The San Francisco call., 1896-11-16
Peculiar Combinations That
Consumers Want to
Down.
Manufacturers Control the Out.
put and Regulate Prices to
Suit Themselves.
Some Of the Concerns Charge Higher
Prices at Home Than for Steel
Sent to Other States.

CLEVELAND. ONO. Nov 15.-Cleve-
land customers of the companies that
last spring formed the big steel pool are
contemplating the production of their
own steel because OF the discrimination
by the pool in its prices against the Cleve-
land factories. The Lake Erie Iron Com
pany is the company that started the
movement, and all but one manufacturing
concern here have agreed to enter into the
fight against the pool. The Lake Erie
Iron Company will erect an open-hearth
plant. The Union Rolling Mills will also
stop buying billets of the furnaces in the
mbination. The combination here is
secret and all its mem bers are agreed on
the one point of war against the pool. The
vice. president of one OF the big iron COM
panies that are fighting the pool gives the
following history of its organization and
workings:
The meeting at which the pool came
into existence was held at the Hotel Wal
dorf in New York City last April. A wri t.
ten agreement was signed by the repre-
sentatives of the companies which formed
the organization and officers were chosen,
president, secretary and so on and a
commissioner.
The companies which entered into the
signed agreement were these: The Car
| negie interests. Jones & Laughlin of
Pittsbprg; U. Ainsworth Steel Company
OF Pittsburg, Bethlehem Iron Company of
Bethlehem, Pa; Cambria Iron Works Of
Johnstown, Pa; Lackawanna Iron and
Steel Company, Pennsylvania Steel Com
pany, Steelton, near Pitts burg Shenango
Valley Steel Company of Newcastle Pa. :;
Maryland Steel and Iron Company of
Sparrow Point, Wheeling Steel and Iron
Com pany. Ashland Steel and Iron Com
pany of Ashland, KY; Bellaire Steel
Company, Junction Iron and Steel Com
pany OF Mingo, Cleveland Rolling mills
Company of this city, Otis Steel Com pany
OF Cleveland, Johnson Steel Company of
Lorraine, the King, Gilbert & Warner
Company of Columbus, Oliver Steel Com
pany OF Youngstown, Union Steel Com
pany OF Alexander, Ind, and the Illinois
Steel Company of Chicago. These are
virtually, If not entirely, all of the Bes-
semer steel establishment is in the country.
One OF the features of that instrument
is the production by the several com panies,
which is fixed at given per cent of the
total production of all the members of the
combination. For instance, the Illinois
Company and the Carnegie Company
each was TO make about 25 per cent OF all
the steel turned out in the country. The
Cleveland Rolling Mills per cent was
fixed at about 10 per cent. In case that
any company produced less than it's
allotted share the pool was to pay to it 81
ton for every ton by which it was de-
ficient. but if it produced more than the
prescribed per cent it was to pay into the
pool 81 ton for the excess. In a certain
bank penalty fund was deposited, to
which every signing company contributed
$500, 900 to be forfeited upon breach of
the contract. All the transactions of the
pool were to pass through the hands of a
commissioner.
Another feature of the contract was that
the country should be divided into dis
tricis or jurisdictions for the esta blish-
ment OF price scales. Pittsburg was made
the basis OF the schedule. Throughout
the Ohio, Mahoning and Shenango Val
leys, the Youngstown and Newcastle or
Sharon districts the normal rate of $40 %
ton Tor billets was to be charged. Pitts
burg. Wheeling and Beliaire, IN this iuris
diction, are representative points. In
Cleveland, according to demonstration.
steel may be produced with more economy
than elsewhere. The pool agreed that
billets should be sold for 500. rs, and in
the Illinois jurisdiction the price was
placed at $40 25. Thus, the Cleveland
Rolling Mills Company and the Otis Steel
Company were to charge $50 rs at their
very doors. though they might send the
same material to the Ohio Valley. pay the
transportation and charge only $40 IS.