The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-10-30
Eastman Rejects Bid of
S37. rs a Ton for Rails

authorized by President Roosevelt
to say that the government is I'M
willing TO loan money to the rail-
roads for the purchase of rails with
out some safeguard to the consumer
and the public interest rs a sub
stitute for the competition which is
absent.
Such a safeguard, 1t was pointed
out, would be provided by an ex-
animation Of the books and cost
records of the steel companies by
government accountants.
Under existing conditions, and to
avoid possible delay" a summary Of
the administrations position stated,
the government is willing to loan
the necessary funds without suhc an
examination if the price for first
quality rails is reduced to S35.
If steel companies will not make
this concession, the government will
make the loans only if the steel
companies retile the new prices I'M
der the code, accompanied by a
stipulation that if the President.
after government accountants have
had full and free opportunity to ex-
anime the books and cost records.
finds that the prices should be re-
duced to make them fair, then the
reduced prices so named by him
shall be effective to the same extent
and from the same date as if they
had been originally filed.
In the meantime, the government
will advance funds on basis of S35.
adjustments up or down to be made |
later in accordance with the Presi-
dents findings"
Code Violation Feared
The co-ordinator made public let
tiers written to him Oct. 20 bv w
A. Irwin, president of the United |
States Steel Corporation; Paul Nc
Kali, vice president of the Bethle-
hem Steel Company; L. c. Block.
chairman of the Inland Steel Com
pany, and Arthur Roeder, receiver
for the Colorado Fuel Company. |
These four companies are the only |
manufacturers Of steel rails in the |
country.
Mr.. Irwin, in his communication.
stated that counsel had advised him |
1t would be violation of the steel |
code to quote a price not in accord
ance with the filed base price list.
He added that the company was
willing to make reduction to $37.75
ton, with the understanding that
1t is temporary.
The letters of the other three
companies also quoted the $3.50
figure.
Mr.. Eastman's reply, written last
week, declared that the steel COM
panieS' letters bear a common date
and identical price, and point I'm.
mistakably to the conclusion that
the letters were the result of con-
sultation and collision.
He emphasized that there is
nothing in the steel code which
made necessary "such a deviation
from the understanding, which the
steel companies had with Presi-
dent Roosevelt for the submission
of base prices Independently of each
other and without collision and
consultation,
Cut From $40 Figure
Last week, Mr.. Eastman an
nounced that he would issue a state
ment shortly on the steel rail situa-
ton and it was rather generally ex-
pected that he would seek more
favorable bids from the steel COM
panies.
The controversy goes back to last
month when the administration an
nounced a program to finance pur-
chaSes Of rails by the nations rail-
roads If the prce was reduced from
the then prevailing figure of $40 a
ton. There are four units in the
industry engaged in the manufac-
ture of steel rails. They are U. S.
Steel, Bethlehem Steel, Inland Steel
and Colorado Fuel g. Iron.
After the project was announced
representatives Of these companies
were called to Washington to confer
with the President on details.
At first steel companies were re-
Iuctant to quote a price lower than
$40, maintaining that the making
OF steel rails was a highly special
lzed process entailing high costs
Finally, however, they relented and
shaded the $40 quotation by 1925 a
ton.