Evening star., 1923-01-28
TRADE BODY BANS
BIG STEEL MERGER
Bethlehem, LackaWanna and
: MidvaIe Are Cited to- Hear
ing March 18.
IS CONCERNS INVOLVED
Order Declares Competition Will
Be Unreasonably
Reduced.

Merger of the Bethlehem, Lacka
| wanna and Midvale Steel companies
| was declared yesterday by the Fed
| eral Trade Commission to be an un-
| lawful action In restraint of trade
Notice was issued to all the corpora
| tions concerned to be represented a.
| hearing before the commission on
| March 16, prepared to show cause WHY
| an order should not be issued requir
| ing them to withdraw from the
| merger agreements at once. a tots
| of forty-six corporations, subsidiaries
| to the parent companies named, were
| charged in the complaint which the
commission issued with being in
voIved in a general consolidation p!a4.
| which. of carried through, would un
reasonably reduce competition in tn,
supply of steel commodities to cor
sumers in the territory north Of I'll"
Potomac river and east of BuffaI0
" Y, and Johnstown, Pa.
VIII withdraw Prior Order.
| In instituting general proceeding,
against the tripartite merger the
commission gave notice that its
earlier complaint issued after the
Bethlehem and Backawanna com
panies had completed a consolida
tion last April and directed agaIns
| them alone, would be withdrawn.
BY the agreement announced No
vember "a the Bethlehem company Il
| already enlarged by acquisition o.
the Lackawanna, proposed TO acquir,
control of the Midvale properties
and the complaint charged that this
agreement was now being carried into
effect. Under it the Bethlehem com
pany intends to issue s97,65o,000. pa
value, of new common stock, whici
would go to Midvale stockholders.
Would Rival L. S. Steel.
The Bethlehem company. after tue
consolidation, would be, next TO the
United States Steel Corporation, the
largest steel producer in the United
States, with common stock aggre-
eating s1so.250.oo0 at par. preferred
of s62,O0o,o0o and bonded debt Of
s2I3, $500 0oo.
Specifically. the complaint charged
carried out, would result in "poteE-
tial or actual competition existing il
and between the several respondents
being substantially lessened. il not
wholly eliminated" and consequent
violation of both the Clayton and Fed
eral Trade Commission acts. Further
it was said, by uniting under Common
ownership the companies concerned
will control the sale and shipmerr
in interstate commerce of substar-
TALLY large proportion of iron anG
steel products" in the territory pre-
viotsly described, and the potential
capacity TO restrict competition al
legged was declared to be a violation
Of the Sherman antitrust law ~
well.
Van Fleet Dissents.
Commissioner Van Fleet, IL Was
noted in the statement describing the
action, dissented from his associates
The corporations complained againsr
are given thirty days in which to fl p
answers to the allegations listed
Under the merger plan, the Bethle-
great holding company. the commits.
sion said in a statement describing
| the situation against which its COM
plant is directed, controlling fhrso
separate and integrated steel enter
prises, each one capable of turning
out finished steel products from raw
materials.
Each of these three groups-the
Bethlehem, Iackawanna, Midvale is
doc IL Int.
an integrated concern" the statemei,t
said. each having subsidiaries en-
gagged in mining iron ore. coal. Iimc-
stone, and in transporting and as
sembling those raw materials from
which each integrated concern man
ufactures and produces crude. SEM
finished and finished iron and steel
products and commodities. Each
group thus owns and controls ali
stages of the production of the prod
gets and commodities sold by then.
from the raw materials to the SEM
finished and finished products"
Describes Prior Competition.
Tho complaint describes the com
petition existing between the Beth
lehem- m-Lackawanna group prior L.
the first merger and the competition
existing between the Bethlehem,
L,ackawanna and Midvale groups al
the time of the proposed three com
pany merger. Information is give r.
as to the location of the various
plants. their capacities and products
and the percentage of semi-finishcd
and finished steel products produrcG
by the several groups; particularly
in the competitive territory .N,oyc
described.
The complaint then recites that the
Bethlehem, Lackawanna and MidvaIe
groups are the only iron and steel
manufacturers in this particular ter
ritory with capacity of a. million
or more tons of steel ingots per
year. and states that other steel
products in this territory are reIa-
lively small, no more than one OF
| them having a capacity of one-half
million tons of steel ingots per year,
that the steel-producing concerns in
this territory other than the merging
groups are not thoroughly integral
ed-that is, they do not own their
own iron ore, coal and limestone as
do the merging companies.
Nearest Competitor at Pittsburgh.
The complaint states that the par
ticular competitive field involved
that is, the territory north of the
Potomac river and east of a line
drawn north and south through Buff
falo, n. Y, and Johnstewn, Pa--is.
large and populous' section of the
country. with g great demand for
nearest steel production section TO
this territory, exclusive of. the meER-
ing companies plants, is, Pittsburgh,
Pa, with respect to. which the merg-
ing companies have a'1frefght dis
tributive advantage in their own
territory. as described; Of from 81
to So q ton ever the steel PRO dlfcers
in and around Pittsburgh. Z
:.
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