to permit any industry to determine for itself what are generally recognized as retail sales?'
'No. We discussed that matter earlier in the afternoon. There could be various criteria which could be applied, one of which of course would be the conclusion of the trade association in the particular industry. But that is only one criterion. Others would apply (95 Cong.Rec. 12510).'
I do not understand the defendant to argue that the amendment made any change in the law beyond abolishing the 'consumer-use' test which the courts had applied. As to industry-recognition, the defendant's position is that it had always been the test and that the intent of the 1949 amendment was merely to clarify and confirm the 1938 Act in that respect, that where present it is a determinative factor and that, if the transactions of a business are recognized in the industry as retail sales or services, that business is and always has been thereby within the exemption. On the other hand, the government's view is that if an establishment is performing services which are susceptible of classification as 'retail services' then, under the amendment, the judgment of the industry is to be accepted as to whether they are retail or wholesale. If not, there is no occasion to apply the industry-recognition test. I think that the legislative history of the amendment as well as the terms of the original Act, clearly supports the government's view.
In the committee reports and throughout the debates, members of both the House and Senate were repeatedly assured that the amendment would not expand the classes of exempt establishments under the existing law. In enacting the amendment Congress recognized that there were certain industries to which the concept of retailing (or, for that matter, of wholesaling) was totally inapplicable, that such industries were outside the scope of the exemption of the original Act and were not to be affected in any way by the amendment.
The House Managers' Report which is attached to the Conference Report states:
'The Amendment does not include banks, insurance companies, building and loan associations, credit companies, newspapers, telephone companies, gas and electric utility companies, telegraph companies, etc., because there is no concept of retail selling or servicing in these industries * * *.' The Senate Report stated:
'The Conference agreement exempts establishments which are traditionally regarded as retail * * * and establishments which do not now have the exemption because the selling or servicing in which they are engaged is not considered to be retail (such as banks, insurance companies, credit companies, newspapers, telephone companies, gas and electric utility companies, telegraph companies, etc.) will not become retail or service establishments under the provisions of the Conference agreement.'
Senator Holland, on the floor of the Senate answered certain specific questions among which was the following:
'Question. Would the proposed amendment have the effect of exempting banks, insurance companies, credit companies, newspapers, telephone companies, newspapers, telephone companies, gas and electric utility companies, telegraph companies, etc?
'Answer. No. These types of businesses are not considered exempt under the retail or service establishment exemption in the present law because the selling and servicing which they do are not generally considered to be retail. The proposed amendment would do nothing to change their nonexempt status under the retail and service establishment exemption. To the extent that Congress intended to exempt any of these businesses it created special exemptions for them. See, for example, Section 13(a)(8) (exemption for small weekly and semi-weekly newspapers); Section 13(a)(9) (exemption for local trolleys and local motor bus carriers); Section 13(a)(11) (exemption for switchboard operators of small telephone exchanges).'
Although banks are in the personal loan business and in many that phase of the business predominates, these reports, after receiving which the Congress acted, specifically point out that banks are not in the exempt class.
The fact is that there are certain types of transactions which simply cannot be fitted into the category of performing services at retail and any attempt to do so creates an anomaly. Expert witnesses called by the defendant testified that every form of economic transaction resulting in gain to either party must necessarily be a sale or the performance of a service and, undoubtedly, for statistical purposes and economic studies, it has been found convenient to adopt that concept. However, whatever may be the views of statisticians or economists, the Supreme Court plainly thinks otherwise. In Kirshbaum v. Walling, 316 U.S. 517, 62 S. Ct. 1116, 1121, 86 L. Ed. 1638, the Court had before it the case of a company whose business was renting lofts in a building owned by it to various small industries. The Court disposed of the petitioner's contention that inasmuch as it was not selling goods it had to be a 'service' establishment within the exemptions of 13(a)(2), with the brief observation, 'Selling space in a loft building is not the equivalent of selling services to consumers * * *.' Of course, it was not selling goods, and the Supreme Court clearly had no difficulty in conceiving of a business which, so far as the interpretation of the law was concerned, was selling neither goods nor services.
Even though it could be assumed that, as the defendant contends, every business is engaged in selling either goods or services, it does not follow that all sales of services are of the type contemplated by the exemptions. Loaning money (if Congress considered it the sale of a service at all) was clearly not, in the intendment of Congress, a type of transaction which would lend itself to classification as a retail sale of services.
Judgment for the plaintiff. Injunction as prayed for may issue.