Evening star., 1924-07-27
STEEL PRICE WARFARE
U. S. Arrayed Against Trilst-What 'sPttsburgh
Plus Means.

! Iowa, Kansas. Kentucky Louisiana,
Maine, Massachusetts, Michigan, Mis-
| sissppi, Missouri, Montana, Nebraska,
Nevada, New Mexico, North Dakota.
! Oklahoma, Oreagon, Rhode Island,
| South Carolina, South Dakota, Wis
consin and Wyoming. Four of these
States, Illinois. Iowa. Minnesota and
Wisconsin, acting under special leg
isative authority. filed briefs and
presented arguments before the com
mission.
Several Courses Open.
Several courses are open TO the
steel corporation. 1t can Immediately
begin legal proceedings, taking an
appeal to the Court of Appeals; it can
| begin partial compliance with the or
der, or it can disregard the order en-
tlrely and proceed as before, baSing
the price of delivered steel on the
| Pittsburgh rate. That il will take
the latter course is hardly conceiv-
able, but if it does, the commission
| may institute injunction proceedings
to enforce its order.
The practical effect of the order
will work out as follows if complied
with by the steel company: 1t will
| build up all steel producing and con-
suming sections outside of Pittsburgh
which are now held back by that sys-
TEN; Will return to the Western and
| Southern steel users the natural ad-
! from them by the system. 1t was
| found that the plus system permitted
! the Pittsburgh competitors of the
! Western steel Isers to share the
! Western territory but prevented the
! Western steel users from sharing the
i Pittsburgh territory and prevented
| the Western users for the most part
from competing east of their plants.
Elimination Of the system. the COM
mission held. ',ives Chicago steel
users the same advantage in their
territory which "a Pittsburgh steel
users would have in the Pittsburgh
! territory. 1t VIII decentralizc the
| steel producing industry and dcccn
tralize the other industries which use
! steel i'll the manufacture Of their
| products. which may work to the dis
| advantage of Pittsburgh. but Will
| benefit the country generality; Will
Eliminate useless cross hauiS by the
roads of steel which now exists undrr
| the plus system, will eliminate dis
criminatory prices charged by the
steel producers to the consumers Of
| the same mill and enforce price com
petition among the steel producers
Must Reveal Prices.
Many Western steel plants which
have been destroyed by the PITTS
| burgh llus system. will again be abba
| to open. if the order is followed. while
| the price conCcalment of the discrim-
I
| various customers of the steel cor
poration under the plus system Will
| be eliminated. In addition steel pro
| ducers will ht forced to disclose eA-
actly how much they charge for steel
| and how much for actual freight, and
it will prevent them from charging
| any other fl eight than actual freight
| on their steel.
Now, there may he u fear that abol-
| iShment of the system viii result in
great business changes in an indus
| Try turning over billions of dollars
| annually. This fear is sroundiesS,
/ the commission holds. for it says tina
| while the elimination of the Pitts
| burgh plus system will revolutioniZH
marketing conditions in the steel III
/ dustry, there is no reason for any
| fear that business conditions VIII be
| unduly disturbed thereby, netting tina
| no other industries u.s. system
| analogous to Pittsburgh rtuS, and all
other industries are able l" get along
| without it. As an indication that
! business will not he disturbed, the
| commission points out that ittSburSu
| plus was abandoned during the war,
| being put back before the wal closed
| on the advice of Judge Gary, and no
| disturbance was noted.
Origin of the system.
The Pittsburgh plus system orig
| mated in 1903 after the formation ot
| the United States Steel Corpora ton.
| 1t began at that time as d basis for
| the price-fxing agreements of the
| pools and trade meetings. After that
| it was used as the basis for the uni
! form Pittsburgh plus prices developed
out of the Gary dinners. and after the
| latter had ended, took the place OF
! the pools. price-fixinS trade meetings,
| etc
| The fictitious freight rate steel
users have been paying under the
| Pittsburgh plus system has been
| illustrated by the commission in
| few instances. For example. on the
| new Federal Reserve Bank Building
in Chicago, the imaginary freight on
the steel alone amounted to more
| than $4,000, which went to one Of
| the steel companies Joined in the one
| large corporation. In five years the
Mauitowoc Ship Building Company
paid the Illinois Steel Company $140.-
600 as imaginary freight which the
| United States Shipping Board and the
| Federal taxpayer had 10 pay in the
| last analysis
Proceedings before the commission
in the case lasted many months and
! much expert testimony was heard on
both sides. more than 125 witnesses
appearing for and against continual
| tion of the practice.