The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1950-06-08
Break Up Steel
(Confinped From Page Ons)

| (L0HfiHued from rage OHs)
mergers by ]. P. Morgan interest
in 1901. Clearly" he concluded
its growth since 1901 is not du
solely to it's ability to get NOR
business in an expanding marke
through sheer productive effic
iency."
Asking the reverse question:
the corporation efficient because
is big-he said evidence all seem
to point the other way" He sum
married. the findings of a report o
a firm of engineers hired in tn,
1928-to-1938 period by U. S. Steel
as brought out in committee ques
tioning of U. S. Steel Presiden
Benjamin Fairless at the hearing
late in April. The reports, Stocking
said, pictured the Steel Corpora
ton as big sprawling inert giant
whose production operations were
improperly coordinated; suffering
from a lack of a long-run planning
agency; relying on an antiquateC
system of cost accounting; with al
inadequate knowledge of the costs
or of the relative profitability OF
the many thousands of items il
sold; with production and cost
standards generally below those
considered everyday practice ir
other industries; with inadequate
knowledge of its domestic markets
and no clear appreciation of its OPP
potunities in foreign markets; with
less efficient production facilities
than it's rivals had; slow in intro
ducing new processes and new pro-
ducts"
1.-The answer is clearly no. y,
Stocking said, to his next question:
has the corporation managed its
subsidiaries despite their ineffic-
ency so as to promote competition
and the welfare of the whole econ
omy? A holding company like U. S.
Steel is not going to allow one sub
sidiary to grow at the cost of an
other, Stocking observed, and
"there is evidence that indicates
that the Steel Corporation has in
fact managed its subsidiaries in
this way, but that in doing so it
has not always used the productive
facilities which it commands as
economically as they might be
used" He showed how Tennessee
Coal & Iron Co. in Birmingham,
Ala. has been held back from pro-
ducing steel pipe in order to favor
Carnegie Illinois, another U. S.
Steel subsidiary, even though more
than half the pipe produced in the
U. S. was being used in the south
and southeast.
Stocking maintained that U. S.
Steel has been the price leader in
the steel market even though there
might be no overt agreement be-
tween it and the other big compan-
ies-Bethlehem and Republic-to
fix prices. He showed how steel
rail prices stayed much more stable
than did almost every other indus
trial commodity through the i920's
and 1930's. Through boom and bust,
and then right up to the war per-
od, he observed, prices of rails
shifted much less than other COM
modities-and U. S. Steel tradi-
,ionally has dominated production
If rails. He showed that ore prices
also stayed level over long period
If time. Fairless' testimony, and
earlier information on u. S. Steel's
pricing practices brought out byI
he Temporary Natl Economic
Committee in 1889 illustrate how
n markets of few sellers concerted
lction may aid price leaders in |
making price competition less Wig
'rous."
The monopoly expert proposed
N amendment to the Clayton anti
rust law which would provide for
he dissolution of any corporation
whose size and power are such as
o tend to create a monopoly into
nough independent enterprises to
estore competition. If a corpora
ion whose dissolution was propos-
d could prove that the action
yould materially lessen efficiency,
he breaking-up would be abandon
d.
He also asked the Congressman
D consider adding to the preamble
the Sherman antitrust law a
tatement of government intention
to insure as many sellers in inter-
tate markets as is consistent with
he economics of mass production"
he law would be construed to pre-
ent the accumulation of market
over, particularly through merger
t rivals, to prevent pre-emption of
atural resources, the abuse Of pat |;