The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1950-05-18
Monopoly Probers
Find More Data
About US Steel

Washington (LPA)-The mono.
| poly investigating committee head
| ed by Rep. Emanuel Celler ID, N.Y.
continues to pile up evidence that
US Steel Corporation isn't necess-
arily the most profitable or the
most efficient company in the bus
mess, even though it is the biggest
It also has heard from a top gov
eminent economist, DR.. Louis Bean
that steel-producing capacity isn't
being increased fast enough. This
Bean told the Congressman, may
lead to widespread unemployment
land the loss of markets for farm
ers. 'i.. a
Taking "roomful" of statistical
material furnished by US Steel
Corp, Ward Bowman of the COM
mittee staff has compiled addition
all information about US Steel's
profits and it's dominant position in
the production of many basic steel
items. From 1887 to 1949, accord
ing to the US Steel reports, the
corporation earned more in its ore
a n d transportation subsidiaries
than on all of its steelmaking sub
salaries. Of it's profits, IA per cent
came from it's 6 giant steel-making
subsidiaries, and Sc per cent from
its other activities. Of these, the
|ore-mining company made 221a per
cent of all profits, steel fabricat-
ling subsidiaries made IL per cent,
railroad subsidiaries made 8 per
cent, and steamship companies
made 2 per cent.
Bowman, who is on leave from
his job as professor of economics at
the University of Chicago, said his
analysis showed the proportion of
US Steel's investment devoted to
steel-making subsidiaries is some
where between Sc to Ga per cent.
It got back only as per cent of its
profits from this investment.
Asked by members of the com
mittee to explain why steel corp
oration makes major part of its
money on other businesses, Bow
man said the Congressman could
take their choice. Either there is a
monopoly situation-which would
allow US Steel to take other fac
tors than costs into consideration
in managing the affairs of parti-
cular subsidiary-or else the steel
business is highly competitive. All
of the evidence coming to the COM
mittee from small steel-users and
from economists is that big steel is
not competitive.
n Chairman Ernest T. Weir of Ma
tionaf Steel Corp, the fifth largest
in the business, vigorously denied
to the committee that there's any
lack of competition in steel. How
ever, he agreed with Chairman Cell
er that he didn't want his corpora
tion to go into the steamship busi-
ness, as US Steel has done with the
Isthmian Co., or into fabricating
steel products, as US Steel has
done with literally thousands of
steel articles. He predicted sur
plus of steel before the end of 1850,
and insisted that plenty of iron ore
will be found in other parts of the
world to replace the soon-to-be ex-
hausted high-grade ores of the
Mesabi range in Minnesota. AS for
the fact (Which Weir admitted)
that prices of all steel companies
follow the same pattern, the steel
man insisted that this is because
"there has been a sellers market
in recent years" However, his only
illustration was of situation in
which his company held prices up
when US Steel lowered them. AS
soon as demand fell below capa-
city, he conceded that his company
fell in line with US Steel. He also
admitted that his company was re-
lieved when US Steel raised prices
last December, because he was hav-
ing a tough time making ends
meet.
- "With practically all steel con-
sumers," Weir told the monopoly
investigation, "the supply of steel
has been a more important consid-
GRAFTON than the price" He denied
there had been any withholding of
supplies of steel from small fabri-
Gators.
While the capacity of the indus
try to produce steel is at q record
level, DR.. Louis Bean said, the in
dustry still isn't caught up with the
lag in increasing capacity caused
by the depression of the 1905. If
our use of steel continues to grow
as it has since the early l900's,
Bean said, I'VE would need total
production of around 1875 million
tons of steel per year, and a capa-
city to provide the necessary elbow
room of at least 1876 millions tons
by 1860" This would require, in the
ten-year period, an enormous ex-
pansion to a size nearly one-thifd
bigger than at present, The steel
industry intends to level off pro-
duction at near the present levels,
at least according to all the esti-
mates they have given the mono
poly committee.
Bean emphasized the common in