New-York tribune., 1922-05-21

h.netion OF the hem-Lackawanna
81, by the stockholders. the Bethlc-
~ steel Corporation is still in dan
:, Of being overshadowed by a new
Imitation and can hardly be ex-
sss..d 10 retain its position as leading
t;sSsnsndent steel manufacturer un-
i.ss ,.s thA so-called 'tsix company
..s,,er reduced to q five-company. af-
a.;, M; through the withdrawal of
Va, yoaa,stown Sheet and Tube on
rs;dsy. fails to materialize. Such a
n.nisussts to the independent COM
S..v merger negotiations.
Tslf Street believes that the pur-
rbsse II third company, such as the
G;dysis Steel and Ordnance Company.
is 1T outside the bounds Of possibility.
The fact that during the past week ne
rotations among tho six companies
were carried on at times and in a place
previously announced, suggested to the
Street that the merger scheme was be-
ins rushed to completion before any
more defcctions could take place.
The action Of Youngstown late in
she week was not a detection in the
tense that the word is used here. The
assumption is that this company with
drew because the negotiations up to
Friday had removed all hone of
Youngstown being admitted to the pro-
POSED combination on what its repre-
sentatives considered an equitable
basis
Previous Negotiations
This is not the first time that the
Bethlehem company has negotiated
autcessfully with the Lackawanna
Steel Company. In February, 1917,
Bethlehem purchased from Lacka~
wanna the Lebanon properties of the
Lckawanna Iron and Steel Company
ind in consequence of this transaction
las been paying interest on Sits 900
d Lackawanna Iron first mortgage
bonds which mature. in 1926. That
purchase was not made on account of
any close relations between the two
companies that have now combined,
but simply because the Lackawanna
Vas moving its principal works to the
Buffalo steel district and had it's Leb
anon plants on the market.
There was nothing in that transac-
ton, therefore, that foreshadowed the
iecently announced combination. If
anything forecast the purchase of
lackawanna in toto by Bethlehem it
vas the negotiations for merger in
1920. The fact that Midvale also fig
ured in the 1920 negotiations is re-
'ponsible for the talk of the inclusion
'f that company in the new combina-
lion. Midvale is one of the parties
. the five company merger negotia-
tons.
The acquisition Of the Lackawanna
Steel Company properties. with their
productive capacity of 1,sea 900 tons
q ingots yearly, gives the Dethlehem
Steel Corporation q capacity of ap
sroxinlately 100000 tons. Bethlehem
is thus assured Of position next to
that h the United States Steel Cor
pasation in the present lineup of steel
producers. The five companies now de-
lbtating on third huge combina-
tion-Midvale Steel and Ordnance, Re-
public Iron and Steel. Inland Steel
Company, the Steel and Tube Com
psny Of America and Briar Hill Steel
have an ingot production estimated
at about 100000.
Complementary Plants
One Of the reasons for the purchase
OF Lackawanna lies in the fact that
Lackawanna is strong in practically
the only branch of steel making that
has been Bethlehems weak spot,
namely, rails. The time had ~lme for
Bethlehem to make itself truly COM
plete unit in the industry through the
construction or purchase of steel rail
plants of size commensurate with