Evening star., 1924-07-27

~ in intensity the greatest cor
n poration fights that have ever
been waged before the United
States Supreme ourt, is threatened
as the forthcoming development in
the outstanding surprise of the last
few days of government proceed
ings-abolishment of the Pittsburgh
plus price as basis for steel prices
all over the United States. Time
| honored and regarded for years as
thorn in the side of the Midwest
and Far West purchaser of steel. the
| Pittsburgh plus system of rates for
steel west of the Alleshenies has
been completely upset by an order
sion enjoining the United States Steel
Corporation that it must, effective
| Immediately. abandon the fictitious
freight rate basis on which it sells
steel from its mills at Chicago, Mil
! waukee, Birmingham and other
i points. The commission went fur
| ther than holding the system to be
mere system II prize discrimna-
lion. 1t also held that use u Pitts
| 9hrgh as basing point for steel
| tTld a points outside of Pittsburgh
lad adding the fictitious freight rate
! Hm Pittsburgh to the point OF sale,
| ~ 1t III Nebra ka and the steel man.
] Iactureo In Chicago, was an unfair
; inethod OF competition, in violation of
| the Federal Trade Commission Act
Struggle Is Expected.
! Although no indication has been
| Forthcoming from that giant among
American industrial concerns. - the
United States Steel Corporation
there seems little question in the
minds of men familiar with its
! methods in Washington that it will
give up without a struggle the favor
able and discriminatory" Pittsburgh
plus system. There is ample prece-
dent that the steel corporation hear,
| en- by the Federal Trade Commission
which has no power of enforcement
| VIII take an appeal to court and will
carry its case to the Supreme Court
of the United States. if necessary, in
order to retain the old established
and favorable Pittsburgh-plusr rate.
In nutshell. the Pittsburgh-pIus
system works in this way: 1t is used
by the United States Steel CORPORA
| tIon and its subsidiaries in quoting
| prices on rolled steel products manu-
factured at and shipped from their
! plants outside Pittsburgh at a Pitts
burgh base-price plus an amount
equivalent to what the railroad
| freight charge on such products
would be from Pittsburgh to the
! customers destination if such prod
ucts were actually shipped from
! Pittsburgh.
| Under this system the corporation
pays the actual freight charges on the
! products from the mills where the prod
ucts are manufactured to the Gus
! toners destination but the customer
pays the freight from Pittsburgh.
! In other words, if a builder in Oman
buys structural steel from the Chi
cago mills of the company. he pays
Il freight rate as if the product were
being sent all the way from Pitts
burgh.
Practice Discriminating.
The commission, in a case initiated
by itself, found this practice dis
criminatory and prejudicial in no un-
certain terms. Among other things.
il found that it is contrary to the
public interest. that it is made pos
sible by the dominant position occu-
pied by the United States Steel Cor
| poration. that it lessons and elimi
mates competition and destroys compet-
| itorS; that it is price dscrimina ton not
made in god faith to meet competition;
| that it retards business in all steel cen
ters except in Pittsburgh. that it adds
, unnecessary millions of dollars an
| nually to the cost of steel products,
| and lastly, and most important to the
! middle west user of steel, it specifi-
cally adds s30,000,000 to the cost of
steel products paid by farmers in
| eleven western states, besides in
creasing prices generally.
| That the findings of the commission
Pleased the indeD endent steel producers
/ is an open secret. for. if enforced, the
| ruling of the commission will throw
steel again on the open market, minus
| the discriminatory price arrange
ments which have been in effect for
so many years. And the United States
! Steel Corporation regards the find
ings as highly important also, for
Judge Gary has characterized the
| case as the greatest lawsuit before
! the country
So widespread had the feeling
against Pittsburgh plus become over
the United States generally that 81
States joined in an association to
fight the practice, engaging attorneys
and sending their own State officials
to Washington to appear in the
lengthy and involved proceedings be-
fore the Federal Trade Commission
| which have resulted in the abolish
ing order. These States are Ala BAN
Arizona, Colorado, Delaware, Florida
Georgia, Idaho, Illinois, Indiana,