Evening star., 1934-05-21
MONOPOLIES FOUND, PARTICULARLY
IN STEEL, MOVIE, COAL PRODUCTION
Pay Held Tagging
as Lining Cost
Increases.

large and small enterprises, but
wherein, as a matter of fact, the vot
! ing arrangements really leave the
small enterprise at the mercy of the
large.
Each member has one vote for each
s500,000 of invoiced product for the
year. The total number Of votes is
reported to be approximately $4,000,
of which the five largest companies
have 1858.
BY this system of voting the board
of directors of the Iron and Steel
Institute is chosen. Since this same
board Of directors was constituted
the code authority for the steel in
dustry. and this authority made the
code and now administers it in the
interest of the larger companies in
control of the Iron and Steel In
stitute, it is obvious that We have
here body not only perfectly
equipped to exercise monopoliStic con-
troll, but is endowed with extraordinary
powers incompatible with the ideals
heretofore entertained in free
country.
Price Fixing Protested.
One of these powers, exercised in
a way that has produced many and
bitter complaints from small enter
prises, is that Of arbitrarily fixing
prices for the advantage of the large
companies. Another is q rule that
forbids the enlarging Of the produc-
ing capacity of any unit in the in
dustry.
Both of these conditions seem to
us harmful, monopolistic and oppres-
siye, and in both respects the code
has operated to augment the evils
previously existing.
The Federal Trade Commission re-
Gently made an exhaustive study of
the steel industry and presented q
report that held it to be essentially
monopolistic and unfairly conducted.
At the outset of the hearing by this
board. April 4, this report of the Fed
eral Trade Commission Of the steel
industry was offered in evidence and
admitted.
On April II the chief counsel of
this board was called on the long dis
tance telephone from New York by
the chief counsel of the code author
ity directorate of the Iron and Steel
Institute), who protested against the
inclusion in our evidence of the Fed
eral Trade Commission report on the
ground that 1t was "a tissue Of false
hoods" and demanded opportunity to
appear before this board and demon
strate the falsity Of the commissions
findings.
This was accorded and the board
held hearings on April 10 and 20 for
the purpose Of allowing counsel for
the code authority directorate Of the
Iron and Steel Institute) to disclose
wherein the commissions findings
we're unfounded.
Dallying Charged.
The first day was consumed by
counsel in readings from the code. a
copy of which lay before each mem
| ber of the board, in explications of
the obvious and in dissertations upon
the insignificant. No witness was ex-
amined nor evidence presented. At
the second days hearings, this course
being pursued through an apparently
endless maze of verbiage. counsel for
the board objected and asked that
| some facts be presented.
The chairman ruled that every op
portunity be given to counsel for the
| code authority directorate of the
Iron and Steel Institute) to present
the case for the industry, but that at
| the rate of progreSS so far achieved
years would be consumed in appar-
emily fruitleSs discussion. Counsel for
the code authority protested at each
step, but finally called witness that
he questioned.
The nature of the questions and
their long -drawn-out and dilatory
answerings strengthened the impress
sion that the code authority was
merely seeking to consume time.
When the hearing adjourned at 5
pm, the only witness summoned by
the counsel for the authority was still
on the stand and his cross-examina-
ton by the counsel for the board was
hardly begun
Steel Counsel Withdrawn.
1t was agreed that the hearing
should proceed on Tuesday, April "a.
but on April % the counsel for the
board received letter from the chief
counsel for the authority directorate
of the Iron and Steel Institute) say
ing that as the board was manifestly
unwilling to grant to the authority
sufficient time to make a proper
presentation of its cause. his clients
| had instructed him to withdraw from
the case.
| No further hearings have been held
in this industry. The board re-
quested the counsel for the authority
to allow the cross-examination in
terrupted on April 20 to be resumed
and continued, but this request was
not complied with.
1t also sent a representative to
the office of the authority in New
York with a request that this repre-
sentative be allowed to examine the
| minutes and records of the authority,
but this effort again was unsuccess-
full.
No conclusion was left to the board
except that the industry (Which Is
controlled by the Iron and Steel In
| stitute, the directorate of which in
turn constitutes the Code Authority
did not answer the charges of the
Federal Trade Commission because
no answer was possible and the dila-
tory proceedings before this board
were but play-acting for the purpose
of creating the impression that the
| board was unjust.
Basing Point System Hit.
At the hearings held by the board
it was impossible to escape the con-
clusion from the testimony offered
that the misfortunes Of the small
enterprise in this industry were multi
piled by the grotesque absurdities OF
what is called the "basing point" sys-
tenn or phantom freight rates.
| The origin of this huge evil was
the insane practice Of the railroads
in wrenching freight rates out of their
normal relations to obtain competitive
shipments or favor competitive enter
prises, but the present extent OF the
\