The Washington herald., 1918-01-09
FEDERALSUIT
CUTS BUDGET
Holland Tells Of U. S. Steel's
Modification of Plans for
Tennessee Company.

Eleven million dollars was appro-
priated by the United States Seet
Corporation a few months ago for
Improvement Of the plant Of the Ten
nessee Iron and Coal Company. Much
more than 81, 900 would have been
auDroprfated were II not Tor the
fact that the Department Of Justice
has asked the Supreme Court to re-
verse the action OF the lower court
In giving q clean bill to the steel
corporation. As much as 81, 900 was
necessary II improvements that should
be undertaken Immediately could be
made. Probably three or four times
al.Oa.OoO would have been set aside
BY the steel corporation for improve
ment OF the Tennessee property had
the corporation been protected by q
decision OF the Supreme CouIl.
The impression has been strong that
the what the Department Of Justice
Is seeking chiefly Is such decision
Of the Supreme Court as viii COM
pei the steel corporation to part with
the Tennessee Coal and Iron Com
Dany. Yet the experiences and emer-
gencies OF the war have already
made clear what the vital relation
OF the TENNESSEE company Is to the
work jt pr-paration- Furthermore.
the steel CORPORATION has realized that
when normal times return the Ten
nessee company should be in posi-
ton to meet the heavy demands for
iron and steel products which will
come from all parts of the South.
and probably also from Central and
South America. Demands Of this
kind can be met with greater ia
cility and more economy by the pro-
duction OF the great steel and iron
producing plant in the South, and.
when fully developed, will be sure
to be oEs OF the greatest in the world.
than IL these orucrs came to north
ern industrial plants.
The steel corporation has been R1nx-
ious-not only upon the grounds OF
economy, but also for the purpose OF
understanding what its rights under
the law are-to have the supreme court
pass. as soon as possible. upon the ap-
peal which the Department OF Justice
made from the decision Of the lower
court which was in favor of the steel
corporation. Had the Department OF
Justice accepted the decision of the
lower court and abandoned further
proceedings the steel corporation
would already have greatly expanded
and improved its facilities for the
manufacture of commodities which are
at this time especially needed for war
purposes and which. after the war Is
ended. will be of the utmost service.
especially in maintaining our foreign
trade.
Matter of Eeeaomy.
From the point OF view OF economy
the managers OF the steel corporation
feel that they should be no longer
subjected to the heavy expense which
had been entailed by the prosecution
by the Department Of Justice OF the
corporation. So far the cost placed
upon the steel corporation in defend
ing itself has been heavy-several hun
dred thousand dollars directly, and
probably as much more indirectly. In
this respect. however. the corporation
does not differ from others which have
been compelled by action OF the De-
pertment OF Justice to defend them
selves. The cost which one corpora
ton in the midwest was compelled to
meet in defending itself upon proceed
ings brought by the Department of
Justice was somewhat in excess OF
1900, 900. and yet the prosecution of
this corporation came to naught.
The heavy expense entailed in de-
Tending corporations against which
the Department OF Justice has act
ed was one Of the reasons which
led Howard Elliott. when president
rOf the New Haven Railroad and
Theodore n. Vail, as president Of
the American Telephone Company,
to accept without opposition. GER
tain compromise propositions which
were offered by the Department OF
Justice. And yet the New Haven
railroad company is now compelled
70 do the very thing which the De-
partment Of Justice declared to be
unlawful and the governments re-
lation to the great telephone cor
poration, will probably result in
compelling that corporation to do
precisely the things which the De-
partment Of Justice declared some
time ago was Illegal.
Its Indirect Loss.
r. V. Lindanbury, counsel of the
United States Steel Coroporation.
has stated that IL the request of
the Department Of Justice that the
hearings In the antitrust cases be
postponed until q later term of the
court be granted the result will be
considerable additional loss to the
corporation, to its stockholders and
its employees. The government Is
compelling the corporation to make
large investments in additional
plant facilities and also to entail
other expenses to meet the war re-
quirements OF the government. II
these expenses should be maintain
ed another year through postpon-
ment Of the hearing against the
steel corporation they would entail
great deal OF loss to the corpora
tion in case the court decided that
IL should be dissolved.
Mr. Lindanbury further states that
the foreign trade built up by the cor
poration, the money value of which
was SlOOe0,000 q year at the time
proceedings began three years ago,
VIII. II this business Is to be main
tained-compei great activity and
large expenditures. These, however,
could not be reasonably undertaken
|as long as a threat of dissolution Of
The corporation remains. II the COR
|poration is to be dissolved simply jus-
ltice requires that this should be done
immediately, in view Of the corpora
|tlon.
1t seems to be common opinion that
the action OF the Department of Justice
asking for a postponment Of the
bearing in the antitrust cases Is real
, due to the extraordinary and, from
one point OF view. a somewhat en-
osrrassing situation in which the gov
ernn1ent now 6pAa ffaaIF r. a.