The Lake County times. [volume] (Hammond, Ind.) 1906-1933, 1922-05-24
ROTAR|ANS
HEAR DEBATE
IN HAMMOND
Question of Abolishing
Pittsburgh Plus En-
crosses Rotary Club.

The Hammond Rotary club heard
most interesting debate yesterday
between Roscoe Woods, affirmative,
and Herman Poppenhusen, negative.
on the question OF "Abolishing
r.ttsburgs Plus"
Woods debated the history Of the
steel industry which started at
Philadelphia, later established itself
at Pittsburgh and more recently has
developed large productive capacity
IN the Calumet district.
The reasons for the location Of
industry in this district are due to
being close to raw materials. close
TO the center of population and in
dustry. and good distribution facili-
ties, and these result in the produc-
ton OF steel in Gary and Chicago
approximately Is per cent. cheaper
than at Pittsburgh
The so-called method of selling
known as Pittsburgh Plus" origi-
mated about 1901 and means that in
competitive markets practically all
steel is sold as though II originate ed
at Pittsburgh.
He stated that the actual effects
of this plan Of selling is to place
tariff barrier around Chicago and
western fabricating plants. accord
ing 10 the testimony of several To-
cal firms such as Graver and Keith
Railway Equipment Company re-
garding the difficulty OF competing
under these conditions. He used
certain comparisons to show the
cost of the delivery OF fabricated
products at intermediate points such
as South Bend, Indianapolis and De-
troit.
Herman Poppenhusen, in the re-
buttal, acknowledged the state
ments presented by his opponent
but asserted that the situation was
entirely logical based upon the law
OF business applicable TO every
business: namely, the law of supply
and demand
He stated that Chicago territory
and its tributary district lying west
and southwest was only producing
J.
The balance OF the requir ements
were furnished from Pittsburgh and
of course the Pittsburgh operators
could only quote cost price plus
freight to Chicago.
This condition is analogous to
other staple markets such as wheat.
cotton and corn on which the price
Is based on such distributing points
as Chicago, New Orleans. Omaha
and Kansas City.
During times when there is vory
little demand for steel, it is quoted
in the local territory. to be deliver
ed from local mills. at Pittsburgh
He stated that should the Federal
trade commission abolish the pres
ent method of billing. 1t would re-
appear in different form as the local
manufacturer would always sell at
the price established by his com
petitor. The only way to prevent
this would be for the commission
to attempt price fixing which. OF
course, IS illogical and antagonistic
10 good business.
1t was indicated by the subse-
quent discussion that II the local
mills can produce for $500 per ton
less than Pittsburgh mills and then
sell this steel In the. local markets
at price equivalent to bringing
steel in from Pittsburgh, they viii
receive approximately $1,000 per
ton more than their competitors in
Pittsburgh. The proper deduction
from this is that the district is des-
tined to be further developed in
steel production on account Of this
excellent profit and should the pro-
duction exceed the requirements.
eventually the competitive price
will be based upon local production
and not upon national pro-
duction.
Several members asked questions
relative to the discussion but there !
was no consensus Of opinion. regard |
ing the matter.
There was a large delegation Of |
Rotarinns from Gary present. in
Guiding w. g. Gleason Gary Millss |
Captain Norton. Gary Land Com
oany. also Colonel Riley and c. A. !
Westburg Of East Chicago.