New-York tribune., 1922-07-20
Says 3-Co1npany
Merger Will Not
Hinder Competition
Output Only 7Iz Per Cent
of Total, Declares Chad
bourne After Conference
With u. S. Trade Board

WASHINGTON, July f9.--Following
a conference here to-day between rep
resentatives and counsel of the Re-
public, Inland and Midvale Steel COM
panies and> members of the Federal
Trade Commission on the proposed
tbree-company merger, Thomas =.
Chadbourne, the attorney who nego-
tiated the combine. declared that it
will not disturb competition IN the
steel industry. The output OF the thfee
companies, he saidI Is only 75 per cent
of the country's production.
The conference yesterday was IN
formal although behind closed doors.
and was described as q review Of the
facts further to enlighten members OF
the commission. The three companies,
it was said, already had furnished fig-
ures and data on the merger plan
which would be used by the comnis-
sion to decide on the legality Of the
proposal.
Answer Complaints
The bethlehem and Lackawanna
Steel companies, cited recently by the
commission in bill Of complaint
alleging illegality or their projected
merger, have fled answers. The next
step in this case will be the appoint
mont of a trial commissioner. me
date for the trial Of the case will be
set shortly, it was said at the com
missions office.
Mr.. Chadbourne stated that if the
actual shipments are taken of Midvale,
Republic and Inland which might have
been considered competitive in 1920
and are compared with the potential
competition from all other companies
for the same year, it is found that
unifcation Of the three might have
eliminated competition in structural
shapes to the extent of G5-100 of |
per cent; plates to the extent Of 1.07
per cent; bars $40 of ! per cent, and
sheets 31-100 of per cent.
sin other words" said Mr.. Chad
bourne, "unifcation Of these three
companies would leave the following
the United States in the field Of com
petition: Structural shapes. 99.35 per
cent; plates, 1888 per cent; bars, 1920
per cent, and sheets, 99.69 per cent. 4
"Thc men who are responsible for
this unifcation realize that they can
only hope by the resulting economies
TO cCt off part of the cost diFerential
of from S3 to SIS now enjoyed by the
Steel Corporation, so we have planned
most conservative corporate struc-
t,re in order that our interest charges
shall be lower than the Steel Corpora
tons.
Would C.t Interest Charges
"The basis of the capitalizat ton of
the North Amer can Steel Company in
vo,ves IFS assumption OF the present
outstanding bonds of the three com
panies. No new bonds will be issued.
About 3222,o00 shares of new stock
will be issued, aeainst 3.563.030 shares
of the constituent companies. Addi-
tionai working capital to the extent of
500, ,0oo,C00 cash will be provided by
sale of common stock. Thus upon uni
fcat;on of the properties the total
shares Of preferred and common out
standing will be about 3,812,000, com
pared with the present number Of
shares of the constituent companies,
3,563, 600, and the additional number
OF shares will be accounted for by
S20000,oo0 cash working capital added
to the assets Of the unified company.
This makes our interest charges on
bends and preferred stock about s1.41
per ingct ton, against the corporations
ESQ.,