New-York tribune., 1919-05-24
Huge Quantity Allotted
to Six Companies at
Identical Price of S47, as
Offered in the Bids
Under Protest by Hines
"Emphatic Disapproval'' of
Methods Is Expressed
by the Director General

WASHINGTON, May 23.-Orders for
100000 tons of open hearth rails have
been placed by the railroad administra-
tlon with six steel companies which, in
response for request for bids quoted
uniformly a price based on the agree
ment between the steel interests and
the recently dissolved industrial board
of the Department of Commerce.
Director General Hines, whose re-
fusal to abide by the agreement was
an influential factor in the dissolution
OF the industrial board, in announcing
the orders tonight said they were
placed under protest." and with the
"emphatic dsapproval of the prices
and the manner in which thew were
established"
The price submitted by all of the
bidders was announced by Director
Hines as SAT ton, which is the exact
price agreed upon for such rails bv
the steel manufacturers and the In
dustrlal Board. The companies sub
mlttng bids were Carnegie Steel Com
pany, Illinois Steel Company, Tennes
see Coal and Iron Company, Colorado
Fuel and Iron Company, Bethlehem
Steel Company and Lackawanna Steel
Company
Asked Competitive Bids
After his failures to induce repre-
sentatlves Of the steel interests at
final conference in New York several
weeks ago, to reduce the prices estab-
llshed in their agreement with the In
dustrial Board Director General Hines
announced that in the public interest
ne would request competitive bids on
the steel requirements of the Railroad
administration, which is the largest
buyer of steel in the country The
companies in response submitted their
bids which resulted in to-day's orders
and Mr.. Illness protest.
In his recent opinion. holding the
price agreement plan of the Industrial
board "to be unauthorized by law"
Attorney General Palmer declared that
under the antitrust laws price fyine
agreements were illegal and that such
agreements might be drought about
through an informal meeting of the
minds as we'll as through formal con-
tracts"
Mr.. Palmer also held it to be an
established legal principle that "the
purchase of Government supplies shall
be governed by the competitive svs
tenn
Says U. S. Steel Leads
Director General Hines in his state
ment tonight charged that the action
of the six steel companies in sub
mitting uniform bids "was taken under
the leadership of the United States
Steel Corporation"
Explaining the position of the Rail
road Administration, Mr. Hines said:
when the Industrial Board approved
the prices proposed by the steel in
terests 1t became at once apparent to
me, and | so indicated in various dis
cusslons with representatives of the
government, that that approval would
encourage the steel interests to stand
together on those prices even though
governmental approval was withheld
u felt, however, that, even so, it
would be far more in the public in
terest for the government to withhold
approval and if necessary pay such
prices, for the time being, under pro-
test rather than indorse the prices.
and that, too, for the entire calendar
year as was proposed by the Industrial
Board, and thereby give an official
sanction to prices which were unrea-
sonably high, and which would merely
serve as starting point for still
higher prices later on.
Voices Emphatic Disapproval"
"The result has been in exact ac
cordance with this forecast. In view
of the immediate need for 100000 tons
OF steel rails, orders have been placed
at the prices submitted, but with en-
phatlc disapproval of the prices and
the manner in which they have been
established.
THAT action of these six steel COM
panles in making uniform bids was
taken under the leadership of the
United States Steel Corporation is
clear from the fact that Immediately
after the railroad administration an
nounced finally that it would not ap-
prove the prices fixed by the Industrial
Board, Judge Gary, for the Steel Cor
poration, took the initiative in an
nouncing publicly that the Steel Cor
poration was strictly maintaining the
prices approved by the Industrial Board
and that it seemed to him that would
be the attitude of other manufacture
ers."
Alleges Heavy Profits"
Mr.. Hines then gave figures showing,
he said, the "heavv profits" of the steel
companies in recent years, in support
of his contention that the rail prices
quoted were unreasonable.
1T is important to remember" said
Mr. Hines in conclusion, that the pres
ent policy of the steel interests in ad-
herring to high prices on the ground
that present costs necessitate them is
policy that does not work both ways.
1t is policy to keep prices from 60
ing lower as business increases and
costs diminish