The Washington times., 1922-07-22
X KLAN Is BELIEVED TO BE MAKING IT'S LAST STAND
STEEL MERGERS
. ARE HELD VALID
BY DAUGHERTY
Neither Sherman, Webb, Nor
Clayton Acts Violated, Attor-
ney General Tells Senate.

Sidyton HCts Sio'dtou' Heso
ney General Tells Senate.
The two proposed steel mergers
are not In violation Of either the
sherman, Clayton or Webb acts, At
torney General Daugherty held In
an opinion sent to the Senate yester.
day.
The Attorney General declined to
give an opinion as to whether they
constitute a violation Of the Federal
Trade act.
The two mergers are those Of the
Bethlehem and Lackawanna COM
panies and the Republic, Midvale and
Inland companies. The Attorney
Generals opinion was rendered In
response to a Senate resolution
adopted May IL. calling on him to
investigate the legality Of the merger
plans, and report back. In declining
to pass on the application Of the
Federal Trade act, the Attorney
General said:
"The Senate's resolution is broad
enough to call for an expression OF
my views upon this point; but for
obvious reasons / must decline to
express any.
"The Federal Trade Commission
is alone invested with the power OF
enforcing that act, and as appears
in the Congressional Record, o7th
Congress, I'd Session, p. 8872, ct
ad n
formal complaint against these COM
panies, charging that the proposed
merger is an unfair method OF
competition within the meaning of
section s. The Senate will no doubt
be quick to perceive the impropriety
Of my expressing any opinion upon
the matter"
Senate Given Little Rebuff.
The authority Of the Senate to call
for the opinion was questioned by
the Attorney General, who declared;
AT the outset / think 1t proper TO
call attention to the fact that my
predecessors have consistently ad-
hered to the doctrine that the duties
of the Attorney General are pre-
scribed by statute; that he is a mem
Der Of the executive branch, and, as
such, is under the guidance and su-
pervision of the President: that for
the legislative branch to direct his
conduct is a measurable interference
with the executive branch; and that
he il under no duty to obey the
mandates of one branch Of the Gov.
ernment when not sanctioned by
positive law"
As to the mergers themselves, the
Attorney General stated:
Two separate and Independent
mergers, unrelated to each other in
any way, are in process Of formation.
One is between the Bethlehem Steel
Corporation, owning plants in Penn.
sylvania and Maryland, and the
Lackawanna Steel Company, whose
plant is at Buffalo. The other is be-
tween the Midvale Steel and Ordnance
Company. owning plants in Pennsyl-
vania and in Delaware; the Republic
Iron and Steel Company. owning
plants in Ohio, furnaces in Pennsyl.
vania and Alabama. and certain
plants at East Chicago and Muncie,
Ind, and at Moline, ILL.,, and the In
land Steel Company, owning plants
close to Chicago. II will be conducive
to a clearer understanding Of the
situation IL take these mergers up
separately"
Some Good Merger.
Production by the Bethlehem .lnd
Lackawanna, as compared with total
production by all companies, is set
forth as follows: Pig iron, 1855 per
cent; structural shapes, 21.43 per
cent; plates. 4.73 per cent; rails, q. .ss
per cent; steel ingots, e.7 per cent.
The United States Steel Corporation =
production Of ingots is given as As
per cent.
The opinion holds that not every
contract or combination In restraint
OF trade is prohibited by the Sherman
act. but that 1t applies only to COM
binations and contracts in unreason.
able restraint of trade.
Holding that the Bethlehem
Lackawanna merger is not a viola.
ton Of the Clayton act, the. opinion
sets out that section Z of that act
does not prohibit acquisition Of
physical assets, but only the stock
or other shares Of capital, and that
the Bethlehem in this instance is to
acquire the physical properties.
Holding that this merger does not
violate the Webb act, the Attorney
General says:
These companies are members OF
an association formed pursuant to
the authority granted by this act to
handle export trade
The Clayton act is not violated in
this merger. the opinion holds,
physical assets being acquired out
right.
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