The daily morning journal and courier., 1906-07-23
4 TRUST ON ITS KNEES
THE ARMOR PLATE MONOPOLY
 HAD SHORT LIFE.

! was unable to Hold its One Customer Problem of Government Now is How
 to Prevent Formation of a New One.
 It is a pathetic spectacle when rep | Iresentatives of the Bethlehem and
 Carnegie Steel Companies, which es- tablished the Armor Plate Trust some years ago, appeared before the head
 of the Government Ordinance Bureau
 to plead against permitting a mo- nopoly in armor plate making by let ting to the lowest bidder the entire contract for furnishing plates for the
 new battle ships South Carolina and
 The Government is the only customer for this particular product of steel and, when it began to create a mod ern Navy, plants had to be established and equipped for making armor plate for it's battle ships and cruisers. The Carnegie and Bethlehem Steel Com- panies were the first to enter the field on the assurance that it would be a profitable business, but they soon ceased to copete for contracts and formed a trust" by agreeing upon their bids and dividing the work. They had practical monoply and their prices were alleged to be extor- tionate, which produced much agita-
 ton in Congress a few years ago. The question was raised of having the Gov- ernment itself go into the business. as
 the only means of creating competi- tion and getting armor plates at a legitimate cost.
 Then the high prices and profits of the business induced the Midvale Steel Company to establish an armor plate
 works at Philadelphia. In equipping its plant it adopted the latest appli- anees and methods and last year it put in a bid that was lower than those
 of the rival companies, but the con tracts were divided and it received
 only one third of the work to be given
 out, on the ground that it had not the
 capacity to do it all within the con- tract time. The Bethlehem and Car negie companies each received one- third and had to be satisfied. This year the Midvale Company is again the lowest bidder, and it claims so to
 have extended it's works that it is able to supply all the plate required for the two battle ships within the time
 specified, with a saving to the Govern ment of S170, 900 In comparison with the
 Carnegie bid and more than quarter
 of million compared with that of the
 Bethlehem Company.
 Now come representatives of the al- legged trust to put in plea for their
 share of the work. offering to come down in price to the level of the low est bid rather than ot have the work, though it may result in loss on the contract. They have their costly plants and the forces of workmen
 skilled and trained in this branch of
 the steel making, and these will have nothing to do if the entire job is. gil ven to the Midvale Company, while it will be two years before any more armor plate will be wanted. Not only is the argument used that the conn panies will have to go out of this line of business, leaving the workers in it without employment, but the Govern
 ment will be at the mercy of mon-
 opoly There is not much in the first argument by itself, for 1t the
 works at Philadelphia are able to sup
 ply all the armor plate required, of as
 good quality and at lower cost than
 those at Bethlehem and Pittsburg,
 there ould be economic gain in let
 ting the latter go to the scrap heap;
 and if there was not as much work for
 labor at one place as the three, it
 would be because less labor was re- quired and that also would be an
 economic gain.
 But the argument against a new 'armor plate monopoly is more serious,
 Competition results in goring the old monopoly, and consequently it cries out against being gored, to death too give place to a new monopoly, whose bids in future, when 1t got the field to itself, might not be so moderate There is much in this argument, and it presents a problem for the Govern ment which it Is it's business to solve
 It competition in making armor plate for our Navy cannot be maintained and it must become monopoly, there should be some means of restraining it and regulating the cost of the plate Shall the Government go into the business itself. Shall it invite bids from all the world and get the re- straining effect of foreign competi- ton, or shall it fix the price it will pay and divide it's work among those able and willing to do 1t at that price? That question will have to be an-