Evening star., 1933-10-29
STEEL RAIL FIRMS
GIVEN ULTlMATUM
TO LOWER PRICES

Continued From First Page)
such as capital investment and return
depreciation on the plants and the like
were not taken into consideration, "a
very small profit" could be shown al
$35 ton.
Former Prices Higher.
Prior to the initial vvertures by the
rail purchases, the companies quota
tions ranged from $42 to $44 a ton. The
White House considered these too high
and steel heads were asked by President
Roosevelt to make an offer.
If the bids had been acceptable there
was the prospect that the railroads
might buy 100000 tons-or $28, ,000. 900
worth-within the next few months
Their production capacity was put at
around 100000 tons a month for all
plants running full speed.
Asked if differences over steel prices
had arisen in connection with the Gov
ernment's $3.50, 100000 ship building
program, Navy 01lClaS said NO." one
high officer adding:
Before our contracts were let, there
was q thorough understanding the work
would be no Ell Dorado for the steel in
dustry-and We had as an aid the in
dustry's knowledge that the whole pro-
gram could be carried on at Govern
ment shipyards and bids forced in line
II necessary"
May Affect Program.
Recovery officials were following de-
velopments closely because they felt
other sections Of their general program
might be affected.
Leaders in the steel industry were
expected to have an opportunity to talk
over things with Mr. Roosevelt tomor-
row, when they will meet with the Chief
Executive to discuss the operation under
the coal code of mines owned by them.
Eastman, in making public letters
from the steel companies and the ad-
ministration's answer. said the Govern
ment was ready to authorize loans to
railroads from public works funds at
s35 a ton without having to go into
company books. He continued:
I'm view Of the circumstances Of the
past history Of steel prices and what Is
known about them, he (the co-ordi-
nator) is authorized by the President
to say that the Government is unwin-
ing to loan money to the railroads for
the purchase of rails without some safe
guard to the consumer and the public
interest as a substitute for the COM
petition which Is absent.
Power to President.
Such a safeguard would be provided
by an examination Of the books and
cost records Of the steel companies by
Government accounts.
IT the steel companies will not make
this concession ($35 a toni, the Gov
ernment will make the loans only II
the steel companies reflle the new prices
under the code, accompanied by a stip-
ulation that, II the President, after Gov.
eminent accountants have had full and
free opportunity to examine the books
and cost records, find that the prices
should be reduced to make them fair
then the reduced prices so named by
him shall be effective to the same ex-
tent and from the same date as If they
had been originally filed"
Eastman, acting for President Roose'
welt and the Public Works Administra.
ton, on October 3 asked the steel COM
panies to bid on the steel.
He pointed out in his letter that thu
steel company heads, In conference with
the President, Secretary 1ckes and him
self had agreed not to consult on ths
price but to bid independently.
$37.75 . Ton Bid.
Four companies owing rail mills-tht
United States Steel Corporation, thl
Bethlehem Steel Co., the Inland Stee
Corporation and the Colorado Fuel &
Iron Co.-submitted bids in letters ans
kilograms dated october 20. In each
instance the base price for first-quality
rails was $3775 ton.
The prices were filed with the Amer
ican Iron g. Steel Institute, the fair
practice code authority, because. thu
companies said, their attorneys had ad'
vised that to fail to do so would be Z
violation of the N. r. A. steel code.
'"The fact that these letters bear {
common date, that they name AZ
identical price for first-quality rail
lf.o.b mill, and that this price Is the
odd figure Of $37.75, point ,lnmistakably
to the conclusion that the letters wer'
the result Of consultation and collu'