Evening star., 1923-12-07
PITTSBURGH PLUS
PLAN ABOLISHED
Chicago Concern May Cause
Revolution In Prices in
Steel Industry.
by. j. c. ROYLE.

Sperial II spatch 10 The Star:
NEW YORK, December An
nouncement today by the La Sale
Steel Company of Chicago that SO
far as its products were concerned
the Pittsburgh plus" system OF
prices had been abolished was re-
earded today as having opened the
door TO wider competition in the
steel trade of the country. This was
the first formal announcement by. an
important steel producer that this
ancient trade practice no longer
would be observed in the midwest
steel center.
pittsburgh plus" means simply
that steel in other centers, Chicago.
for example, has been sold on basis
of the price at mills In Pittsburgh
plus the freight rate from Pittsburgh
to the point u sale, although the
steel sold MY have been produced
at the po'It Of sale. A suit TO force
the Abandonment of this practice now
is befsre the Federal Trade Commls-
sion for consideration.
Chicago's Largest Producer.
The La Sale Steel Company is the
largest producer in the Chicago DIS
trirt of cold drawn screw ana alloy
steel and shafting, turning out ABOUT
900 tons annually, or about 10 per
cent Of the country's outturn of this
class of goods. The Pittsburgh base
price on this class of products mas
been S3 a hundred pounds. or 500
ton. The Chicago price under iitts-
burgh plus" has been $3.50 ton.
the freight rate from Pittsburgh to
chicago being $3.50. The La Sale
Company announces that hereafter 1t
viii sell its products on a "ohicaso
base" at the "Pittsburgh base" price,
that is $50 q ton. w. 5. Leeds. presi-
dent Of the company, added that this
would constitute the settled policy or
his company.
Chief Tses OF Products.
The products made by the La Sale
Company are largely used in the pro-
duction of engines, agricultural i'm
plements. gas engines. automobiles
and screw machine products. one or
the larger markets for such products
IS Detroit and western manufacturers
today expressed the belief that as
result OF this change OF policy they
would be able to enter that market
and others on equal terms with east
ern manufacturers.
The western users of steel point
out that while the products of the
La Sale Company are specialties.
the new practice probably will affect
the steel trade generally. since they
are manufactured largely from steel
bars. The latter have not taken the
full pittsburgh plus" rate for nearly
two years. For a time plates. shapes
and bars We're sold in the Chicago
district on Chicago base" or an
equality with Pittsburgh. This. how
ever, was not announced to the pub
lie. but simply was practiced IN
trade circles Later a differential of
81 a ton was adopted on plates,
shapes and bars instead of the frelght
rate from Pittsburgh to chicago or
$3.50 ton. Other steel products.
however, have maintained the full
G1fferential of $3.50.
Others to Give Up Plan.
Several manufacturers of speciaities
are known to be contemplating the 1ol-
lowing of the example set by the La
Sale Company, and since they are de-
pandent for their basic steel II is re-
carded as possible that the La Sale
announcement may have been a feeler
extended to test out possibility or COM
plete abandonment of the "Pittsburga
p,us' system, in view OF the wide oppo-
sition TO it. There now are thtrty-two
states banded together through their
governors and attorneys general In an
association to fight the continuation OF
the practice.
Agricultural implement manufacturers
are especially interested, since the!T
markets have been seriously atectea
by the low prices obtaining for farm
rroducts, while their costs of produc-
ton have mounted rapidly for both
labor and material. AS consequence
the cost of farm implements has seemed
abno1mally high to the agriculturists,
who nave purchased only as necessity
demanded