The New York herald., 1921-04-30
The Steel Corporation Prices.

One of the noteworthy features Of
the Federal Trade Commissions COM
plant against the United States Steel
Corporation and eleven subsidiary
companies for unfair competition" Is
that the proceedings were urged by
Judge GARY himself as long ago as the
middle of 1919, when the head Of the
great corporation said to the commits
sion: "It Is one of the most important
questions that you ever had before
you or ever will have before you. !
believe it is matter to be settled by
this commission"
What the matter is. in this particu-
lar steel case, is the so-called Pitts
burgh plus price plan. Under this ar
rangement, 1t is complained. purchas-
ers Of rolled steel must pay anywhere
In the market the fixed Pittsburgh
base price plus the freight rate on such
steel from Pittsburgh, "even though
the product is not purchased at or
shipped from Pittsburgh"
In other words, If the steel were
manufactured and sold and delivered
to the purchaser, say, In Duluth, the
Pittsburgh base price being $50, then
the Duluth price for the Duluth prod
uct delivered to that Duluth consumer
right in the place OF manufacture
would be $50 plus S13.20, the imagi-
nary freight charge from Pittsburgh
to Duluth. Again, when steel Is pur-
chased, say In Gary, Indiana, and de-
livered to La Porte. Indiana, the Gary
price to the purchaser Is $50, the
Pittsburgh base price, plus an imagi-
nary freight charge Of $7.10 from
Pittsburgh to La Porte, making a
total Of $57.1O at Gary. But the ac-
tual transportation charge Of $3.50 a
ton from Gary to the purchaser at La
Porte is paid by the producer. The
Birmingham price, on the other hand,
is the Pittsburgh base price plus an
arbitrary $5 a ton plus the freight.
The meat of the complaint Of course
Is that although the steel can be
made and is made for very much
less in Gary, say again, than In Pitts
burgh, and although the purchaser
and consumer might be near or right
at Gary, nevertheless the price to the
consumer must be $3.50 ton more
than the price charged to Pitts.
burgh purchaser and consumer for a
dearer cost steel made In Pittsburgh.
Similarly a purchaser and consumer
near Birmingham. Alabama, say At
lanta, Georgia, is charged $12.50 more
ton than a purchaser and consumer
at Pittsburgh, although tho cost OF
manufacture Is much less at Bir.
mingham than at Pittsburgh and al
though the freight from Birmingham
to Atlanta is comparatively trifilng.
Another thing complained OF Is
summarized as follows:
THE Birmingham price Is unfair
and unlawful because the amount OF
1 20 per ton Dy WnlCn u eACeeus Ine
Pittsburgh base price Is arbitrarily
added for the purpose Of discriminat-
Ing in favor of steel consumers In
Birmingham as against those In a
large territory Immediately outside
OF that city and In favor Of steel
consumers in Pittsburgh as against
those In Birmingham, notwithstand-
ing the fact that steel Is manufAo-
tured in Birmingham at much less
cost than at Pittsburgh"
And the sum and substance of the
complaint, as whole, is: Pitts.
burgh, the high cost producer, gets
the bulk Of the business and gets II al
profit thus artificially and arbi
trarily decreed; the lower cost plants
elsewhere get additional profits on
top of the Pittsburgh scale of profits
both because of their lower produc.
tion costs and because of their higher
prices, as compared with Pittsburgh
every increase of transportation
charge makes increasing prices and