The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-24
Hines ORDERSRAILS,
BUTPROTESTS PRICE
II Take 100000 Tons at $47,
as Quoted by Each of Six
Big Companies.
POINTS TO "BIG PROFITS"
Charges U. s. Steel Corpora
ton With Leading in Plan
for Uniform Figure.

WASHINGTON, May 23.-Uniform bids
based on the prices agreed upon be-
tween representatives OF the steel in
.srests and the recently dissolved indus
trial board have been submitted by ak
steel companies in response to the rail-
road administrations request for bids
on open hearth rails.
director General Hines announced to-
night that he had placed orders with
these companies for 200, 900 tons of rails.
but that he had done 30 under pro-
test" and with emphatic disapproval OF
the prices and the manner in which they
we're established"
A uniform price OF SAT a ton for
open hearth rails. which Director Gen.
eral Hines said was "in strict accordance
with the prices approved by the indus
trial board" was submitted to the rail-
road administration by the Carnegie
Steel Company. the Illinois Steel Com
pany and the Tennessee Coal and Iron
Company, all subsidiaries OF tho United
States Steel Corporation, and by the
colorado Fuel and Iron Company. the
Bethlehem Steel Company and the Lack
awanna Steel Company.
After his failure to induce representa-
tives Of the steel interests at u final
conference in New York several weeks
ago to reduce the prices established In
their agreement with the Industrial
- ntrartnT-Ganara1
nounced that in the public interest he
would request competitive bids on the
steel requirements of the Railroad Ad-
mlnistration, which is the largest buyer
Of steel in the country. The bids an
nounced tonight we're submitted in re-
sponse to the Director-General's request.
Palmer Calls Agreement Illegal.
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 fixing agreements
were Illegal and that such agreements
might be brought about through an In
formal meeting OF the minds as we'll as
through formal contracts" Mr.. Palmer
held also that II is an established legal
principle that "the purchase of Govern
ment supplies shall be governed by the
competitive system"
Explaining the position taken by the
Railroad Administration In pie cling
orders with the steel companies Mr..
Hines said:
When the Industrial Board approved
the prices proposed by the steel interests
Il became at once apparent to me, and
| so indicated in various discussions
with representatives Of the Government,
that that approval would encourage the
steel interests to stand together on those
prices, even though governmental ap-
prevail was withheld. I felt. however,
that even so It would be far more in
he public interest for the Government
10 withhold approval and II necessary
pay such prices. for the time being, I'M
der protest rather than indorse the
prices. and that too for the entire cal
sndar year. as was proposed by the
Industrial Board, and thereby give an
official sanction to prices which were
lnreasonably high and which would
merely serve as a starting point for still
higher prices later on.
The result has been in exact accord
ance with this forecast. Six of the lead
ing steel interests. in response to the
AsoA44hdu request
lids for steel rails. have submitted bids
which are uniform in all respects as to
prices and conditions of manufacture
ard are in strict accordance with the
prices proposed to and approved by the
Industrial Board. In view of the i'm
mediate need for 100000 tons of steel
rails orders have been placed at the
prices submitted. but with emphatic dis
approval OF the prices and the manner
in which they have been established.
Says L. =. Steel Led Movement.
That the action OF these six steel
companies in making uniform bids was
taken under the leadership Of the United
states Steel Corporation Is clear from
The fact that imediately after the rail-
road administration announced finally
hat It would not approve the prices
txed By the industrial board, Judge
Gary, for the steel corporation. took the
initiative in announcing publicly that the
STEEL corporation was strictly maintain
hg the prices approved by the industrial
BOARD and that 1t seemed to him that
would be the attitude of other manu-
.acturers"
Mr.. Hines read revised figures show
ns' he said, the heavy profits" OF the
s.etl companies IN recent years in sup
pof. OF his contention that the rail prices
quoted were unreasonable.
=. Is important TO remember" said
mr. Hines in conclusion, that the pres
,"t policy of the steel interests in ad-
4e'hs TO high prices on the ground that
present costs necessitate them Is a policy
t"al Goes not work both ways. II In a
po"cy to keep prices from going lower