The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-06-02
Liberal Viewpoint
by DIR. HARRY ELMER BARNES.

TT is something amazing that the barrow re-
L port alleging a monopolistic tendency in the
NRA should have caused so much surprise or in
dignation.
The great majority of economists are in
agreement that the best test of the existence of
monopolistic conditions and powers is the ability
of the united concerns to control prices of the
commodities produced.
The fact that some time ago the major steel
rail producers of the country submitted identical
bids in response to the governments proposal to
purchase such supplies for the railroads should
have been sufficient to indicate monopolistic
control and practices in the steel industry.
Further evidence on this subject is furnished
in an excellent article in The Nation which de-
scribes the steel code as "the Magma Charta of
monopoly" The Nation article thus describes
the general philosophy which lies back of the
steel code:
During the feverish days when leaders of the
steel industry were discussing the proposed code
OF fair competition prior to its submission to
the R one of the lesser rulers asked one of
the greater ones to explain a certain obscure
provision.
TIM latter replied without a moments hest
Il tation: There is no mystery about this
code! 1t just means that the industry is going
to be run as it always has been run, only more
So The last three words furnish the key to an
understanding of the steel code, and, indeed,
W 80 III b11C OdOlC UllllOSODIV Ol
the industry for the last three decades.
'"This philosophy always has placed primary
emphasis upon preservation of the status quo in
prices, in production, in markets, and in the
corporate and geographic structure of the in
dustry."
The technique through which the steel code
brings about the monopolistic achievement of
price fixing is well-nigh perfect and fool-proof.
The voting of the participants in enforcing
the steel code is based upon the volume of sales
OF steel products. This means that the code
administration is controlled by not more than
three of the largest steel concerns in the coun-
try. The government representatives on the
code authority have no authority to veto or
modify the action of the steel industrialists.
Every steel producer must file a quotation of
prices on every product of his concern with the
board of directors Of the American Iron and
Steel institute which is the code authority of the
steel industry.
TN order to facilitate the fixing of uniform
l. prices, these price quotations must be filed
in relation to certain common "basing points"
designated in the code. They can not be prices
quoted at individual steel mills.
a ten-day waiting period is described, during
Which oil competitors are informed promptly of
the prices quoted by any producer.
II the board Of directors Of the Iron and
steel institute regards the price quoted by an
individual producer as unfair" it has the
pOWcI W d1Ier ILLS price ana TO Tx one which
it deems desirable. This shuts off any chance
of price cutting.
Price control is further insured by strict
regulation of any additional charges, of resale
prices on steel products sold through jobbers, and
of the details arranged for the payments of
bills submitted by the steel producers. AS the
writer in The Nation sums it up:
"DR1CE-CUTT1NG loopholes Of almost every
l. conceivable variety have been ~foreseen
and corked up. In every phase of the admin
lstrat1on OF the code enormous powers are given
to the board Of directors Of the Steel Institute,
1t combines within itself the functions of the
policeman, prosecuting attorney, judge and jury,
as well as certain legislative powers, all of which
in the aggregate give it absolute control not only
over the economic destinies of the firms in the
industry but over consumers of steel, transpor-
tation agencies, and, indeed, the economic well
fare of entire communities"
All this may be true, but the situation NAV
be turned to the public welfare if the govern
ment would act in decisive and statesmanlike
fashion.
Let the government now step in and make
steel a public utility, and give the federal trade
commission the power to fix steel prices which
would be just both to the steel industry and to
the American consumers.
In this, way We could exploit the advantages
OF large scale production to the permanent bene-
tit OF the American public.