene, Tex. 184,300 12.4 2.0 14.4

															Meridian, Miss. 120,000 3.7 10.6 14.3

															Toledo, Ohio 821,800 1.3 12.6 13.9

															Tulsa, Okla. 749,000 7.0 6.9 13.9

															Colorado Springs, Colo. 225,600 7.5 6.1 13.6

															Williamsport, Pa. 153,400 4.1 9.2 13.3

															Mankato, Minn. 99,900 7.9 5.3 13.2

															Green Bay, Wis. 220,000 7.5 5.2 12.7

															Waterloo, Iowa 224,100 10.2 2.3 12.5

															Sioux Falls, S. Dak. 172,000 7.4 4.9 12.3

															Glens Falls, N. Y. 115,300 7.6 4.6 12.2

															Kansas City, Kans. 181,300 8.6 3.6 12.2

															Oklahoma City, Okla. 839,500 1.8 10.4 12.2

															Hutchinson, Kans. 156,400 9.0 2.4 11.4

															Kenosha, Wis. 107,700 7.0 4.3 11.3

															Pottsville, Pa. 147,000 6.0 5.3 11.3

															San Angelo, Tex. 113,800 6.5 4.6 11.1

															Wheeling, W. Va. 311,600 6.9 3.9 10.8

															Ithaca, N. Y. 82,300 5.8 4.7 10.5

															Zanesville, Ohio 138,800 9.0 1.5 10.5

															Mobile, Ala. 473,100 1.0 9.4 10.4 Page 370 U. S. 349 York, Pa. 344,200 5.1 4.9 10.0

															Gary, Ind. 414,400 4.3 5.3 9.6

															Decatur, Ill. 221,800 3.9 5.5 9.4

															Amarillo, Tex. 334,100 5.6 3.2 8.8

															Minneapolis, Minn. 1,909,900 5.3 3.1 8.4

															Forth Worth, Tex. 1,092,100 1.4 6.9 8.3

															Waco, Tex. 170,400 5.4 2.9 8.3

															Altoona, Pa. 241,000 4.8 3.3 8.1

															Lancaster, Pa. 316,400 3.9 4.2 8.1

															Rockford, Ill. 377,400 5.0 3.1 8.1

															Saginaw, Mich. 326,300 2.1 5.6 7.7

															Grand Rapids, Mich. 650,300 5.8 1.6 7.4

															Jacksonville, Fla. 739,200 0.6 6.7 7.3

															Columbus, Ga. 308,300 3.4 3.5 6.9

															Evansville, Ind. 486,600 3.1 3.6 6.7

															St. Paul, Minn. 1,013,200 3.1 3.5 6.6

															Montgomery, Ala. 437,100 1.7 4.7 6.4

															Peoria, Ill. 469,300 3.6 2.8 6.4

															Springfield, Ill. 304,400 5.1 1.3 6.4

															Milwaukee, Wis. 1,984,900 5.9 0.3 6.2

															San Antonio, Tex. 1,476,000 1.0 4.7 5.7

															Cedar Rapids, Iowa 256,600 3.9 1.2 5.1

-------------------------------------------------------------------

															ewm:

															* The percentages in these columns reflect sales of Brown brand
shoes through Brown owned or controlled outlets.[348]

															Source:GX 9, 214, R.60-70, 1223-1227;DX RR, DDDD-1, DDDD-2, R.
3892-4315, 4939-5299, 5300-5652. Page 370 U. S. 350 Page 370 U. S. 351 | 370
U.S. 294 appb| APPENDIX B Sales of children's shoes by Brown and Kinney as a share
of the total city sales in selected areas (1955) bwm:

-------------------------------------------------------------------

															Brown Combined

															Total sales Kinney owned or Brown-

															Area (pairs) Shoe Store controlled Kinney

															(%) outlets share

															(%)* (%)*

-------------------------------------------------------------------

															Coatesville, Pa. 20,900 20.8 31.0 51.8

															Dodge City, Kans. 14,200 35.5 13.5 49.0

															Council Bluffs, Iowa 30,900 36.6 6.5 43.1

															Ardmore, Okla. 28,400 20.7 21.0 41.7

															Pueblo, Colo. 69,100 25.4 15.8 41.2

															Borger, Tex. 22,700 24.8 16.1 40.9

															Berwyn, Ill. 43,500 31.2 3.4 34.6

															Batavia, N. Y. 34,100 14.0 19.3 33.3

															Ottumwa, Iowa 30,500 30.4 2.5 32.9

															Carlisle, Pa. 25,200 21.4 11.3 32.7

															Manitowoc, Wis. 27,600 19.2 12.1 31.3

															Lawton, Okla. 43,200 18.3 12.6 30.9

															Franklin, Pa. 14,500 14.4 14.9 29.3

															Gulfport, Miss. 45,200 24.5 4.5 29.0

															Freemont, Nebr. 25,400 14.3 14.6 28.9

															Bartlesville, Okla. 28,600 20.7 7.8 28.5

															Concord, N. H. 26,000 16.3 11.8 28.1

															Uniontown, Pa. 65,700 18.9 8.3 27.2

															Mashalltown, Iowa 32,900 22.8 4.2 27.0

															Cortland, N. Y. 25,100 13.8 12.4 26.2

															Kingsport, Tenn. 48,100 14.8 10.6 25.4

															McAllen, Tex. 40,000 17.0 7.5 24.5

															Topeka, Kans. 101,600 15.7 7.2 22.9

															Texarkana, Ark. 29,800 19.2 3.6 22.8

															Johnson City, Tenn. 34,300 13.0 9.4 22.4

															Dubuque, Iowa 53,900 17.6 4.5 22.1

															Emporia, Kans. 20,100 14.5 7.4 21.9

															Iowa City, Iowa 32,700 15.8 5.8 21.6

															Muskogee, Okla. 30,900 10.7 10.9 21.6

															Salina, Kans. 46,600 12.5 8.7 21.2

															Mason City, Iowa 46,400 16.8 3.4 20.2

															Enid, Okla. 63,700 12.1 6.9 19.0

															Kingston, N. Y. 50,800 12.8 5.1 17.9

															Rochester, Minn. 59,100 7.5 9.9 17.4

															Ithaca, N. Y. 37,300 5.5 11.8 17.3

															Hutchinson, Kans. 70,900 10.9 6.0 16.9

															Baton Rouge, La. 180,400 8.0 8.6 16.6

															Grand Forks, N. Dak. 54,900 12.7 3.4 16.1

															Sioux City, Iowa 100,600 9.8 5.9 15.7

															Altoona, Pa. 109,300 12.5 2.9 15.4

															Elgin, Ill. 57,500 13.1 2.3 15.4

															Meridian, Miss. 54,400 6.7 8.7 15.4

															Wichita, Kans. 302,200 9.6 5.6 15.2

															Colorado Springs, Colo. 102,300 8.0 7.1 15.1

															Fort Smith, Ark. 74,900 12.1 3.0 15.1

															Fort Dodge, Iowa 47,100 12.5 2.4 14.9

															Zanesville, Ohio 62,900 9.7 4.8 14.5

															Muskegon, Mich. 78,000 7.4 6.6 14.0

															Steubenville, Ohio 93,900 11.4 2.4 13.8

															Tulsa, Okla. 339,500 8.6 5.2 13.8

															Corpus Christi, Tex. 150,300 4.4 8.8 13.2

															Davenport, Iowa 104,400 8.4 4.8 13.2

															Fargo. N. Dak. 73,800 9.0 3.8 12.8

															Wheeling W. Va. 141,200 8.7 4.1 12.8

															Amarillo, Tex. 151,400 8.5 4.2 12.7

															Little Rock, Ark. 212,200 3.0 9.5 12.5

															South Bend, Ind. 197,000 2.9 9.4 12.3

															Greensburg, Pa. 53,400 8.9 3.0 11.9

															Des Moines, Iowa 225,100 6.5 5.1 11.6

															Glens Falls, N. Y. 52,300 10.2 1.2 11.4

															Green Bay, Wis. 99,700 7.3 3.8 11.1

															Decatur, Ill. 100,500 6.3 4.4 10.7

															Fort Worth, Tex. 495,100 3.3 7.4 10.7

															Mobile, Ala. 198,100 4.5 6.2 10.7

															Gary, Ind. 187,800 7.0 3.6 10.6

															Bloomington, Ill. 58,800 6.5 4.0 10.5

															Springfield, Mo. 95,400 3.1 6.5 9.6

															Williamsport, Pa. 69,600 5.0 4.5 9.5

															Waco, Tex. 77,200 6.3 3.2 9.5

															Lubbock, Tex. 138,500 6.4 2.8 9.2

															Pottsville, Pa. 66,600 5.9 3.3 9.2

															Milwaukee, Wis. 899,800 8.3 0.4 8.7

															Lancaster, Pa. 143,400 6.2 2.3 8.5

															Tampa, Fla. 251,600 4.5 4.0 8.5

															Oklahoma City, Okla. 380,600 2.5 5.8 8.3

															Mankato, Minn. 45,300 6.8 1.1 7.9

															Minneapolis, Minn. 865,800 6.7 1.2 7.9

															Peoria, Ill. 212,700 6.7 1.0 7.7

															Columbus, Ga. 139,700 6.4 1.2 7.6

															Reading, Pa. 189,100 4.4 3.1 7.5

															Toledo, Ohio 372,500 1.5 5.3 6.8

															Jacksonville, Fla. 335,100 2.0 4.5 6.5

															Springfield, Ill. 558,500 5.7 0.7 6.4

															Montgomery, Ala. 164,500 3.3 2.9 6.2

															Brownsville, Tex. 100,500 4.3 1.8 6.1

															Saginaw, Mich. 147,900 3.5 2.5 6.0

															St. Paul, Minn. 459,300 2.7 2.5 5.2

															Detroit, Mich. 2,483,900 4.4 0.6 5.0

-------------------------------------------------------------------

															ewm:

															* The percentages in these columns reflect sales of Brown brand
shoes through Brown owned or controlled outlets, with the single
exception of Concord, N.H., in which case they reflect the sale of
Brown brand shoes through all outlets, regardless of ownership or
control, and are, therefore, marginally too high.

															Source: GX 9, 214, R. 60-70, 1219-1222; DX RR,DDDD-1, DDDD-2, R.
3892-4315, 4939-5299, 5300-5652. Page 370 U. S. 352 | 370
U.S. 294 appc| APPENDIX C Sales of men's shoes by Brown and Kinney as a share of
the total city sales in selected areas (1955) bwm:

-------------------------------------------------------------------

															Brown Combined

															Total sales Kinney owned or Brown-

															Area (pairs) Shoe Store controlled Kinney

															(%) outlets share

															(%)* (%)*

-------------------------------------------------------------------

															Dodge City, Kans. 12,000 16.4 8.4 24.8

															Ardmore, Okla. 23,900 8.1 15.5 23.6

															Batavia, N. Y. 28.700 8.9 11.3 20.2

															Lawton, Okla. 36,300 11.3 8.2 19.5

															Borger, Tex. 19,100 11.5 7.8 19.3

															Pueblo, Colo. 58,100 8.6 10.3 18.9

															Carlisle, Pa. 21,200 14.3 4.2 18.5

															Freemont, Nebr. 21,400 8.0 10.4 18.4

															Coatesville, Pa. 17,600 9.3 8.2 17.5

															Manitowoc, Wis. 23,200 10.1 7.3 17.4

															Franklin, Pa. 12,200 10.5 5.3 15.8

															Council Bluffs, Iowa 26,000 14.0 1.1 15.1

															Concord, N. H. 21,900 11.0 3.7 14.7

															Texarkana, Ark. 25,100 12.1 2.6 14.7

															Corpus Christi, Tex. 126,500 2.0 12.3 14.3

															Muskogee, Okla. 26,000 6.5 7.6 14.1

															Emporia, Kans. 16,900 7.8 5.7 13.5

															Kingsport, Tenn. 40,500 7.2 5.9 13.1

															Bartlesville, Okla. 24,100 8.9 4.1 13.0

															Cortland, N. Y. 21,100 7.6 5.2 12.8

															Dubuque, Iowa 45,400 10.2 2.1 12.3

															McAllen, Tex. 34,400 8.4 3.5 11.9

															Berwyn, Ill. 36,600 9.1 2.6 11.7

															Salina, Kans. 39,200 7.2 3.9 11.1

															Kingston, N. Y. 42,800 6.9 3.7 10.6

															Elgin, Ill. 48,400 10.1 0.4 10.5

															Enid, Okla. 53,600 5.9 4.6 10.5

															Uniontown, Pa. 55,300 7.3 2.9 10.2

															Rochester, Minn. 49,600 4.3 5.5 9.8

															Fort Smith, Ark. 63,000 5.2 4.5 9.7

															Topeka, Kans. 85,500 9.0 0.5 9.5

															Hutchinson, Kans. 59,700 5.1 3.7 8.8

															Johnson City, Tenn. 28,900 7.7 1.0 8.7

															Davenport, Iowa 87,900 6.0 1.7 7.7

															Ithaca, N. Y. 31,400 3.5 4.2 7.7

															Zanesville, Ohio 53,000 5.2 2.1 7.3

															Muskegon, Mich. 65,600 5.1 1.7 6.8

															Steubenville, Ohio 79,000 5.7 1.1 6.8

															Springfield, Mo. 80,300 3.6 2.8 6.4 Page 370 U. S. 353 Amarillo, Tex. 127,400 4.6 1.3 5.9

															Asheville, N. C. 80,900 2.9 2.9 5.8

															Green Bay, Wis. 83,900 4.0 1.6 5.6

															Waco, Tex. 65,000 2.6 3.0 5.6

															Greensburg, Pa. 44,900 4.4 1.0 5.4

															Peoria, Ill. 179,000 4.7 0.7 5.4

															Reading, Pa. 159,200 2.7 2.6 5.3

															Wichita, Kans. 254,300 4.3 0.9 5.2

															Colorado Springs, Colo. 86,100 4.4 0.7 5.1

-------------------------------------------------------------------

															ewm:

															* The percentages in these columns reflect sales of Brown brand
shoes through Brown owned or controlled outlets.

															Source: GX 9, 214, R. 60-70, 1219-1222; DX RR,DDDD-1, DDDD-2, R.
3892-4315, 4939-5299, 5300-5652. Page 370 U. S. 354 | 370
U.S. 294 appd| APPENDIX D Comparison of Brown-Kinney percentage of industry shoe
sales for selected cities, and counties or standard metropolitan
areas (Appellant's percentages of 1954 dollar sales adjusted to
include sales of Brown franchise and Wohl plan stores) bwm:

----------------------------------------------------------------------

															County or SMA percenttage{2}

															------------------------------------

															City City per-

															centage{1}

															Name SMA County

----------------------------------------------------------------------

															Texas City, Tex. 35.8 Galveston, Tex. 12.2

															Coatesville, Pa. 32.9 Philadelphia, Pa. 1.9

															Ottumwa, Iowa 27.3 Wapello County 26.5

															Uniontown, Pa. 27.2 Fayette County 12.4

															Texarkana, Ark. 25.3 Miller County 23.9

															Marshalltown, Iowa 24.9 Marshall County 22.6

															Council Bluffs, Iowa 24.2 Omaha, Nebr. 7.9

															Corpus Christi, Tex. 24.0 Corpus Christi, Tex. 22.6

															Ardmore, Okla. 23.4 Carter County 20.4

															Iowa City, Iowa 18.9 Johnson County 16.6

															Muskogee, Okla. 17.7 Muskogee County 16.5

															Steubenville, Ohio 17.5 Wheeling Steubenville 8.7

															Grand Forks, N. Dak. 17.1 Grand Forks County 14.4

															Mason City, Iowa 16.6 Cerro Gordo County 15.6

															Topeka, Kans. 16.4 Topeka, Kans. 16.1

															Baton Rouge, La. 16.0 Baton Rouge, La. 15.9

															Rochester, Minn. 15.9 Rochester, Minn. 15.4

															Dubuque, Iowa 15.4 Dubuque, Iowa 13.9

															Fort Smith, Ark. 15.4 Fort Smith, Ark. 14.7

															Little Rock, Ark. 15.2 Little Rock & North

															Little Rock, Ark. 13.2

															Fort Dodge, Iowa 14.8 Webster County 14.3

															Springfield, Mo. 14.3 Springfield, Mo. 13.3

															Berwyn, Ill. 14.1 Chicago, Ill. 2.5

															Davenport, Iowa 14.1 Davenport, Moline,

															Rock Island 12.2

															Fargo, N. Dak. 13.9 Cass County 13.5

															Altoona, Pa. 13.1 Altoona, Pa. 10.6

															Muskegon, Mich. 13.1 Muskegon County 12.0

															Reading, Pa. 12.2 Reading, Pa. 10.7

															South Bend, Ind. 11.9 South Bend, Ind. 11.1

															Greensburg, Pa. 11.3 Pittsburgh, Pa. 2.5

															Bloomington, Ill. 11.0 McLean County 9.8

															Kansas City, Kans. 10.7 Kansas City, Mo. 3.1

															Colorado Springs, Colo. 10.6 El Paso County 10.5

															Elgin, Ill. 10.5 Chicago, Ill. 2.5

															Oklahoma City, Okla. 10.0 Oklahoma City, Okla. 10.1

----------------------------------------------------------------------

															ewm:

															1. Based on dollar values from DXDDDD 1, DDDD 2, NNNN, UUUUUU,
R.4939 5299, R.5300 5652, 5780 5818, 7155 7313, GX 241D, R.2014
2365.

															2. Total area dollar estimates of footwear sales from GX 242,
R.2807 2819, and DX UUUUUU, R. 7155 7313. Area dollar sales of
footwear by Brown and Kinney owned or controlled outlets from DDDD
1, DDDD 2, NNNN, UUUUU, R.4939 5299,5300 5652,5780 5818, 7155 7313;
GX241D, R.2014 2365. Page 370 U. S. 355 MR. JUSTICE CLARK, concurring.

															I agree that, so long as the Expediting Act, 15 U.S.C. § 29, is
on the books, we have no alternative but to accept jurisdiction in
this case. The Act declares that appeals in civil antitrust cases
in which the United States is complainant lie only to this Court.
It thus deprives the parties of an intermediate appeal, and this
Court of the benefit of consideration by a Court of Appeals. Under
our system, a party should be entitled to at least one appellate
review, and, since the sole opportunity in cases under the
Expediting Act is in this Court, we usually note jurisdiction. A
fair consideration of the issues requires us to carry out the
function of a Court of Appeals by examining the whole record and
resolving all questions, whether or not they are substantial. This
is a great burden on the Court, and seldom results in much
expedition, as in this case where 2 1/2 years have passed since the
District Court's decision.

															On the merits, the case presents the question of whether, under
§ 7 of the Clayton Act, the acquisition by Brown of the Kinney
retail stores may substantially lessen competition in shoes on a
national basis or in any section of the country. * To me, § 7 is
definite and clear. It prohibits acquisitions, either of stock or
assets, where competition in any line of commerce in any section of
the country may be substantially lessened. The test, as stated in
the Senate Report on the bill, is whether there is "a reasonable
probability" that competition may be lessened.

															An analysis of the record indicates (1) that Brown, which makes
all types of shoes, is the fourth largest manufacturer in the
country; (2) that Kinney likewise manufacturers some shoes, but
deals primarily in retailing, having almost 400 stores that handle
a substantial volume Page 370 U. S. 356 of sales; (3) that its acquisition would give Brown a total of
some 1,600 retail outlets, making it the second largest retailer in
the Nation; (4) that Kinney's stores are, on both a national and
local basis, strategically placed from a retail market standpoint
in suburban areas or towns of over 10,000 population; (5) that
Kinney's suppliers are small shoe manufacturers; (6) that Brown's
earlier acquisitions, seven in number in five years, indicate a
pattern to increase the sale of Brown shoes through the acquisition
of independent outlets, resulting in the loss of sales by small
competing manufacturers; (7) that statistics on these outlets
indicate that Brown, after acquisition, has materially increased
its shipments of Brown shoes to them, some as much as 50%; and (8)
that the acquisition would have a direct effect on the small
manufacturers who previously enjoyed the Kinney requirements
market.

															It would appear that the relevant line of commerce would be
shoes of all types. This is emphasized by the nature of Brown's
manufacturing activity and its plan to integrate the Kinney stores
into its operations. The competition affected thereby would be in
the line handled by these stores, which is the full line of shoes
manufactured by Brown. This conclusion is more in keeping with the
record, as I read i,t and, at the same time, avoids the charge of
splintering the product line. Likewise, the location of the Kinney
stores points more to a national market in shoes than a number of
regional markets staked by artificial municipal boundaries. Brown's
business is on a national scale, and its policy of integration of
manufacturing and retailing is on that basis. I would conclude,
therefore, that it would be more reasonable to define the line of
commerce as shoes those sold in the ordinary retail store, and the
market as the entire country. Page 370 U. S. 357 On this record, but one conclusion can follow, i.e., that the acquisition by Brown of the 400 Kinney stores for the
purposes of integrating their operation into its manufacturing
activity created a "reasonable probability" that competition in the
manufacture and sale of shoes on a national basis might be
substantially lessened. I would therefore affirm.

															* Since the judgment below can be supported on this theory,
there is no need to inquire into any tendency to create a
monopoly.

															MR. JUSTICE HARLAN, dissenting in part and concurring in
part.

															I would dismiss this appeal for lack of jurisdiction, believing
that the case in its present posture is prematurely here because
the judgment sought to be reviewed is not yet final. Since the
Court, however, holds that the case is properly before us, I
consider it appropriate, after noting my dissent to this holding,
to express my views on the merits, because the issues are of great
importance. On that aspect, I concur in the judgment of the Court,
but do not join its opinion, which I consider to go far beyond what
is necessary to decide the case. JURISDICTION. The Court's authority to entertain this appeal depends on § 2 of
the Expediting Act of 1903. That statute, in its present form,
provides (15 U.S.C. § 29):

															"In every civil action brought in any district court of the
United States under any of said [antitrust] Acts, wherein the
United States is complainant, an appeal from the final judgment of
the district court will lie only to the Supreme
Court."

															(Emphasis added.)

															The Act was passed by a Congress which thereby "sought . . . to
insure speedy disposition of suits in equity brought by the United
States under the Antitrust Page 370 U. S. 358 Act." United States v. California Cooperative
Canneries, 279 U. S. 553 , 279 U. S. 558 .
This major policy consideration emerges clearly from the otherwise
meager legislative history of the Act. See H.R.Rep.
No.3020, 57th Cong., 2d Sess. (1903); 36 Cong.Rec. 1679, 1744,
1747. It was in keeping with this purpose that

															"Congress limited the right of review to an appeal from the
decree which disposed of all matters . . . and . . . precluded the
possibility of an appeal to either (the Supreme Court or the Court
of Appeals) . . . from an interlocutory decree." United States v. California Cooperative Canneries,
supra. For it was entirely consistent with its desire to
expedite these cases for Congress to have eliminated the
time-consuming delays occasioned by interlocutory appeals either to
intermediate courts or to this Court.

															By taking jurisdiction over this appeal at the present time,
despite the fact that, even if affirmed, this case would doubtless
reappear on the Court's docket if the terms of the District Court's
divestiture decree are unsatisfactory to the appellant or to the
Government, the Court is paving the way for dual appeals in all
government antitrust cases where intricate divestiture judgments
are involved. Whether or not such a procedure is advisable from the
standpoint of judicial administration or practical business
considerations -- and I think such questions by no means free from
doubt -- I believe that it is contrary to the provisions and
purposes of the Expediting Act, and that the construction now given
the Act does violence to the accepted meaning of "final judgment"
in the federal judicial system.

															The judgment from which this appeal is taken directs the
appellant to "relinquish and dispose of the stock, share capital
and assets" of the G. R. Kinney Company, and enjoins further
interlocking interests between the two corporations. It does not
specify how the divestiture is to be carried out, but directs
appellant to file "a proposed Page 370 U. S. 359 plan to carry into effect the divestiture order," and grants to
Government 30 days following such filing in which to submit
"oppositions or suggestions thereto." When considered in light of
the District Court's opinion, this reservation emerges as much more
than a mere retention of jurisdiction for the purpose of
ministerially executing a definite and precise final judgment. See, e.g., 7 U. S. Law, 3
Cranch 179; French v.
Shoemaker , 12 Wall. 86, 79 U. S. 98 . In
light of this Court's remarks in United States v. E.I. du Pont
de Nemours & Co., 353 U. S. 586 , 353 U. S.
607 -608, the District Court concluded that the
particular form which the divestiture order was to take was a
matter which "could have far-reaching effects and consequences," 179 F.
Supp. 721 , at 741, and that it would be appropriate for the
court to conduct hearings on the manner in which the Kinney stock
ought to be disposed of by the appellant. Hence, it is not
far-fetched to assume that particular terms of the remedy ordered
by the District Court will be contested, and that this Court may
well be asked to examine the details relating to the anticipated
divestiture. E.g., United States v. E.I. du Pont de Nemours
& Co., 366 U. S. 316 .

															The exacting obligation with respect to the terms of antitrust
decrees cast upon this Court by the Expediting Act was commented
upon only last Term. In United States v. E.I. du Pont de
Nemours & Co., 366 U. S. 316 , it
was noted that it was the Court's practice,

															"particularly in cases of a direct appeal from the decree of a
single judge, . . . to examine the District Court's action closely
to satisfy ourselves that the relief is effective to redress the
antitrust violation proved."

															366 U.S. at 366 U. S. 323 ; see International Boxing Club of New York, Inc. v. United
States, 358 U. S. 242 , 358 U. S. 253 .
In the present case, the Court and the parties know nothing more of
"this most significant phase of the case," United States v.
United States Gypsum Co., 340 U. S. 76 , 340 U. S. 89 ,
than that Brown will generally be Page 370 U. S. 360 required to divest itself of any interest in Kinney. Exactly how
this separation is to be accomplished has not yet been determined,
and there is no way of knowing now whether both parties to the suit
will find the decree satisfactory, or whether one or both will seek
further review in this Court.

															Despite the opportunity thus created for separate reviews of
these kinds of cases at their "merits" and "relief" stages, the
Court holds that the judgment now in effect has "sufficient indicia
of finality" ( ante, p. 370 U.S. 308 ) to render it appealable
now, notwithstanding that the terms of the ordered divestiture have
not yet been fixed. This conclusion is based upon three discrete
considerations, none of which, in my opinion, serves to overcome
the "final judgment" requirement of the Expediting Act, as that
term has hitherto been understood in federal law. [ Footnote 2/1 ] First. The Court suggests that any further proceedings
to be conducted in the District Court are "sufficiently independent
of, and subordinate to, the issues presented by this appeal" to
permit them to be considered and reviewed separately. But this
judicially created exception to the embracing principle of finality
has never heretofore been utilized by this Court to permit separate
review of a District Court's decision on the underlying merits of a
claim when the details of the relief that is to be awarded are yet
uncertain. The present case does not present the possibility, as
did Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541 , and Forgay v.
Conrad , 6 How. 201, that a delay in appellate
review would result in irreparable Page 370 U. S. 361 harm, equivalent in effect to a denial of any review on the
point at issue. See 337 U.S. at 337 U. S. 546 ;
6 How. at 47 U. S. 204 .
Nor is this a case in which the complaint's prayers for relief are
so diversified that the resolution of one branch of the case "is
independent of, and unaffected by, another litigation with which it
happens to be entangled." Radio Station WOW, Inc. v.
Johnson, 326 U. S. 120 , 326 U. S. 126 ; see Carondelet Canal & Navigation Co. v. Louisiana, 233 U. S. 362 , 233 U. S.
372 -373; Forgay v. Conrad, supra. If the appellant were compelled to await the entry of a
particularized divestiture order before being granted appellate
review, it would suffer no irremediable loss; indeed, in this case,
the merger was allowed to proceed pendente lite, so any
delay, to the extent that it could affect the parties, would
benefit the appellant. Nor can it well be suggested that the
particular conditions under which the divestiture is to be executed
are matters that are only fortuitously "entangled" with the merits
of the complaint. Despite the seemingly mandatory tone of the
"divestiture" judgment now before us, the plain fact remains that
it is, by its own terms, inoperative to a substantial
extent until further proceedings are held in the District Court.
Unlike the cases relied upon by the Court, therefore, this case
comes up on appeal before the appellant knows exactly what it has
been ordered to do or not to do. This is surely not the type of
judgment "which ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment." Catlin
v. United States, 324 U. S. 229 , 324 U. S. 233 ; see Covington v. Covington First National Bank, 185 U. S. 270 , 185 U. S.
277 . Second. The Court finds significant the "character of
the decree still to be entered in this suit." Ante, p. 370 U. S. 309 .
Since the order of full divestiture requires "careful, and often
extended, negotiation and formulation," ante, p. 370 U. S. 309 ,
it is suggested that a delay in carrying out its terms might render
them impractical or unenforceable. Apart Page 370 U. S. 362 from the fact that this policy consideration is more
appropriately addressed to the Congress than to this Court, it
appears to me to call for a result directly contrary to that
reached by the Court. For, if the terms of the divestiture are
indeed so difficult to formulate and so interrelated with market
conditions, it is most unlikely that the decree to be issued by the
District Court will turn out to be satisfactory to both parties.
Consequently, on the Courts' own reasoning, a second appearance of
this case on our docket is not an imaginative possibility, but a
reasonable likelihood. In stating that the divestiture portion of
this judgment "is disputed here on an all or nothing' basis,"
and that "it is ripe for review now, and will, thereafter, be
foreclosed," ante, p. 370 U. S. 309 ,
the Court can hardly mean that either the appellant or the
Government will be precluded from seeking review of the divestiture
terms if it deems them unsatisfactory. Indeed, neither side on this
appeal has addressed itself to the propriety of the divestiture
remedy, as such, that is independently of the question whether the
merger itself runs afoul of the Clayton Act. Moreover, if it is delay between formulation of the decree and
its execution that is thought to be damaging, what reason is there
to believe that this delay or its hazards will be any greater if
the entire case is brought up here once than if review is
separately sought from the divestiture decree, once its terms have
been settled? Nor can it be maintained that, if the merits are now
affirmed, then an appeal on the question of relief is improbable.
For, insofar as complex "negotiation and formulation" is a factor,
the probability of an appeal is equally likely in either
instance. Third. The Court's final reason for holding this
judgment appealable is that similar judgments have often been
reviewed here in the past, with no issue ever having been raised
regarding jurisdiction. But the cases are Page 370 U. S. 363 legion which have echoed the answer given by Chief Justice
Marshall to a contention that the Court was bound on a
jurisdictional point by its consideration on the merits of a case
in which the jurisdictional question had gone unnoticed:

															"No question was made, in that case, as to the jurisdiction. It
passed sub silentio, and the court does not consider
itself as bound by that case." United States v.
More , 3 Cranch 159, 7 U. S. 172 ; see Snow v. United States, 118 U.
S. 346 , 118 U. S. 354 ; Cross v. Burke, 146 U. S. 82 , 146 U. S. 87 ; Louisville Trust Co. v. Knott, 191 U.
S. 225 , 191 U. S. 236 ; New v. Oklahoma, 195 U. S. 252 , 195 U. S. 256 ; United States ex rel. Arant v. Lane, 245 U.
S. 166 , 245 U. S. 170 ; Stainback v. Mo Hock Ke Lok Po, 336 U.
S. 368 , 336 U. S. 379 ; United States v. L. A. Tucker Truck Lines, 344 U. S.
33 , 344 U. S. 38 .
The fact that the Court may, in the past, have overlooked the lack
of finality in some of the judgments that came here for review in
similar posture to this one does not now free it from the
requirements of the Expediting Act. Nor does the fact that none of
the cases reviewed in what now appears to have been an
interlocutory stage was ever appealed again justify disregard of
the statute. This history might point to the desirability of an
amendment to the Expediting Act, but it does not make into a "final
judgment" a decree which reserves for future determination the
terms of the precise relief to be afforded.

															The Court suggests that a "pragmatic approach" to finality is
called for in light of the policies of the Federal Rules of Civil
Procedure, which direct the "just, speedy, and inexpensive
determination of every action." Ante, p. 370 U. S. 306 .
But this misconceives the nature of the issue that is presented.
Whether this judgment is final and appealable is not a question
turning on the Federal Rules of Civil Procedure or on any balance
of policies by this Court. Congress has seen fit to make this
Court, for reasons which are less than obvious, the sole appellate
tribunal for civil antitrust suits instituted by the United Page 370 U. S. 364 States. In so doing, it has chosen to limit this Court's
reviewing power to "final judgments." Whether the first of these
legislative determinations, made in 1903, when appeal as of right
to this Court was the rule, rather than the exception, should
survive the expansion in the Court's docket and the development,
pursuant to the Judiciary Act of 1925, of this Court's
discretionary certiorari jurisdiction, may never have been given
adequate consideration by the Congress. [ Footnote 2/2 ]

															At this period of mounting dockets, there is certainly much to
be said in favor of relieving this Court of the often arduous task
of searching through voluminous trial testimony any exhibits to
determine whether a single district judge's findings of fact are
supportable. The legal issues in most civil antitrust cases are no
longer so novel or unsettled as to make them especially appropriate
for initial appellate consideration by this Court, as compared with
those in a variety of other areas of federal law. And, under modern
conditions, it may well be doubted whether direct review of such
cases by this Court truly serves the purpose of expedition which
underlay the original passage of the Expediting Act. I venture to
predict that a critical reappraisal of the problem would lead to
the conclusion that "expedition" and also, over-all, more
satisfactory appellate review would be achieved in Page 370 U. S. 365 these cases were primary appellate jurisdiction returned to the
Court of Appeals, leaving this Court free to exercise its
certiorari power with respect to particular cases deemed deserving
of further review. As things now stand, this Court must deal with
all government civil antitrust cases, often either at the
unnecessary expenditure of its own time or at the risk of
inadequate appellate review if a summary disposition of the appeal
is made. Further, such a jurisdictional change would bid fair to
satisfy the very "policy" arguments suggested by the Court in this
case. For the Courts of Appeals, whose dockets are generally less
crowded than those of this Court, would then be authorized to hear
appeals from orders such as the one here in question. Since this
order grants an injunction against interlocking interests between
Brown and Kinney, it would come within 28 U.S.C. § 1292(a)(1) were
this not a case "where a direct review may be had in the Supreme
Court."

															So long, however, as the present Expediting Act continues to
commend itself to Congress, this Court is bound by its limitations,
and since, for the reasons already given, the decree appealed
cannot, in my opinion, be properly considered a "final judgment," I
think the appeal, at this juncture, should have been dismissed. THE MERITS. Since the Court nonetheless holds that the judgment is
appealable in its present form, and since the underlying questions
are far-reaching, I consider it a duty to express my view on the
merits. On this aspect of the case, I join the disposition which
affirms the judgment of the District Court, though I am not
prepared to subscribe to all that is said or implied in the opinion
of this Court.

															The question presented by this case can be stated in narrow and
concise terms: are the District Court's conclusions that the effect
of the Brown-Kinney merger may Page 370 U. S. 366 be, in the language of § 7 of the Clayton Act, "substantially to
lessen competition, or to tend to create a monopoly" in "any line
of commerce in any section of the country" sustainable? In other
words, does the indefinite and general language in § 7 manifest a
congressional purpose to proscribe a combination of this sort?
Brown contends that, in finding the merger illegal, the District
Court lumped together what are in fact discrete "lines of
commerce," that it failed to define an appropriate "section of the
country," and that, when the case is properly viewed, any lessening
of competition that may be caused by the merger is not
"substantial." For reasons stated below, I think that each of these
contentions is untenable.

															The dispositive considerations are, I think, found in the
"vertical" effects of the merger -- that is, the effects reasonably
to be foreseen from combining Brown's manufacturing facilities with
Kinney's retail outlets. In my opinion, the District Court's
conclusions as to such effects are supported by the record, and
suffice to condemn the merger under § 7 without regard to what
might be deemed to be the "horizontal" effects of the
transaction.

															1. " Line of Commerce. " In considering both the
horizontal and vertical aspects of this merger, the District Court
analyzed the probable impact on competition in terms of three
relevant "lines of commerce" men's shoes, women's shoes, and
children's shoes. It rejected Brown's claim that shoes of different
construction or of different price range constituted distinct lines
of commerce. Whatever merit there might be to Brown's contention
that the product market should be more narrowly defined when it is
viewed from the vantage point of the ultimate consumer (whose
pocketbook, for example, may limit his purchase to a definite price
range), the same is surely not true of the shoe manufacturer.
Although the record contains evidence tending to prove that a shoe
manufacturing Page 370 U. S. 367 plant may be managed more economically if its production is
limited to only one type and grade of shoe, the history of Brown's
own factories reveals that a single plant may be used in successive
years, or even at the same time, for the manufacture of varying
grades of shoes, and may, without undue difficulty, be shifted from
the production of children's shoes to men's or women's shoes, or
vice versa.

															Because of this flexibility of manufacture, the product market
with respect to the merger between Brown's manufacturing facilities
and Kinney's retail outlets might more accurately be defined as the
complete wearing apparel shoe market, combining in one the three
components which the District Court treated as separate lines of
commerce. Such an analysis, taking into account the
interchangeability of production, would seem a more realistic gauge
of the possible anticompetitive effects in the shoe manufacturing
industry of a merger between a shoe manufacturer and a retailer
than the District Court's compartmentalization in terms of the
buying public. For if a manufacturer of women's shoes is able,
albeit at some expense, to convert his plant to the production of
men's shoes, the possibility of such a shift should be considered
in deciding whether the market for either men's shoes or women's
shoes can be monopolized or whether a particular merger
substantially lessens competition among manufacturers of either
product. See Adelman, Economic Aspects of the Bethlehem Opinion, 45 Va.L.Rev. 684, 689 691; cf.
United States v. Columbia Steel Co., 334 U.
S. 495 , 334 U. S.
510 -511; but see United States v. Bethlehem Steel
Corp., 168 F.
Supp. 576 . 592.

															The fact that § 7 speaks of the lessening of competition "in any line of commerce" (emphasis added) does not, of
course, mean that the product market on which the effect of the
merger is considered may be defined as narrowly Page 370 U. S. 368 or as broadly as the Government chooses to define it. [ Footnote 2/3 ] The duty rests with the
District Court, and ultimately with this Court, to determine what
is the appropriate market on an appraisal of the relevant economic
considerations. Discovering the product market is "a necessary
predicate to a finding of a violation of the Clayton Act," United States v. E.I. du Pont de Nemours & Co., 353 U. S. 586 , 353 U. S. 593 ,
and the breadth of the statutory language provides no license for
an abdication of this necessary function. In light of the
production flexibility demonstrated by the undisputed facts in this
case, I think the line of commerce by which the vertical aspects of
the Brown-Kinney merger should be judged is the wearing apparel
shoe industry generally.

															2. " Section of the Country. " This merger involves
nationwide concerns which sell and purchase shoes in various
localities throughout the country, so that it appears that the most
suitable geographical market for appraising the alleged
anticompetitive effects of the vertical combination is the Nation
as a whole. This finding of the District Court (limited to the
vertical aspect of the merger) is not contested by Brown, and is
properly accepted here. One caveat is in order, however. In judging
the anticompetitive effect of the merger on the national market, it
must be recognized that any decline in competition that might
result need not have a uniform effect throughout the entire
country. It is sufficient if Page 370 U. S. 369 the record proves that as a result of the merger competition
will generally be lessened, though its most serious impact may be
felt in certain localities.

															3. " Substantially to Lessen Competition. " The remaining
question is whether the merger of Brown's manufacturing facilities
with Kinney's retail outlets "may . . . substantially lessen
competition" or "tend to create a monopoly" in the nationwide
market in which shoe manufacturers sell to shoe retailers. The
findings of the District Court, supported by the evidence, when
taken together with undisputed facts appearing in the record,
justify the conclusion that a substantial lessening of competition
in the relevant market is a "reasonable probability." S.Rep. No.
1775, 81st Cong., 2d Sess. 6 (1950).

															On the date of the merger, Kinney's retail stores numbered 352,
and this figure had increased to more than 400 by the time of the
trial. Nearly all these stores sell men's, women's, and children's
shoes and are located in the downtown areas of cities of at least
10,000 population. In 116 of these cities, Kinney's combined
pairage sale of shoes for 1955 exceeded 10% of all shoes sold in
the city during the year. Its total retail shoe sales during the
year constituted 1.2% of the national total in terms of dollar
volume and 1.6% in terms of pairage. Of these shoes, only 20% were
supplied by the Kinney manufacturing plants, the remainder coming
from some 197 other sources. [ Footnote
2/4 ]

															Prior to 1955 Kinney had bought none of its outside-source shoes
from Brown, and its records for 1955 reveal that the year's
purchases were made from a diverse number of independent shoe
manufacturers. There were 66 suppliers (including Brown) in that
year each of whose total sales to Kinney exceeded $50,000 and only
three of Page 370 U. S. 370 these (Brown, Endicott-Johnson Co., and Georgia Shoe
Manufacturing Co.) were large companies whose output placed them
among the 25 most productive nonrubber shoe manufacturers in the
United States. Consequently, it appears that Kinney was a
substantial purchaser of the shoes produced by many small
independent shoe manufacturers throughout the country. In fact, the
record affirmatively shows that at least five of Kinney's
suppliers, three of which are located in the State of New York, one
in Pennsylvania, and one in New Hampshire, each relied upon Kinney
to purchase more than 40% of its total production in 1955.

															That the merger between Brown's shoe production plants and
Kinney's retail outlets will tend to foreclose some of the large
market which smaller shoe manufacturers found in sales to Kinney
hardly seems open to doubt. This conclusion is supported by the
following facts which emerge indisputably from the record: (1) In
the shoe industry, as in many others, the purchase of a retail
chain by a manufacturer results in an increased flow of the
purchasing manufacturer's shoes to the retail store. Hence
independent shoe manufacturers find it more difficult to sell their
shoes to an acquired retail chain than to an independent one. (2)
The result of Brown's earlier acquisition of two retail chains was,
in each instance, a substantial increase in the quantity of Brown
shoe purchases by the previously independent chains. [ Footnote 2/5 ] Page 370 U. S. 371 (3) The history of many of Brown's plants proves that they may
be readily adapted to the production of the grade and style of
shoes customarily sold in Kinney stores. [ Footnote 2/6 ] (4) Although Brown supplied none of
Kinney's requirements before the merger, it was supplying almost 8%
of these requirements just two years thereafter.

															The dollar volume of Kinney's outside shoe purchases in 1955 was
between 16 and 17 million dollars, and this amount had increased to
19.4 million by 1957. While Kinney was making only about 1.2% of
the total retail dollar sales in the United States in 1955, that
percentage can hardly be deemed an accurate reflection of its
proportion of nationwide shoe purchases by retailers, since the
retail sales figure is based on a computation that includes all
retail stores, whether or not they were vertically integrated or
otherwise affiliated. In terms of available markets for independent
shoe manufacturers, the percentage of Kinney's purchases must have
been substantially larger, though the precise figure is unavailable
on the record before us. [ Footnote
2/7 ]

															If the controlling test were, as it may be under the similar
language of § 3 of the Clayton Act, one of "quantitative Page 370 U. S. 372 substantiality," compare Standard Oil Co. v. United
States, 337 U. S. 293 , with Tampa Electric Co. v. Nashville Coal Co., 365 U. S. 320 , the
probable foreclosure of independent manufacturers from this
substantial share of the available retail shoe market would be
enough to render the vertical aspect of this merger unlawful under
§ 7. But since the merger can be shown to have an injurious effect
on competition among manufacturers and among retailers, it is
unnecessary to consider whether the Standard Stations formula is
applicable.

															The vertical affiliation between this shoe manufacturer and a
primarily retail organization is surely not, as the dissenters
thought the contractual tie in Standard Stations to be, "a
device for waging competition," rather than "a device for
suppressing competition." 337 U.S. at 337 U. S. 323 .
Since Brown is able by reason of this merger to turn an independent
purchaser into a captive market for its shoes, it inevitably
diminishes the available market for which shoe manufacturers
compete. If Brown shoes replace those which had been previously
produced by others, the displaced manufacturers have no choice but
to enter some other market or go out of business. Since all
manufacturers, including Brown, had competed for Kinney's patronage
when it was unaffiliated, Brown's merger with Kinney potentially
withdraws a share of the market previously available to the
independent shoe manufacturers.

															Not only may this merger, judged from a vertical standpoint,
affect manufacturers who compete with Brown; it may also adversely
affect competition on the retailing level. With a large
manufacturer such as Brown behind it, the Kinney chain would have a
great competitive advantage over the retail stores with which it
vies for consumer patronage. As a manufacturer-owned outlet, the
Kinney store would doubtless be able to sell its shoes at a Page 370 U. S. 373 lower profit margin and outlast an independent competitor. The
merger would also effectively prevent the retail competitor from
dealing in Brown shoes, since these might be offered at lower
prices in Kinney stores than elsewhere. [ Footnote 2/8 ]

															Brown contends that even if these anticompetitive effects are
probable, they touch upon an insignificant share of the market, and
are not, therefore, "substantial" within the meaning of § 7. Our
decision in Tampa Electric Co. v. Nashville Coal Co., 365 U. S. 320 , is
cited as authority for the proposition that a foreclosure of about
1% of the relevant market is necessarily insubstantial. But the
opinion in Tampa Electric carefully noted that
"substantiality in a given case" depends on a variety of factors.
365 U.S. at 365 U. S. 329 .
Two of the considerations that were mentioned were "the relative
strength of the parties" and "the probable immediate and future
effects which preemption of that share of the market might have on
effective competition therein." Ibid. When, as here, the
foreclosure of what may be considered a small percentage of
retailers' purchases may be caused by the combination of the
country's third largest seller of shoes with the country's largest
family style shoe store chain, and when the volume of the latter's
purchases from independent manufacturers is various part of the
country is large enough to render it probable that these suppliers,
if displaced, will have to fall by the wayside, it cannot, in my
opinion, be said that the effect on the shoe industry is "remote"
or "insubstantial."

															I reach this result without considering the findings of the
District Court respecting the trend in the shoe industry towards
"oligopoly" and vertical integration. The Page 370 U. S. 374 statistics in the record fall short of convincing me that any
such trend exists. [ Footnote 2/9 ] I
consider the District Court's judgment warranted apart from these
findings.

															Accordingly, bowing to the Court's decision that the case is
properly before us, I join the judgment of affirmance.

															[ Footnote 2/1 ]

															"A final judgment is one which disposes of the whole subject,
gives all the relief that was contemplated, provides with
reasonable completeness for giving effect to the judgment, and
leaves nothing to be done in the cause save to superintend,
ministerially, the execution of the decree." City of Louisa v. Levi, 140 F.2d 512, 514. See,
e.g., Grant v. Phoenix Mutual Life Ins. Co., 106 U.
S. 429 ; Taylor v. Board of Education, 288 F.2d
600.

															[ Footnote 2/2 ]

															For example, the report which accompanied the 1925 Act to the
floor of the Senate said of the cases in which direct appeal from a
District Court to the Supreme Court was retained:

															"As is well known, there are certain cases which, under the
present law, may be taken directly from the district court to the
Supreme Court. Without entering into a description of these four
classes of cases, it is sufficient to say that, under the existing
law, these are cases which must be heard by three judges, one of whom is a circuit judge."

															S.Rep. No.362, 68th Cong., 1st Sess. 3 (1924). (Emphasis added.)
This generalization was obviously erroneous, since the Expediting
Act provided for direct review in this Court of government
antitrust cases decided by a single district judge.

															[ Footnote 2/3 ]

															As the Court noted in United States v. E.I. du Pont de
Nemours & Co., 351 U. S. 377 , 351 U. S.
393 ,

															"one can theorize that we have monopolistic competition in every
nonstandardized commodity with each manufacturer having power over
the price and production of his own product."

															If the Government were permitted to choose its "line of
commerce," it could presumably draw the market narrowly in a case
that turns on the existence vel non of monopoly power and
draw it broadly when the question is whether both parties to a
merger are within the same competitive market.

															[ Footnote 2/4 ]

															The schedule in the record of Kinney's outside shoe suppliers
for the calendar year 1955 lists 319 vendors, but 122 of these
supplied less than $1,000 worth of goods during the year.

															[ Footnote 2/5 ]

															In 1951, Brown purchased the Wohl Shoe Company, which operated
leased shoe departments in department stores throughout the
country. Before its acquisition of Wohl, Brown had supplied 12.8%
of Wohl's shoe requirements; by 1957, it was supplying 33.6% of
Wohl's needs.

															In 1953, Brown purchased a partial interest in a small chain of
retail stores in Los Angeles known as Wetherby-Kayser. Before this
purchase, Brown had supplied 10.4% of Wetherby's shoes; within one
year, this percentage increased to almost 50%.

															[ Footnote 2/6 ]

															In addition, it appears from the record that, shortly after the
merger was effected, Kinney abandoned its earlier policy of selling
only Kinney-brand shoes (80% of which were "made up" for it by its
manufacturers) and began selling a considerable number of Brown's
branded and advertised shoes. Along with the indications in the
record that Kinney was beginning also to sell higher-priced shoes
in its suburban outlets, this suggests that Brown could supply much
of Kinney's needs with only a minimal additional capital
investment.

															[ Footnote 2/7 ]

															The existence of such gaps in the record make a fair assessment
of the effects of this merger more difficult than it would
otherwise be. One of the reasons why I would not consider the
horizontal aspect of this merger is my conviction that the data
supplied by the Government is entirely inadequate for a proper
evaluation of the impact of the horizontal merger on
competition.

															[ Footnote 2/8 ]

															The change in Kinney policy whereby it now carries shoes bearing
the Brown brand ( see 370
U.S. 294 fn2/6|>note 6, supra ) tends to make
retailer competition still more difficult.

															[ Footnote 2/9 ]

															In terms of bare numbers, the quantity of retail outlets owned
or controlled by the major manufacturers has undoubtedly been
increasing since 1947. But much of the data in the record is
incomplete in this regard because it is based on varying standards.
Thus, while the Government argues that the increase in percentage
of national retail sales by shoe chains owning 101 or more outlets
from 20.9% in 1948 to 25.5% in 1954 proves the trend toward
"oligopoly," the appellant's statistics, founded upon retail sales
by all outlets (including general merchandise and clothing stores),
show that retail sales by chains of 11 or more stood at a constant
19.5% of national dollar volume in both 1948 and 1954. Moreover,
the apparent decline in the proportional share of the country's
shoe needs supplied by the largest manufacturers between 1947 and
1955 belies any claim that shoe production is becoming
"oligopolistic." Whereas the largest four manufacturers supplied
25.9% of the Nation's needs in 1947, the largest eight supplied
31.4%, and the largest 15 supplied 36.2%, in 1955 the equivalent
percentages were 22%, 27%, and 32.5%.

															There is no suggestion in the record as to whether earlier
purchases of retail chains by shoe manufacturers reduced the number
of independent manufacturers or otherwise harmed competition.
Consequently, while the record does establish that manufacturers
have been increasing the number of their retail outlets, it is
entirely silent on the effects of this vertical expansion.