South Bend news-times. (South Bend, Ind.) 1913-1938, 1917-03-10
FIGHT ON STEEL
TRUST IS BEGUN
Government Contends Prices
Have Violently Risen Since
Its Formation.

WASHINGTON, March 1O.-The
supreme court Friday began consid-
Grafton of the federal dissolution suit
against the United States steel cor
pOration, its subsidiaries and Off
GERS. Argument will continue until
next Wednesday.
Only seven of the nine justices
are sitting in the case. Justices
Brandeis and McReynolds retiring
voluntarily in accordance with the
court custom. The former, il is un-
derstood. did so because II public
expressions made before his appoint
ment, in writings and Official inves-
legations. regarding the so-called
steel trust. Without comment or
explanation, he left the bench Fri
day when the case was called. JUS
tice McReynolds while attorney gen
eral participated in the federal
prosecution which was begun in
1911 during Pres't Taft's admins
tratiOn.
In opening the governments case.
Assistant Atty. Gen. Todd pictured
combination" of competing units,
producing approximately one-half OF
the nations iron and steel output
and controlling assets of more than
$4,000, 5000 He declared it was a
grossly overcapitalized "combina-
ton of combinations" with the sub
salaries themselves overcapitalized.
Promoters, he said, received "enor-
nous" profits and prices had "vio-
lently risen after the corporation
was formed 16 years ago
Quitting the defense. Richard
V. Lindabury contended that the
Sherman law does not prohibit COM
binations merely for size and power
alone. Proportionate production by
tho corporation, he said, has de-
creased 70 400 percent since il was
organized, while competition and
competitors proportion of output
have increased output. He insisted
that the corporation is not a mono
poly and has TO power &c dominate
the industry.
Says Price Fixing Not Normal.
Mr.. Todd declared that the COM
bination is still overwhelmingly
preponderant" in virtually all
branches of the trade. and that the
price fixing holding company was
not a normal development.
zone OF the purposes was to ex-
plot the public" he added. THE
holding company is as illegal as the
old form of trust The combinations
proportion Of trade has declined, il
is true, but not substantially. nor
sufficiently to impair its power and
dominance"
For the defendants Mr.. Lindabury
insisted that in discussing the gov
ernment's suit, the New Jersey fed
eral district court of four judges, had
found that the com bination is not an
actual or attempted monopoly.
ut has not exercised monopolistic
powers" he said, land never at
tempted to restrain trade except in
the so-called Gary dinner move
ment"
Explains Gary Dinners.
The Gary dinners, the defendants
/ counsel explained, were begun by
1 ItS ArdlN VI TIC NOl BOA dNAOl Jul
! ing the stress of the 1907 panic etc
prevent its spread over the whole
| industry" He said the lower court
/ had found the price maintenance in
voked at these dinners was continued
too long, but had been discontinued
Competition between subsidiarie:
Of the corporation before they were
merged. Mr.. Lindabury asserted
was not extensive. They produced
many non-competitive lines anC
much of their production Of raw
material was not sold, but was usec
in manufacturing finished products
Many Of the subsidiaries los
their suprc macy in their particular
branch Of the trade before the cor
| poration was formed" said Mr.
! Lindabury, explaining that there wa:
little competition between the Car
| negie company of Pittsburgh and
/ the Federal Steel Co. of Illinois be-
cause of geographical boundaries OF
I IL L ~