The Washington herald., 1921-06-05
STEEL COMPANY
DEFENDS PRICE
'BASING PRACTICE
Denies Pittsburgh Plan
Tends to Lessen Com
petition.
CLAIMS GOOD FAITH
Corporation Admits Control of
As Per Cent of Rolled
Steel.
CLAIMS GOOD FAITH

Controlling 125 plants through its
subsidiaries. the United States Steel
corporation. a $4,000. 100000 holding
company. manufacturers of ap-
proximately As per cent of the semi
finished rolled steel made in the
country. the corporation said yes
terday in a statement filed with the
federal trade commission. &,
The statement was the steel COM
panies answer to the complaint OF
the Western association Of rolled
steel consumers against the cor
poration's practice in basing all It's
prices on the cost of production
at Pittsburgh plus the freight rate
at point of delivery.
Consumers Claim Injustice
The western consumers asked the
commission to order the corporation
tn abolish Pittsburgh as the only
cost basing locality. arguing that II
DESTROYED competition and WORKED
an injustice against consumers OF
steel products in the west
The steel corporation, in its an
srer entered a blanket denial oil
the charge that competition was
heinr throttled and declared the
practice of basing prices on fi'tS-
burgh dated from the earliest man
ufacture of steel in this couhtrs'
Among the facts concerning the
steel corporation set forth IN lIH
formal answer are:
Tba corporation and its sub
sidiaries control 80 per cent Of the
total iron ore deposits in the Lake
Superior district and Alabama: con
trolls two ore carrying railroads III
the Lake Superior district, and one
of seven roads operating between
the lower lake ports and the manu-
featuring plants of the suosidlafieS
and their competitors.
Controls Lake System.
n. CORPORATION controls a lake
TRANSFORMATION system OF NesSeIs
which is employed solely in car
ing ore. coal and limestone TOT the
corporation companies.
Products are not carried oy 'he
boats for competitors.
The cooperation has capital sto:S
outstanding of the par value $685.
So, 500, and of book Nalue
ceedinE $500, 100000.
The gross assets of the corpora
tion and its subsidiarity companies
aggregate over s2.O0O.00O.0oo.
The corporation denied. as charged
nv the consumers, that steel is man
ufactured in Chicago and Birming-
ham more cheaply than in Pitts
burzh. The corporation admitted,
however. that the price charged for
steel m Chicago and Birmingham by
its subsidiaries exceeds the Pitts
burzh price by more than the diff
ference in the cost of production be-
tween the respective localities.
Admit Price Differences.
Respondents admit" said the
corporations answer. that the diff
ferent prices charged by said sub
sidiaries for the various products as
between different localities and COM
munities are not made on account
of the difference in the grade or
quality of such products and such
differences in price are not based on
differences in the cost of selling
such products. or on differences in
the cost of transportation"
They aver. however, that such
different prices are made in good
faith on account of the quantities
furnished or to meet competition in
the different localities and commun-
tiles and represent the market prices
prevailing therein from time to time.
They deny that such differences con-
stitute discrimination within the
meaning of section two of the Clay
ton act or any law of the United
States.
Claim stabflizinE Tendency.
Respondents deny that the Pitts
burgh basing practice tends to les
sen competition with or creates a
monopoly for the Pittsburgh fabri-
Gators. including said subsidiaries"
the answer reads. They say that on
the contrary its tendency is to sta
bilize the fabricating industry, in
crease competition and distribution
and prevent monopoly therein and
in the steel trade generally and
such has been it's affect, notwith-
standing the increase in railroad
freight rates, referred to in the
complaint"
The steel corporations answer
was flled by willima W. Corlett,
acting for Richard v. Lindabury,
and Cordenio A. Severance. counsel
for the steel corporation
Among those associated with the
steel corporation in the answer are
the American Bridge company,
American Sheet and Tinplate COM
pany. Carnegie Steel company, Ma
tional Tube company, American
Steel and Wire company, Illinois,
Steel company, Minnesota Steel COM
pany, Clarion Steel company.
Union Steel company, Lorain Steel