Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-07-30
Three Big Corporations.


An investigation of reported buying
Of United States Steel stock by mem
bers Of the du Pont family. which con-
trolls one of the largest industrial or
ganizations in the country, has been
ordered by the Federal Trade Commits.
sion with a view to determining
whether such ownership of steel stock
is inimical to the public welfare. The
du Pont corporation is already large
holder of the stock Of General Motors
Corporation. rated as one of the world
greatest concerns. The purpose of the
Federal Trade Commission, it would
seem, is to ascertain whether there
Is in contemplation a merger or ANAL
gamation or working community Of
interests between these three COM
panies.
The antitrust laws are designed to
prevent the formation of monopolies
that may control prices. They have
been invoked heretofore to break up
combinations that have gained such
command of certain lines of produc-
ton and marketing as to enable them
to determine the rates at which the
public may obtain supplies. 1t has not,
however, been possible, under these
statutes to prevent the concentration
of ownership in single corporations in
O. few hands. Nor has it been possible
to prevent the diversification of in
vestments by individuals, whether as
ISOLATED or separate. 1t remains to be
seen whether this present movement
Of stock buying by a family group, al
ready in control of one important and
widely diversified line of production
and a large holder of the stock of
another corporation which is the
acknowledged leader in the motor
making field, constitutes breach of
the law calling for restraint.
General Motors, making not only
motor cars of wide range Of style
and price but other commodities of
products. 1t is a large user of steel.
The United States Steel Corporation is
likewise a large user Of du Pont prod
ucts, as the du Pont corporation is a
large user of the steel company's prod
ucts. Thus there is undoubtedly a
community Of interests between these
three corporations. 1t does not neces-
sarily follow that a close ownership
relationship between the three, how
ever, affects the public welfare. The
Federal Trade Commission is about to
inquire into that question.
Just how far the law against the
formation and maintenance of trusts
or monopolies can go to dictate the
limits Of private investment is in
volved in this inquiry. 1t is a matter
Of public record that large, though
not a majority, block of General Mo.
tors stock is held by the du Pont cor
poration, not as individuals but as a
company holding. Thus there is a sub
sidiary relationship between the two
corporations, the business Of which is
connected, but not competitive. The
present buying of steel stock is by du
Pont individuals. With the exception
of du Pont stock, the voting securi-
ties of the corporations involved are
widely spread. Control is exercised by
groups OF holders. If there were a
prospect that the du Points, already in
control of their own corporation, were
TO gain a group supremacy in steel or
motors, or both, there would then be
presented a situation bearing the as
pect Of trust creation, through the
ownership of all three Of the country's
largest industrial corporations.
This case will afford an opportunity
for the Federal Trade Commission,
which is very active already in various
fields Of investigation, to analyze a
situation of great interest to the Amer
lean public, which consumes the
greater part of the products of all
three of these big business concerns.