The Hays free press., 1921-06-16
THE KANSAS FARMER AND THE
'-PITTSBURGH PLUS" SYSTEM

quite likely to affect a farmer in Kan
sas, a business man in Chicago or a
capitalist in New York.
And a trade practice in one of the
nations basic necessities is sure to be
of grave Importance to every tax
payer.
Pittsburgh Plus" is the name by
which certain trade practice in steel
is known. 1t means that all rolled
steel is priced as if it were made at
Pittsburgh. That is, if steel is made
in Chicago, or Birmingham or any,
where else the manufacturer of art
lcles made of steel must pay-not the
freight from the point of manufac-
ture to his own factory, but the
freight from Pittsburgh.
Is this unbelievable? 1t almost
seems so and yet it is true. The
manufacturer of farm implemenst in
Illinois or Indiana, who is close to the
steel mills in Chicago and Gary, must
pay not only the freight from the mill
to his factory but the freight from
Pittsburgh to the mill as we'll, al
though that steel was never hauled
from Pittsburgh to Chicago or Gary,
and although the railroads made no
money for that part of the freight
charge. Consequently, farm imple-
ments cost more. Steel in Kansas
costs about 81 per ton more than it
should, because of an imaginary
freight charge which goes into the
pockets of the steel mills, and is total
ly unearned.
The farmer is the largest consumer
of steel products in the country. It
is estimated that the average Amer
lean farmer uses $500 pounds of
rolled steel annually. The farmer in
the aggregate is the largest TAXPAYER
IN the country and must pay taxes on
all road and building construction for
public purposes.
The roadways-e especially modern
hlghways-use vast quantities of
rolled steel. At a-recent hearing be-
fore a legislative committee, S. E.
Bradt, Superintendent of Highways
for Illinois, estimated that in each
mile of hard cement road, sixteen and
a half tons of steel are used. On this
basis the pittsburgh Plus" exactions
on the taxpayers of Illinois for its
road building program alone, amount
to over $46O,000. 1t is easy to see
how huge this cost is to the taxpayers
of Kansas.
All public buildings nowadays are
large users of steel. Kansas farmers
pay for most of the public buildings
IN this state. They may easily figure
how much the increase in their taxes
Is if they estimate that seventeen and
a half per cent of the cost of the
the steel going into public buildings is
represented by this unearned freight
charge. This also applies to bridges,
steel culverts, road machinery and all
other public work using steel.
And steel touches the farmer at
every point in his daily life. His wire
fencing; his nails; his farm imple-
ments; even the wire springs for his
bed; his stove, and his downspout and
numerous other articles are affected
by Pittsburgh Plus"
And there is a deeper economic
problem involved even than the exac-
tions of this unenarned tribute in the
steel industry. Big business general
" has for some time shown evidence
of favoring the "basing point" system
in many other fields. 1t is trying to
do the same thing in lumber, cement,
grain and other primary necessities.
But a distinct blow at all this has
been struck by western and southern
manufacturers of rolled steel pro-
ducts and the American Farm Bureau
Federation, acting in conjunction,
aided by numerous civic and COM
mercial bodies. A complaint has been
issued by the Federal Trade Commits
sion inquiring into this practice. The
United States Steel Corporation.
against which this complaint is direct
ed, has answered admitting the prac-
tice and admitting that it is not justi-
fed by difference in the cost of pro-
duction between Pittsburgh and other
producing centers..
But it does justify this practice on
the rather strange ground that inter
ference with it would amount to con.
fiscation of its property.
1t is rather a curious reflection on
the workings of the human mind that
corporations which calmly pocket 3
freight charge that is unearned speak
glibly of "confscation," when theil
own confscatory privilege is attack.