New-York tribune., 1922-06-06
Formal Complaint Filed
AgainstBethlehcm-Lack-
awanna Deal as Danger
Gus to Public Interest
To BE Enjoined if
1t Is Found Illegal
3-Company Midvale Com.
bine CloselyScrutinized;
Report TO Senate Later

From The Trib.Te's Washir0foa BYrccu
WASHINGTON, June 5.-Tho Federal
Trade Commission in a formal COM
plain, issued to-day began proceedings
against the proposed Bethlehem Lacka-
wanna steel merger. AZ the same
time IL is giving careful attention to
the proposed Mdvalc- Republic Inland
merger
The complaint against tho Bcthle-
hem-Laekawanna combine is 10 test
the legality OF the proposed merger
and Is preliminary to taking steps 20
prevent the combination il Il is found
10 be in violation Of law.
Announcement OF the action Of the
commission was made in a report 90
the Senate in response 10 the recent
resolution Of Senator La Toilette di-
reeting the Trade Commission and the
Department OF Justice 10 inquire into
the combination. The commission saws
u had tho proposed merger Of steel
companies under observation before
the Senate's action was taken. The
commission says it had reason 70 be-
lieve that ths proposed Bethlehem
Lackawanna merger. when consum-
mated. will constitute an unfair method
OF competition. in that IL contains n
dangerous tendency unduly 20 hinder
competition and n restrain commerce,
and that a proceeding By the commits
sion IN this respect is in the public
interest"
VIII Report on Second
"Details OF this plan. however" the
commission says further, "are being
carefully followed. and as soon as the
committee is in possession Of sufficient
information II will make further re-
port 10 tho Senate rs 70 the second OF
these proposed mergers"
In proceeding 10 find out whether the
merger Of the Observation-Disclosures
is legal and 10 prevent IL il il is not.
the commission feels IL Is on solid legal
ground. A decision OF the Court OF
Appeals recently in the case Of the
Aluminium Company Of America is
cited as indicating that It's course will
have the backing Of the courts II there
is litigation.
Senator In Toilette to-day expressed
himself as we'll satisfied With the >'ior
OF the commission. He said the Attor-
ney General had not yet been heard
from. He expects 70 discuss the report
Of the commission In the Senate
Chairman Gaskill. Of the Trade Com
mission. after saying the commission
baa koA Tho ~ tho efarl .
panies under observation for months,
continued:
Subsequent TO the adoption OF tho
resolution in question it became ap-
parent that the movement toward a
merger in the steel industry had taken
on the form Of combination OF the
Bethlehem Steel Corporation and its
subsidiaries with the Lackawanna
Steel Company and IFS subsidiaries on
the ono hand and a like combination
Of the properties Of the Midvale Steel
and Ordnance Company. the Republic
Iron and Steel Company and the In
land Steel Company. these three latter
companies proposing TO form new
corporation 10 bc known as North
American Steel Company.
fractlcally AomPicteu
THE NEUTRALITY-SUSPICIOUS. merger
has advanced 10 a stage where IL IS
practically complete except for the
necessary ratification by the stock
holders of the two companies, and we
are informed that this remaining de-
tail will be completed as soon as
possible.
"The Federal Trade Commission had
considerable information already at
hand with reference 20 the position Of
the Bethlehem Steel Corporation and
its subsidiaries and tho Lackawanna
Steel Company and its subsidiaries in
the steel industry and the relation Of
each 10 each other and 70 competitive
conditions in the steel market gener-
allv. This information has been sup
plcmcnted by inquiry and research,
with the result that the Federal Trade
Commission. upon the information be
fore IL, has reason 20 believe, IN the
language Of its constitutent act, that
the proposed Bethlehem Laokawanna
merger when consummated will consti-
tute an unfair method Of competition,
in that IL contains n dangerous tend
ency unduly to hinder competition and
10 restrain trade and commerce, and
that a proceeding by the commission
in this respect is in the public interest.
an this aspect under its constituent
ac, il becomes the duty Of the Federal
Trade Commission 20 issue its com
plant and 20 state is charges In
that behalf. The Federal Trade Com
mission therefore issued its complaint
directed to the Bethlehem and Laeke-
wanna companies on Saturday, June 3.
and for the further information Of
tcoaunusd On saso ,hnO