The New York herald., 1922-11-27
Another Steel Giant.

ago OF the Lackawanna Steel Com
pany. announces the purchase of the
Midvale-Cambria steel properties.
This great merger, now approximate
ing in economic power though not in
aggregate capital the gigantic United
States Steel combination, may sur
prise the public. 1t was only a few
weeks ago that much the same sort
OF merger fell through because there
was a difference of opinion between
two agencies of the national Govern
ment as to whether it should be per-
mitted. There was every reason.
from the point of view of modern
business development and of sound
economies, why such an achievement
should have been approved and con-
summated, but the two Government
bodies could not see the situation in
the same light.
At that time the Federal Depart
ment of Justice and the Federal Trade
Commission were at odds over the
proposed merging Of the Midvale. In
land and Republic Iron and Steel
companies. The Department Of JUS
tice held that putting the properties
together would not violate the Sher-
man law or the Clayton and the Webb
acts. The Federal Trade Commits
sion, on the other hand. took the
ground that the merger would be
in conflict with the law governing
the powers under which the commits
sion functions. and so the Midvale
amalgamation then came to nothing
through the unwillingness of the
principals to proceed with their plan
in a Government situation SO con-
fused and tangled.
1t was a mistake then for any part
of the Government to oppose the
contemplated merger, a mistake In
respect of the natural development
of the steel business and In respect
of the public interest. 1t would be
a like mistake now for Government
obstacles to be thrown in the path of
this latest merger, which constitutes
the Bethlehem Steel aggregation. with
it's proposed S456, 100000 Of capitali-
zation. another steel giant better able
to meet competition at home and
abroad and so better able to serve
the public in the matter Of making
its steel at fair price.
What THE New YORK HERALD said
early in September last of the pro-
posed mergers then mistakenly op-
posed by the Federal Trade Commits
sion applies now with equal force to
the consolidating purchase just an
nounced What 1t said then was in
part as follows:
''If there were no larger steel
company than either of these COM
panies it might become question
with the Government as to whether
It should favor giant steel corpora
tions But since the country already
has a giant steel corporation this
question can no longer obtain. And
since the giant corporation. by rea-
son of its size and many industrial
plants. and large ore holdings and
own transportation lines. can produce
and deliver steel to various sections
of the country at a lower cost than
smaller concerns with only one or two
producing plants am make similar
deliveries, It is clear that the smaller
companies are not capable OF COM
peting with the giant company on the
same margin OF net profit.
''If this is true. and II undoubtedly
is, the various smaller steel produc-
ing concerns cannot prosper In COM
petition with the United States Steel
Corporation when 1t Is working on a
risfltyor fairly close margin OF profit.
'fThe converse of this is equally
true, that II the smaller steel pro-
ducing concerns are making a good
margin OF profit in competition
the United States Steel Corporation,
charging the same prices is maxi
ing more than handsome margin
of profit.
I'm this situation isn't the consoli-
dation of the smaller companies into
large enough concerns TO compete
with the big concern wholly in the
interest OF the American people?
And IL Il is in the interest of the
American people and II there Is any
technical reason in the present laws
why these cancellations should not go
through, the laws would better be so
amended as to permit OF mergers or
anything else that works to the good
OF the citizenship OF the country"
II IS for this reason that the Gov
ernment and the country should well
come the now greatly enlarged Beth
lehem company. For with its various
and varied plants, railroads, ships,
ore possessions and general equip
ment IT. ought to be more capable
than before OF meeting The first the
giant steel maker OF them all on
something like even terms. In this
way the American public can benefit
as well as the newly merged steel
producers themselves.