KUNNEN EXHIBIT NO. 1 Wimmer Sends Affidavit on Tactics of Trading Stamp Sales man to FTC Edward Wimmer, vice president of the National Federation of Independent Business, submitted an affidavit to the Federal Trade Commission that ought to result in fast action against the Texaco Company. (The affidavit involves independent enterprise in America): Hon. Paul Rand Dixon "My dear Judge: "Will you please read the attached affidavit from a local gasoline dealer and pass it on to the Legal Department or to other persons with the F.T.C. who have concerned themselves with the trading stamp investigation. "We asked this young man if he wanted us to make an attempt to reduce the heat from Texaco or fight. He said, 'I would rather fight. I think I am working under some kind of Maffia.' "I know your files are packed with affidavits and other findings similar to this testimony, but it keeps going on and on. Every time I run into a stamp man, he gives us the laugh when we mention that the Federal Trade Commission is going to do something about this 'business'. "It is absolutely amazing how the $50 billion petroleum industry has fallen under the spell of the trading stamp companies, and how many small businesses have gone broke as a result of their activities. "I am also enclosing a copy of a full-page ad we ran in the Cincinnati Enquirer which has been well received as you might guess. "With all good wishes, hoping that our paths will cross in the not too distant future, believe me, "Very sincerely yours," Ed Wimmer, vice president I, the undersigned, do hereby report the following experiences with an official and a sales representative of the Texaco Company when I abandoned trading stamps in my service station which I lease from Texaco, located at Beechmont and Corbly, Mt. Washington, Cincinnati, Ohio. On or about August 13, 1964, I discontinued the use of S&H Trading Stamps. A few hours following discontinuance, an S & H salesman stopped at the station and asked what happened, and "where are your stamp signs?" My brother, Carl answered: "There is no sense in having the signs up because we have discontinued giving stamps." When we informed the stamp salesman that we could not afford the stamps, he said: "I'll see you later." What followed was something like a page out of the Maffia. Texaco salesman, Bill Bryan, called and ordered me to reinstate the stamps. He first mentioned that Texaco had a contract with me to keep the stamps, which wasn't true, and I told him so. He then told me I had a verbal agreement and I answered this accusation by saying the only agreement I ever entered into was to build the business the best way I could. Mr. Bryan insisted I could not drop the stamps. Then Mr. Joe Montgomery, district sales manager of Texaco, came on the line and he said: "The stamps. go back in or another dealer goes in." I argued my case the best I could, and in the conversation he threatened to not only put my brother and me out of the Mt. Washington station, but my other station in Bellevue where I have been giving Top Value Stamps. In the course of our conversation, Mr. Montgomery made the remark that: "I paid the S&H stamp man $500 to get stamps for that station and I am not going to see stamps leave that station." Trading stamps cost me $3,300 in 1963 in my Bellevue station, and in July the stamps in the Mt. Washington station cost $200. I work at least 98 hours a week and so does my brother, and our net earnings were under $1 per hour for either of us, in 1963 and so far in 1964. It is impossible, therefore, for us to continue stamps and continue in business without cheating the public in one way or another. We decided to get rid of the stamps after a thorough survey of our customers who told us they would not quit us if we quit stamps. I feel that if this sort of intimidation is allowed, the small station owner is ultimately doomed by his own supplier. Signed Starlin Shafer, Owner Shafer Texaco Beechmont and Corbly, Mt. Washington Cincinnati, Ohio 45230 NARD JOURNAL The most powerful force in the drug field STATEMENT OF Ed Wimmer, NATIONAL FEDERATIon of Independent Business, Inc., COVINGTON, KY. Mr. Chairman and Members of the Commission: There is probably no classification of business in America in which the small fortunes of small businessmen are more numerously invested than in the service station business. Certainly, no group of enterprisers has proven more convincingly that the desire of the American people to operate a small business of their own, is still a burning hope in the hearts of millions. Over the past several years, however, there has been no industry more torn by competitive strife, more threatened with monopoly, or more filled with individual bankruptcies. Causes of this deplorable situation will be brought out by many of the witnesses, so I shall not be repetitious. I would like to state, however, that the Commissioners ought to study F.T.C.'s own records of what some of the biggest oil companies have done to force dealers to take on unwanted trading stamp plans which have ruined thousands of these and, delve especially into the kickbacks to the big oil companies by their biggest suppliers. The greatest threat to the oil jobber and independent retailer, of course, is the merging of so many companies into a giant like Humble Oil Company (far bigger than the old Standard Oil Trust), and a Standard Oil subsidiary that could make Standard Oil a subsidiary which power is being used unmercifully in subduing dealers; running them out of business, and ruining their smaller suppliers. Overbuilding of stations by the big producers and a few other big companies, proceeds with no regard to need, to economic feasibility or with any respect for land that ought to 55-013 0-66-vol. 1—— 58 be put to more fruitful use by the average American community. Of utmost importance in the consideration of any program designed to bring order out of the monopoly and chaotic competitive conditions of the petroleum industry, is the long sought divorcement of retail outlets from ownership or control by the integrated oil companies. Until this step is taken, millions of dollars will be syphoned from profits of refineries, pipelines and producing wells, into the opening of huge service centers and whole clusters of unneeded, uneconomic station operations with Uncle Sam footing the losses. (Please see attached chart.) Investigations conducted under the chairmanship of James Roosevelt left no doubt about the need of such legislation, but the issue was sidestepped despite Mr. Roosevelt's view that divorcement is long past due. Here in Northern Kentucky we have nearly two-dozen stations going up in areas where one dealer after another has been going broke, and more locations are being bought. Said one official of Standard Oil: "We operate as if we were trying to ruin our own businesses." Vice President Moir of Pure Oil stated that giant oil companies have been playing "Russian Roulette" with their dealers. The president of Cities Service has often deplored present trends against the independents, and John Boatright, former economist of Standard Oil of N. J., warned big oil to "preserve your independent operators as the best safeguard against government control of the industry." The Commission is to be congratulated on taking up this investigation on such a penetrating basis, and it is to be hoped that when the testimony has been heard, corrective action will not be delayed so long that another thirty or forth thousand dealers will be added to the already startling list of bankrupts. Signed by ED WIMMER 1962 FIGURES below show giant Standard Oil of N. J. paying U.S. income taxes of 0.63% on profits of $1,271,903,000. This results from the 27% DEPLETION allowances which have no relation to what is commonly known as DEPRECIATION taken by ALL companies. Prior to acquisition of Kentucky Standard by taxes were lost following acquisition. everything PRESIDENT TRUMAN and a Secretary of the Treasury, called the 27 per cent DEPLETION ALLOWANCE a case of "Double Deductions" taken after all depreciation on drilling, shipping, refining, exploration - taken by ANY company. Worst evil of the depletion allowance shows up in uneconomic destructive expansion of huge oil, company-owned service stations and service centers which destroy their own Jobbers and dealers ...thus monopolizing the service station business. Some of this huge subsidy bought new companies; large government holdings, paid for ships built in Japan, et cetera, et cetera. REMEDY: Divorce all big oil companies from operating service stations, motels, service centers, insurance companies, restaurant chains, and reduce depletion allowances by at least half excepting independents in exploration field. UNCLE SAM is being robbed - and this is YOU! Other businesses are being penalized, and thousands of independent business opportunities are being destroyed. Write for information. - ED WIMMER, 2nd & Court Sts., Covington, Ky. 41011. ... WALTER EXHIBIT NO. 1 LEASE OPTION AGREEMENT For and in consideration of $1.00 and other valuable considerations received from Gulf Oil Corporation, a corporation, the undersigned, Phillip D. Walter and June I. Walter, husband and wife, hereinafter called "Grantor," whose post office address is 56 Hannah Street, Battle Creek, Michigan, on behalf of himself, his heirs, executors, administrators, personal representatives and assigns, has this day bargained, granted, and sold and by these presents does bargain, grant, and sell unto said Gulf Oil Corporation, hereinafter called "Grantee," its successors and assigns, an irrevocable option to lease the premises described in the attached lease agreement upon the terms and conditions therein specified; and said lease agreement, which has been duly signed and acknowledged in duplicate, is made a part hereof but shall not become effective unless and until the option herein granted is exercised in the manner hereinafter prescribed. The option to lease hereby granted may be exercised by Grantee, its successors and assigns, at any time between the date hereof and the 31st day of July, 1973, upon the happening of any one or more of the following conditions; (a) In the event the undersigned should for any reason cease to operate, himself, the business presently conducted on said premises. (b) Upon the breach by the undersigned of any of the conditions of a Sales Agreement between the parties dated March 25, 1958. (c) The termination of said Sales Agreement by operation of law, or other cause not attributable to an act of said Gulf Oil Corporation, or by mutual consent. Failure to exercise said option shall not waive Grantee's right to do so at any time between the dates mentioned. The term of said lease shall begin and the rental therein stipulated shall begin to accrue to the benefit of Grantor, his heirs and assigns, and shall be payable in the manner specified therein when said option is exercised by Grantee by written acceptance of said lease either mailed to Grantor at said address or filed for record in the county where the property described in said lease is situated. Executed in duplicate this 26th day of March 1958. PHILLIP D. WALTER [SEAL] Signed and sealed in the presence of : STATE OF MICHIGAN, County of Calhoun, ss: G. M. DILANTH. Before me, a Notary Public in and for said County and State, personally appeared Phillip D. Walter and June I. Walter, known by me to be the parties who executed the foregoing instrument and who acknowledged to me that they execued same as their own free act and deed. Witness my hand and notarial seal this 26th day of March, 1958. My Commission Expires Dec. 27, 1959. LEASE AGREEMENT EDNA SHANNON, This Lease Agreement, made and entered into this 26 day of March 1958, by and between Phillip D. Walter and June I. Walter, husband and wife, of 56 Hannah Street, Battle Creek, Michigan, hereinafter called the lessor, and the Gulf Oil Corporation, a Pennsylvania Corporation, with Division Office at Toledo. Ohio, hereinafter called the lessee. WITNESSETH: 1. For and in consideration of the rentals to be paid by the lessee to the lessor as hereinafter stated, the lessor does hereby grant, lease and demise unto the lessee that certain part or parcels of land situated at the intersection of the southwest corner of Capital Avenue NE., and Edgemont Street, in the Township of Pennfield, County of Calhoun and State of Michigan, more particularly described as follows: |