The Bismarck tribune., 1924-07-23
STEEL SELLING
PLAN ORDERED
0BECHANGED
Federal Trade Commission
Holds Pittsburgh-Plus
Plan Is Unfair
lessons COMPETITION
Long Controversy Has Ragged
Over Method of Setting
Freight Rate on Steel

Washington. July 23.---The federal
trade commission has ordered the
United States Steel corporation to
abandon the Pittsburgh plus system
of determining the price of steel.
The commission held to be unfair
method of competition the system by
which the corporation and it's subsid-
iaries quote price on rolled steel
products manufactured by and ship
ped from their plants outside Pitts
burgh at a production base price
plus an equivalent to what the
freight charges would be from that
city. The practice thus was found to
be a violation of the federal trade
commission act, and further to con-
stitute a means of price discrimin-
alton in violation of the Clayton act.
The commission held specifically
that the system is contrary to the
public interest, not based on the law
of supply and demand, is a price fix
ing system substitution for the old
steel pools" Gary dinners" and
other methods, and that it is made
possible by the alleged domination
of the steel industry by the United
States Steel corporation.
Lessons Competition
1t also held that the Pittsburgh
plus system lessons and eliminates
competition. retards business in all
steel centers except Pittsburgh, and
adds greatly to the cost of steel
products. 1t adds $3O,OOO,OOO a year
to the cost of steel to farmers in
II western states, the commission
declared.
Commissioner Gaskill filed dis
senting opinion in which he held the
commission to be without authority
to prohibit the steel corporation,
operating its several plants within
the law, from maintaining the same
price at all its plants. While not
specifically disagreeing with the COM
missions findings as to the effect
of the Pittsburgh plus system, he de-
clared the claw does not require ab-
solute freedom of competition" nor
does "the law enjoin the observance
of sound economic principles"
Summarizing in the announcement
of its order what is believed would be
the effect of abandonment of the
system, the commission said it would
build up all steel producing and
consuming sections outside of Pitts
burg; return to the western and
southern steel users the natural ad-
vantages of the location; decentral-
ize the steel industry and industries
using steel products; enforce price
competition among the steel produc-
ers, and eliminate other alleged evils
in the industry.
The commission, in its order, for
bade the United States Steel corpor-
alton or its subsidiaries. from quot
ing any steel price without listing
separately the price Of the steel and
the transportation charges.
The United States Steel corpora.
tion, in the hearings and arguments
before the commission. conterded
that the Pittsburg-plus system was
the result of competition in the steel
industry, and that it was created by
free operation of the law of supply
and demand.
The fight over Pittsburg- plus has
been one of the most bitter ever
waged before the federal trade COM
mission. The entire proceedings was
brought on by the commissions own in
vestigations, and hearings were held
at virtually all steel producing points
Later the fight was centralized here
with attorneys for the United States
Steel corporation lined up against
the commissions attorneys, and at
torneys for 80 associated middlewes ST.
ern states and western steel cOnsum.
ers who Joined in the move against
the system.