Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1919-05-30
ExToRTloNATE STEEL PRICES
United States Orders 100000 Tons at
S47 Ton.

E&TORTlONATE Eel fHISGS
United States Orders 100000 Tons at
$47 a Ton.
Six of the leading steel companies
have been given orders for a total OF
200, 900 tons of steel rails for the
United States Railroad Administration
at SAT a ton, which Is exactly the price
they proposed to, and that was ap-
proved by the defunct Industrial board.
In accepting their bids, Walker d.
Hines, Director General Of Railroads,
last night issued a statement in which
he denounced the price and the alleg-
ed agreement among the companies to
maintain it, but declared that the gov
ernment, in the public interest, must
place the orders.
THAT the action Of these six COM
panies," Mr.. Hines said, was taken
under the leadership of the United
States Steel Corporation, is clear from
the fact that Immediately after the
railroad administration announced I'm
ally that it would not approve the
prices fixed by the Industrial Board
Judge Gary, for the steel Corporation,
took the initiative in announcing pup
licly that the Steel Corporation was
strictly maintaining the prices fixed Dy
the Industrial Board and it seemed to
him that would be the attitude of the
other manufacturers"
The six companies referred TO are
the Carnegie Steel company. the I'LL.
nois Steel Company, the tennessee
Coal and Iron Company, said by Mr..
Hines to be subsidiaries Of the United
States Steel Company, and the LacKa-
wanna Steel Company, and the Bethle-
hem Steel Company and the Colorado
Fuel and Iron Company.
A seventh bid at s57 ton was made
by the Midvale Steel and Ordnance
Company, and Of this higher bid' Mr..
Hines said it was interesting to note
that this company's net earnings were
1855 a ton on all it's steel products IN
1918, but that its apparent position
now is that it cannot afford" to make
any reduction without reducing wages.
Immediate Need of Rails.
In view of the immediate need or
steel rails, Mr.. Hines said he feels that
it would be far more in the public in
terest to pay the prices demanded for
the time being, under protest. He still
believes that official sanction was
wisely withheld from what he en-
phatically terms "profiteering" prices.
His statement continues:
1T is a remarkable fact that In the
calendar years 1917 and 1918 the net
earnings of the Steel Corporation ag-
gregated approximately s1,00o,O0O,OOo,
being in excess of the annual rental
which Congress has sanctioned as rea-
sonable for practically the entire rail-
road mileage in the United States.
Allowing heavy excess profits tax,
making liberal allowance for deprecia-
ton and extraordinary replacement
funds and allowing interest on bonds
and per cent on preferred Stock
there remained an earning Of 1872 per
cent on its stock in 1917 and Of % per
cent on it's common stock in 1918. The
claim that wages Of labor would be
endangered by reasonable price on
steel is therefore not convincing.
"The resumption Of business in the
country will probably result in the
substantial diminutior in the cost OF
steel production; but, unless the at
tention Of the public is constantly
centered on the situation, there is dan
ger that the steel interest will take ad-
vantage of the increased demand to in
crease the prices Of steel still further,
even in the face of declining costs.
Excessive Profits.
THE situation in the steel industry
is of the greatest moment to the
American public. The United States
Steel Corporation is the largest pro-
ducer and controls approximately so
per cent of the output. 1t takes the
lead in maintaining a price which in
dicates a grossly excessive profit, and
it does this for the avowed purpose of
alleged high cost producers,
which, however, so far as they make
detailed reports on the subject to their
also indicate large profits.
This condition operates to suspend
the law of supply and demand, when 1t
could work in favor Of the customer,
but it leaves that law free to operate
with the greatest effect when it can
work in favor Of the manufacturer.
This situation also works to deprive
the public of the benefits of the in
creased efficiency due to the great
combination in the steel business.
Those combinations are the suits OF
public acquiescence and yet all the
benefits of them go not 10 the public
but to the private owners. The more
powerful the combinations become. the
more successful they are in keeping up
prices.
"TheSe reasons lead me 10 relterate
that the prices in question are un-
reasonably high at present and will be-
come progressively more unreasonable
as business improves and conditions
become more nearly normal"
Peek Talks Back.-Georse N. Peek,
formerly chairman OF the Industrial
hoard. authorized a denial Of the