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Full text of "Investigation of concentration of economic power; monograph no. 1[-43]"

"^^o^ P°_^FJ"f ^^1 SENATE COMMITTEE PRINT 



3d Session 



INVESTIGATION OF CONCENTRATION 
OF ECONOMIC POWER 



TEMPORARY NATIONAL ECONOMIC 
COMMITTEE 

A STUDY MADE FOR THE TEMPORARY NATIONAL 

ECONOMIC COMMITTEE, SEVENTY-SIXTH CONGRESS, 

THIRD SESSION, PURSUANT TO PUBLIC RESOLUTION 

NO. 113 (SEVENTY-FIFTH CONGRESS), AUTHORIZING 

AND DIRECTING A SELECT COMMITTEE TO MAKE A 

FULL AND COMPLETE STUDY AND INVESTIGATION 

WITH RESPECT TO THE CONCENTRATION OF ECONOMIC 

POWER IN, AND FINANCIAL CONTROL OVER, 

PRODUCTION AND DISTRIBUTION 

OF GOODS AND SERVICES 



MONOGRAPH No. 41 
PRICE DISCRIMINATION IN STEEL 



Printed for the use of the 
Temporary National Economic Committee 




UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1941 



TEMPORARY NATIONAL ECONOMIC COMMITTEE 

(Created piusuant to Public Res. 113, 75th Cong.) 

JOSEPH C. O'MAHONEY, Senator from Wyoming, Chairman 

HATTON W. SUMNERS, Representative from Texas, Vice Chairman 

WILLIAM H. KINO, Senator from Utah 

WALLACE H. WHITE, Jr., Senator from Maine 

CLYDE WILLIAMS, Representative from Missouri 

B. CARROLL REECE, Representative from Tennessee 

THURMAN W. ARNOLD, Assistant Attorney General 

♦WENDELL BERQE, Special Assistant to the Attorney General 

Representing the Department of Justice 

JEROME N. FRANK, Chairman 

•SUMNER T. PIKE, Commissioner 

Representing the Securities and Exchange Commission 

GARLAND S. FERGUSON, Commissioner 

•EWIN L. DAVIS. Chairman 

Representing the Federal Trade Commission 

ISADOR LUBIN, Commissioner of Labor Statistics 

•A. FORD HINRICHS, Chief Economist, Bureau of Labor Statistics 

Representing the Department of Labor 

JOSEPH J. O'CONNELL, Jr., Special Assistant to the General Counsel 

•CHARLES L. KADES, Special Assistant to the General Counsel 

Representing the Department of the Treasury 



Representing the Department of Commerce 

• • • 

LEON HENDERSON, Economic Coordinator 

DEWEY ANDERSON, Executive Secretary 

THEODORE J. KREP8, Economic Adviser 
•Alternates 



Monograph No. 41 
PRICE DISCRIMINATION IN STEEL 

JOHN M. BLAIR 
and 
ARTHUR REESIDE 
U 



ACKNOWLEDGMENT 

This monograph was written by 

JOHN M. BLAIR 

and 

ARTHUR REESIDE 

The Temporary National Economic Committee if greatly indebted 
to these authors for this contribution to the literature of the subject 
under review. 

The status of the materials in this volume is precisely the same as that of 
other carefully prepared testimony when given by individual witnesses; it is 
information submitted for Committee deliberation. No matter what the 
official capacity of the witness or author may be, the publication of his 
testimony, report, or monograph by the Committee in no way signifies nor 
implies assent to, or approval of, any of the facts, opinions or recommenda- 
tions, nor acceptance thereof in whole or in part by the members of the 
Temporary National Economic Committee, individually or collectively. 
Sole and undivided responsibility for every statement in such testimony, 
reports, or monographs rests entirely upon the respective authors. 

(Signed) Joseph C. O'Mahoney, 
Chairman, Temporary National Economic Committee. 

m 



TABLE OF CONTENTS 



. Page 

Letter of transmittal '^ 

Preface ^' 

PART I 

The data and the analytical techniques 1 

Source, nature, and limitations of the data 1 

Statistical and graphic techniques 2 

PART II 

Graphic presentiation of the data ^ 

PART III 

Significance of the data *^ 

The significance to the concentration of economic power -co 

The significance to the Government 28 

The significance to the economic arguments of the steel industry 30 

Appendix '*" 

V 



SCHEDULE OF TABLES AND CHARTS 

PART n 

CHARTS 

Ptga 
I. Variations in average price per ton by size of shipment, United 

States, February 1939, plates 8 

II. Variations in average price per ton by size of shipment, United 

States, February 1939, heavy structural shapes 10 

III. Variations in average price per ton by size of shipment, United 

States, February 1939, wire rods 12 

IV. Variations in average price per ton by size of shipment, United 

States, February 1939, plain drawn wire 14 

V. Variations in average price per ton by size of shipment. United 

States, February 1939, hot rolled sheets 16 

VI. Variations in average price per ton by size of shipment. United 

States, February 1939, cold rolled sheets. 18 

VII. Variations in average price per ton by size of shipment, United 

States, February 1939, hot rolled strip 20 

VIII. Variations in average price per ton by size of shipment. United 

States, February 1939, cold rolled strip 22 

PART IlJ 



IX. Effect of variations in capacity utilization upon man-hours required 

per unit of output 32 

X. Variations in average freight absorbed per ton by size of shipment, 

United States, February 1939 . 34 

APPENDIX 



TABLES 

1. Steel shipments by size of shipment, all reported items by products, 

aggregate tonnage and sales, United States, February 1939 37 

2. Steel shipments by size of shipment, all reported items, by products, 

average price per ton. United States, February 1939 40 

3. Steel shipments by size of shipments, normal base point shipments, by 

products, aggregate tonnage and sales. United States, February 1939- 43 

4. Steel shipments by size of shipment, normal base point shipments, by 

products, average price per ton. United States, February 1939 46 

5. Published base prices of selected steel products, February 1939 49 

6. Effect of variations in capacity utilization upon man-hours required 49 

vn 



LETTER OF TRANSMITTAL 



Hon. Joseph C. O'Mahoney, 

Chairman, Temporary National Economic Committee, 

Washington, D. C. 

My Dear Senator: Steel is the basic durable good of our economy. 
It enters into so much of production as to characterize this period as 
" the Age of Steel." Not only is private industry influenced directly by 
steel prices but the Government's efforts to develop the materials of 
defense depend directly upon the purchase and use of enormous quan- 
tities of steel. For these reasons this brief study of price discrunina- 
tion in steel has great value and unusual timeliness. i 

The Temporary National Economic Committee has conducted pro- 
longed hearings on the concentration of control in steel production. 
In these hearings the steel industry testified at length and summarized 
its testimony in a three volume work which has had wide circulation. 
It is not the purpose of this monograph to attempt a duplication of 
either the findings of the hearings or the report of the steel corpora- 
tions. Instead, it goes directly to the crucial problem of prices, seek- 
ing an answer to the question of the existence of discriminations which 
favor large users of steel in comparison with smaller users, thus pro- 
viding a margin which effectively limits competition and increases 
rtionopoly. 

The data used in this monograph were collected by Government 
agencies under authority of the Temporary National Economic Com- 
mittee. The authors have treated them by approved methods of sta- 
tistics. They have interpreted the figures carefully and confined their 
analyses and comments strictly to what these figures signify. In doing 
so they have opened avenues of thought and suggested areas of needed 
research which should stimulate other students to explore further. 
But the limits of time and material facilities have prevented a more 
extended treatment of the problems raised in this study. 

John Blair has brought to this study a diligence and apperception 
characterizing the work of a competent researcher in a difficult field. 
He has organized the material and written the report. Arthur Reeside 
is responsible for collecting much of the original data, for continuing 
an interest in the study through all its trying vicissitudes, and for 
developing the statistical methods used in presenting the data. Dr. 
Dewey Anderson, executive secretary of the Temporary National Eco- 
nomic Committee, is to be commended for his supervision of the study. 

This monograph is offered the committee for use in its deliberations 
in the hope that it throws some light on a very much involved problem 
of our modern economy. 

Respectfully submitted. 

Theodore J. Kreps, 

Economic Adviser. 

October 18, 1940. 

IX 

271^68 — 41— No 41 



PREFACE 

This is a study designed to explore statistically a relatively unknown 
field ; that is, the actual extent to which prices on particular items vary 
according to the size of the shipment. 

The data on which this study rests were not gathered originally for 
the purpose to which they have here been put. Consequently, cer- 
tain assumptions had to be made; certain irregularities were found to 
exist in the graphic curves; and therefore no claim is made to statis- 
tical perfection. 

Nevertheless, the assumptions appear reasonable, the irregularities 
minor, and the general relationship clear between price concessions, 
size of shipinent, and concentration of buying power. 

The economic implications of the relationships are by no means 
fully explored. This report does not go beyond presenting the data 
and pointing out certain types of significance which they may have. 
With the available resources and time at the disposal of the authors 
severely limited, the study could be carried no further. It is hoped, 
however, that the results presented will stimulate the undertaking of 
more complete analyses into such suggested subjects as (a) the precise 
relationship between price concessions to large buyers, the resultant 
competitive disadvantage of small buyers, and the growth of economic 
concentration; (6) the standards by which price concessions are or 
should be determined; and (c) the effect of these concessions upon 
existent analyses of the basing point system. 

There are many to whom the authors are grateful for counsel and 
assistance, but particular acknowledgment is made to Ward S. Bow- 
man, upon whose knowledge of the steel industry the authors have 
relied so heavily. 

John M. Blair. 
Arthur Reeside. 



PAKTI 
THE DATA AND THE ANALYTICAL TECHNIQUES 

SOURCE, NATURE, AND LIMITATIONS OF THE DATA 

A broad survey of the steel industry was undertaken by the Depart- 
ment of Justice for the Temporary National Economic Committee 
during 1938 and 1939. The data obtained by the Department of 
Justice were voluminous, extensive, and comprehensive. The rela- 
tionship of those data to the study presented herewith is, first, that 
they serve as a background and, second, that the statistical materials 
in this study are derived from the Justice Department's questionnaire 
known as Form B. (For Form B questionnaire, see appendix.) 

The Form B questionnaire was designed to produce data which were 
for the most part. geographical in nature. Its coverage for the period 
studied ranged, by products, from 50 to 90 percent of all shipments 
of the industry. Because members of the industry foimd it a con- 
siderable burden to supply information of this kind, the coverage was 
limited to the single month of February 1939. 

The danger of generalizing from a single month is appreciated. 
Other periods were originally to have been included by the Depart- 
ment of Justice, but because of the time and the expense involved for 
reporting companies, such additional data were not obtained. How- 
ever, the month chosen was not one of extremely depressed conditions 
nor one which was characterized by the trade magazines as a period of 
price weakness. On the other hand, business was not booming from 
the point of view of the steel companies. The worst of the 1938 upset 
was over, and the real upswing in 1939 had not as yet taken place. 
The rate of utilization (ingots produced to capacity for production) 
for the industry was nearly 55 percent (54.7 percent) during the month. 
No changes in published prices took place during the month studied. 

The period covered was so short and the break-down of the data 
so extensive that the figures were spread to a point where the items 
reported by districts may be practically used as individual shipments. 
The break-down was by plants, by products, by basing points, and by 
consuming districts. 

The questionnaire did not ask specifically for a list of individual 
shipments. The data requested were totals for consuming districts, 
of which there were 64. Data for each of these 64 consuming districts 
were in effect reported separately for each basing point upon which 
the shipments were priced. (More than 20 basing pomts were reported 
but of course not 20 for each consuming district or on each product.) 
The data were further segregated into 10 product groupings. The 
plant from which the shipment was made was also one of the controls 
utilized. (The United States Steel Corporation and other corporate 
groups reported separately for each operating plant sampled.) 

In addition to the extensiveness of the break-down, the narrowness 
of time, and the specific definition of the j)ro(lucts, there is yet another 



2 OONCENTRATION OF ECONOMIC POWER 

factor which tended to spread the items; that is, the geographical 
dispersion inherent in the basing point system. Steel mills sell to 
the Nation rather than to their own particular locality. It is then at 
least reasonable to believe that the totals reported were so composed 
that the data reflect single shipments with sufficient accuracy for the 
purpose of this study. 

This basic asgomption requires explanation in order that the limita- 
tions of the data may be understood. Despite the break-downs, the 
data represent to a limited extent combinations of shipments rather 
than individual shipments. At all events, however, accumulation 
could only rnake the inclination of the curves less abrupt and would 
thus result in an understatement rather than an overstatement of the 
extent of price concessions. 

A further assumption to this study is that large buyers buy in large 
quantities ; that large shipments are usually destined for large buyers, 
while small shipments generally go to small buyers. Obviously, 
considering the price concessions to be gained from sizeable purchases, 
any large buyer who purchased in small quantities would be needlessly 
increasing liis costs and acting against his own economic interests. 

STATISTICAL AND GRAPHIC TECHNIQUES 

The statistical methods used are simple and conventional. Each 
product was sorted as to the tonnage of its items. The items were 
grouped into tonnage classes and tabulated to give the aggregate of 
tonnage and aggregate of dollar figures for each class. The dollar 
figures were then divided through by the tonnage figures to obtain 
the averages or dollar-per-ton figures. 

Published prices were uniform for most basing points during 
February 1939. Shipments based on points where prices were uniform 
have been designated as "Normal base point shipments." Shipments 
based on Worcester, Granite City, Gulf or Pacific ports, and Detroit 
have been designated as "abnormal." Shipments of cold rolled strip 
on the Chicago basing point were also abnormal in this respect. The 
Feason for this distinction is perhaps best explained in that shipments 
based on Granite City were quoted during February 1939 at $2 above 
those at most other points. Shipments based on Pacific ports were 
$10 higher. Detroit was classified as abnormal because, strictly 
speaking, it was not a basing point. Detroit shipments generally 
carried no freight charges against the customers, freight being included 
in the base delivered price. (Table 5 of the appendix lists and classifies 
published prices for the period studied.) 

An analysis was made of all reported items and a separate analysis 
was made of normal base point shipments. The chief difference 
between the two is that the former contains 2,929 items and the latter 
2,555; that is, 374 items were eliminated. For purposes of statistical 
convenience, the text, tables, and charts refer only to normal base 
point shipments. The tables which include all reported items are 
presented in the appendix to indicate that the fairness of the original 
sample has in no way been significantly impaired by this selection. 

A number of considerations influenced the choice of class intervals. 
It will be noticed that they follow the conventional pattern of such 
statistical break-downs as classes of income distribution or business 
by size in that they are narrow on the small end of the distribution 



CONCENTRATION OF ElCONOMIC POWER 3 

and wide on the large end. They are approximately, though not 
exacily, logarithmic. The class marks 1, 10, 100, 1,000, and 10,000 
represent an exact logarithmic series. In order to give a more compre- 
hensive view of the distributions, this series was split at 3, which is 
the approximate geometric mean (exact figure 3.1624-)- 
The resulting classes meet the following requirements: 

(1) The names of the classes are round numbers. 

(2) They are sufficient in number to give an adequate view of the 

distributions. 

(3) They maintain a fairly even frequency for each class. 

The purpose of keeping the frequencies even is not only to increase the 
reliability of the results but also to make possible the presentation of a 
pattern which tends to distribute the reader's attention in proportion 
to the frequency. The small end of the distribution is magnified 
because of the relatively high frequency therein. 

Most of the companies reported their tonnage figures accurate only 
to 1 ton. For this reason all reports were rounded to even tons. In 
the process of rounding, items of less than one-half ton were ignored, 
and thus a few items were discarded. The matter is of no practical 
consequence here. It is merely noted along with the fact that the 
tonnage scales contain no zero. 

The vertical scales labeled "Dollars per ton" do not always contain 
a zero. The need of a zero in this case is supplied by the scale of per- 
cent decline. The left, or "Dollars per ton" scale, in each case is 
fitted to the right scale of "Percent decline." 

The scales of percent decline are the same for all charts of the set. 
A decline of 20 percent (or 21 or 22 percent, etc.) is thus represented 
by the same vertical distance on all charts of the set. The percent 
decline is, of course, the decline from the maximum ordinate. No per- 
centage figures are given in the tables; they are evident in the charts. 

The percentage scales for the charts of net extras are labeled "Con- 
tributed percent decline" because the declines represented are a com- 
ponent of the mill net. Specifically what has been done is simply to 
use the same scales for mill net and net extras. The declines in net 
extras are thus not expressed as a percentage of the maximum ordinate 
for net extras but as a percentage of the maximum ordinate for mill 
net. A "Contributed percent decline" of 20 percent (or 21, or 22 
percent, etc.) thus means that the decline of net extras accounts for 20 
percent out of perhaps a total of 30 percent decline shown for mill net. 

It is to be remembered that net extras are quality and quantity 
premiums less quality and quantity discounts. Premiums and dis- 
counts are components of a price. To be more specific, it is impossible 
to buy a ton of extras. 



PART II 

GRAPHIC PRESENTATION OF THE DATA 

Before examining the charts presented in this section, it may be 
convenient to describe briefly the various components of the steel 
price structure. Consequently definitions of the elements of the steel 
pricing system are presented below. 

Base Price. 

In such commodities as steel, there are, even under one product 
classification, innumerable different sizes and specifications. To pub- 
lish prices for each of these various possible combinations would be 
impracticable and confusing. Consequently a more or less standard 
specification with respect to gage, thickness, length, quantity ordered, 
chemical specification, and tolerance is quoted as "base." This price 
is also restricted to a particular location, which is usually, but not 
necessarily, one of the points of production of the product. This 
point is known as a basing point. Thus the base price is the price of 
a selected quantity and specification of a particular product at a par- 
ticular point. In this study actual base prices were calculated by 
deducting from the invoiced delivered price the freight added from 
the governing base point to the point of delivery and the extras 
charged. (That basing point which makes for the lowest combina- 
tion of base price plus freight at any particular delivery point is known 
as the governing basing point.') ** 

Extras and Deductions. 

These are the prices which are added to or deducted from the base 
price to arrive at the price of a particular specification of the product— 
which does not fall in the classification described above as base. Wet 
extras are thus quality and quantity premiums less quality and 
quantity deductions. 

Delivered Price. 

The delivered price is the price actually paid by a steel buyer at 
the point of delivery. (Theoretically, delivered prices may be calcu- 
lated uniformly by all steel sellers because basing point prices are 
uniformly published, extras and deductions are uniform and published, 
and the freight rate which applies from the basing points to consuming 
points are published. Adding these various charges in such a manner 
as to utilize the basing point which is nearest pricewise to the consumer 
makes possible what amounts to uniform published delivered prices.) 

Freight Absorption and Phantom Freight. 

Freight absorption or phantom freight arises when shipments are 
made from a mill not located at the basing point upon which the ship- 
ment was priced. If the shipment is made from a mill from which 
the freight rate to the point of deliver}^ is greater than the freight rate 
from the governing l)asing point, the dift'erence in these freight rates 
is called freight absorption. Wlien ike freight from the point of de- 
liv(>rv is l(>ss than the rate from the ":o'verning basing point, the dift'er- 
ence is colled phnntom fr(>ight. ■ , 

5 

•JTl'.tOS — 41 — No. 41 ;] 



g CONCENTRATION OF EiOONOMIC POWER 

Mill Net. 

Mill net is the price received at the mill after the payment or allow- 
ance for the actual transportation from mill to destination has been 
deducted from the invoiced dehvered price. 

On the following charts variations by size of shipment in the mill 
net, net extras, and the base price are plotted for these steel products: 
Plates, heavy structural shapes, wire rods, plain drawn wire, hot rolled 
sheets, cold rolled sheets, hot rolled strip, and cold rolled strip. Data 
are also available and presented in the tables of the appendix, though 
not charted, for sheet and tin plate bars and for tin plate. Unfor- 
tunately, the data for the first of these items are not sufficiently com- 
plete for purposes of charting. And, since tin plate, unlike most other 
steel products, is usually sold on the basis of long-term contracts, it 
was omitted because the various shipments made within the term of 
the contract are only components of the contract and therefore do not 
indicate at all the size of the buyer. 

Although data are r„vailable and are presented in the tables for 
delivered value, freight charged, net extras, base price, freight paid, 
freight absorbed, and mill net, they are plotted here only for mill net, 
net extras, and base price. These items are the most significant in the 
steel price structure, and variations in them cannot be ascribed to 
variations in freight, a factor determined by geographic location. 



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PART Hi 
SIGNIFICANCE OF THE DATA 

THE SIGNIFICANCE TO THE CONCENTRATION OF ECONOMIC POWER 

One of the functions of the Temporary National Economic Com- 
mittee is to determine the causes of the concentration of economic 
power; therefore a first concern of this study is the relationship be- 
tween the granting of price concessions to large buyers and the develop- 
ment of economic concentration. 

Steel is the basic durable good of the economy. It is essential to 
building and construction, railroads, automobiles, contamers, ship- 
building, machinery and tools, highways, oil, gas, water, mining, and 
many other vast fields of enterprise. Although it is held by some that 
steel may presently be replaced by plastics in much the same way that 
wood has been replaced by steel,- the economy for many years to come 
will undoubtedly be founded upon steel and will consequently be 
affected immediately by the policies and practices of the steel industry. 

Of most interest to this study is the industry polic;f which brings 
about these marked declines in the various elements of the steel price 
structure as the size of the shipment increases. ^ On the charts it was 
shown that these reductions are sufficient to cause the yield to the 
mill^the mill net — to drop steadily with larger and larger orders.^ 

The percent 'change in the mill net attributable to the actual 
variation in extras was also charted; and it was found that a sub- 
stantial proportion of the decline in the mill nets was due to very 
extensive decreases in extras. Since extras are determined by quality 
and quantity factors, it is evident that the advantages of large quan- 
tity generally outweigh the exacting quality specifications frequently 
demanded on large orders. 

What perhaps was even more significant was the discovery that the 
steel companies, to obtain large orders, cut even their base prices, that 
is their "policy" prices. The act of lowering the base price is espe- 
cially significant, because it reflects a reduction in that element of the 
price structure which theoretically is immune, first, from any varia- 
tions due to quality and quantity considerations and, second, from 
differences in freight charges. Reductions in the base price to large 
buyers are thus purely discriminatory, theoretically explainable 
neither on technological nor geographic grounds. 

' Before the Temporary Nstipnal Economic Committee, this interchange took place between Oommis- 
sioner Leon Henderson and Benjamin F. Fairless, President, United States Steel Corporation: 

"Mr. Henderson. Were there any of your buyers paying the base price plus the standard extras?" 
(Fourth quarter 1937 to second quarter 1938). 

"Mr. JFairless. Yes: there would be some. 

"Mr. Henderson. But there would be other buyers who were getting substantial oonoessions on price 
in order for you to meet competition? 

"Mr. Fairless. That is correct."— (Hearings before the T. N. E. C, Part 19, p. 10534.) 

' Also before the Temporary National Economic Committee, l>r. Theodore Kreps, economic consultant 
to the committee, asked this question of Dr. Theodore Yntema, statistician for the U. 8. Steel Corporation: 

"Dr. Kreps. • * * As I under.'^tand it, mill-net prices reflect pretty well what the consumer pays to 
the industry— at least that is in substance your contention. Is that correct? 

"Dr. Yntema. I think that is a fair statement."— (Hearings before the T. N. E. C, Part 26.) 

25 



2g OONCENTRATION OF ECONOMIC POWER 

That concessions might be made to large buyers is to be expected 
for certain steel products from the informed nature of much steel 
buying. This has been described by spokesmen for the United States 
Steel Corporation as follows: 

This readiness of a buyer to shift from one producer to another because of a 
lower price is due to the informed character of. the buying of steel. Technical 
knowledge of the product to be purchased is available through laboratories of 
individual purchasers, trade associations, and independent research agencies; 
exactly the same steel may, for the most part, be obtained from any one of a 
number of producers. Furthermore, the large size of individual purchases 
makes it worth while for buyers to seek the lowest possible price. This propensity 
to shop is enhanced by knowledge of latest price quotations, by familiarity with 
psychological and other factors resulting in a "buyers" or a "sellers" market for 
all or particular products, and by a general understanding of approximate costs 
of steel production; indeed, a few purchasers of steel operate completely integrated 
steel works to supply a portion of their requirements, and others have semi- 
integrated and non-integrated capacity.' 

Wliatever the cause, the obvious effect of these concessions to large 
buyers is that small purchasers are placed at a competitive disad- 
vantage. No elaboration is needed in describing the position of a 
small manufacturer who in February 1939 was forced to pay for a 
ton of cold rolled strip a delivered value of $154.69, netting the mill 
$145.41, as against a large competitor who, for this product, paid a 
delivered value of only $76.19— a mill net of but $70.88." 

It is noteworthy that those steel products marked by the most 
extensive declines in price to large buyers are products which are 
consumed principally by highly concentrated industries. Of the 
eight products examined, the largest concessions were made on hot 
and cold rolled strip. 

By far the largest consuming channel of strip steel is the highly 
concentrated automotive industry. Out of a distribution of strip 
steel in 1939, amounting to 2,200,700 net tons, the automotive industry 
consumed 1,129,800 tons,^ and it is obvious that a few members of 
that highly concentrated industry- are capable of exerting tremendous 
buying power. 

* * * in the automotive, container, agricultural implements, household 
durable goods, and shipbuilding industries, a relatively few large companies 
comprise a substantial percentage of the total production of their respective indus- 
tries. In purchasing their steel requirements these large companies usually come 
into the market with orders of considerable magnitude. ^ 

At the other extreme, however, those steel products marked by the 
least extensive declines in price to large buyers are consumed prin- 
cipally by a large number of small buyers. The two products for 
which the price concessions were smallest are steel plates and heavy 
structural shapes. The largest consuming channel of both shapes 
and plates consists of contractors and fabricators for the construction 
industries. Out of a distribution of steel shapes, amounting in 1939 
to 2,803,600 net tons, 1,687,600 were consumed by construction 
contractors and fabricators; and of a distribution of 2,677,500 net 
tons of plates, 543,000 were taken by this group of relatively small 
buyers, while, in addition, 237,200 tons were consumed by the equally 

» United States Steel Corporation— Some Factors in the Pricing of Steel.— Hearings before the T. N. E. C, 
Part 2f^, Exhibit UIO.) 

♦ Frequently because of the exacting specifications demanded by large steel buyers, the steel sold to the 
large buyer is of even better quality than that on which the small purchaser has to pay a much higher 
price. 

• Iron Age, March 21. 1940. 

» United States Steel Corporation op. cit. 



CONCENTRATION OF ECONOMIC POWER 27 

atomistic channel of jobbers, dealers, and distributors, 299,000 by 
exports, and 198,500 by miscellaneous industries." 

The construction industry is among the least concentrated of the 
Nation's industrial fields. There is no great company within it which 
is able to exert buying pressure at all commensurate with that which 
can be applied by any one of the three large automobile producers. 

This, then, w^ould certainly tend to substantiate the position that the 
extent of the price concessions generally varies directly with the 
degree of economic concentration in the consuming industries. 

There is perhaps a further reason which explains why price con- 
cessions on steel plates and shapes are relatively small. A considerable 
amount of these items is purchased directly or indirectly by the 
Federal Government. A calculation made from data in the Division 
of Construction and Public Employment of the Bureau of Labor Sta- 
tistics reveals that of the total production of structural and rein- 
forcing steel a large percentage — 55.5 percent in 1936, 33.3 percent in 
1937, and 47.9 percent in 1938— was purchased for use on projects 
financed by Federal funds. The fact that in 1938 almost half of the 
total production of structural and reinforcing steel was bought with 
Federal funds for use on projects, primarily those of the P. W. A. — to 
say nothing of additional purchases by other governmental agencies — 
makes it evident that the Government is the leading buyer for this 
type of steel products. But, as will be developed later in this study, 
the Government, despite its large purchases, does not exert the 
effective buying pressure customarily applied by large private 
purchasers. 

It is obviously impossible to determine the exact extent to which the 
granting of material price concessions has contributed to the growth of 
economic concentration. In making any such determination it would 
be necessary to devise proper adjustments for all the other factors 
which may induce concentration, such as greater financial strength, 
technological advantages in operating efficiency, etc.; and existent 
data are not adequate for this purpose. Nevertheless it is self-evident 
that the practice of granting concessions is of not inconsiderable 
importance in perpetuating highly concentrated economic control, 
once it has become established. 

The necessity faced by small producers of paying, in some cases, over 
twice as much for steel as their large competitors not only serves to 
limit their ability to compete but also operates to keep numbers of 
them out of the field altogether. Once the ability to purchase in 
very large quantities is established, substantial price concessions may 
be expected to result, and the effect of these concessions is to per- 
petuate and intensify the concentration existing. In this way, 
economic concentration tends to feed on itself. 

A less obvious, but nonetheless equally significant, aspect of these 
price concessions is their relationship to the type of pricing system 
practiced by the steel industiy — the basing point system. 

A characteristic of the basing point system is the widespread dissem- 
ination of published base prices, freight rates, extras, and other ele- 
ments of the price structure. It has been contended that when the 
published prices are well above actual prices to large buyers, the very 
pubhcation of these prices may mislead the small buyer who possesses 

' Iron Age, March 21, 1910. 



28 CONCENTRATION OF ECONOMIC POWER 

inadequate market information and relies upon the published data as 
the source of his market information. 

In testimony before the Temporary National Economic Committee, 
Mr. A. H. Feller, Special Assistant to the Attornej^ General, asked this 
question of Eugene G. Grace, president of Bethlehem Steel Co.:^ 

Mr. Grace, I think we have come to a somewhat important point here. The 
base price remaindti at the high level. So far as the operation of your company 
and the United States Steel Corporation were concerned, you weren't getting that 
price. Your realization was substantially lower, and yet some purchasers were 
paying that price and they included certain types of consumption and also small 
buyers. 

Now by keeping that base price at that fictitious level, to use your own words, 
weren't the small buyers in effect being penalized? 

And further — 

Didn't the base price, although not adhered to over the average because of the 
conditions of the market, didn't the base price have this significance: That it 
resulted in some purchasers who perhaps because of inferior knowledge with respect 
to market conditions or perhaps because of insufficient buying power, didn't it 
result in a discrimination between purchasers so placed and purchasers who 
knew more about the market and who could buy more? 

Although Mr. Grace did not think that the publication of fictitious 
prices penalizes the small buyer, this idea advanced by Mr. Feller is 
extremely suggestive. Unfortunately it is impossible with present 
information to determine the extent to which small buyers actually 
are misled by the published prices. If they do accept them as bona 
fide, or at least as close approximations of the prices paid by their 
large competitors, the publication of these prices, as a characteristic 
of the basing point system, is undoubtedly one of the reasons that the 
price concessions are as large»as, in fact, they prove to be. 

THE SIGNIFICANCE TO THE GOVERNMENT 

Earlier in this study it was pointed out that the Federal Govern- 
ment buys very large quantities of certain types of steel products. 
Are, then, the substantial price concessions made to large private 
buyers offered also to the Government? Such does not appear to be 
the case. From testimony of leading steel producers before the Tem- 
porary National Economic Committee and from other sources it has 
been learned that the Federal Government, even on extremely large 
orders, usually pays the published price. 

In testifying before the Temporary National Economic Committee, 
Mr. Eugene Grace, president of the Bethlehem Steel Corporation, 
stated that, while price concessions are frequently made to private 
buyers, his company nearly always bids the published prices on 
orders from the Government. Mr. A. H. Feller, Special Assistant to 
the Attorney General, interrogated Mr. Grace as follows: 

Mr. Feller. Is it correct, then, Mr. Grace, to say that, during this period 
when the base price was fictitious as far as the trade was concerned, it was not 
fictitious as far as the United States Government was concerned? 

Mr. Grace. I have told you what our policy was in quoting to the United 
States Government. That is as far as I can go. 

Mr. Feller. Your policy was that the published base price was a real price? 

Mr. Grace. That is the basis upon which we quoted and undertook to get 
Government business * * *. Our policy has been as I have said to quote 
the United States Government official published prices.^ 

8 Hearings before the T. N. E. C, Part 19, pp. 10593. 1059.5. 
« Hearings before the T. N. E. C. Part 19, pp. 10596, 10597. 



CONCENTRATION OF ECONOMIC POWER 29 

There can be little doubt that the Government is in the role of the 
^'least favored buyer," and that its inability to obtain the price con- 
cessions regularly given to large private buyers is indeed costly to the 
Nation's taxpayers. 

A number of reasons lie behind this failure of the Federal Govern- 
ment to obtain price concessions. Among them are certain purchasing 
policies pursued by the Procurement Division of the Treasury De- 
partment. i° An additional reason is that producers of products such 
as steel necessarily realize that, in order to operate in terms of the legis- 
lation passed by Congress, the administrative agencies of the Govern- 
ment are compelled to purchase, almost regardless of price, the items 
required. 

Perhaps an even more pointed explanation is that, unlike a number 
of large private buyers, the Government has apparently not seen fit 
for some years to erect and operate its own steel works. Two large 
private buyers of steel — Ford Motor Co. and International Harvester 
Co. — now operate completely integrated steel works to supply a 
portion of their requirements. And half a dozen others — American 
Car & Foundry Co., American Locomotive Co., Atchison, Topeka & 
Santa Fe Railroad Co., Continental Can Co., Simonds Saw & Steel 
Co., and Timken Roller Bearing Co., Inc. — have semi-integrated and 
non-integrated steel-maldng capacity. ^^ 

This apparent inability of the Government to threaten the produc- 
tion of its own steel requirements has undoubtedly been of considera- 
ble importance in causing the Government to pay prices for steel 
usually acceptable only to the smallest and least effective private 
buyers. 

The existence of these price concessions to large buyers is of further 
significance to the Federal Government. Analyses of price move- 
ments, particularly in times of national emergency, are often of great- 
est importance in the formulation of policy. Much of this price in- 
formation can be obtained regularly under present circumstances 
only from published sources. The possible failure of these published 
prices to reflect accurately the movement of prices actually paid can 
obviously become a serious problem to the Government. 

It is very evident that in the case of steel the published prices are 
quite different from the actual prices paid by large buyers.'^ The 
Government is thus unable to discover on the basis of available price 
information the actual prices paid for the Nation's basic durable good. 
In this time of national emergency increases in the actual prices of steel 
may well be taking place through reductions in the concessions allowed 
to large buyers; but such increases can in no way be discerned through 
analyses of existent steel price information. The very presence of 
these great concessions from the known prices thus calls for more 
accurate price information, at least for steel products, than is today 
available. 

'" For an analysis of these policies, see M. A. Copeland, D. M. Barbour, and C. C. Linnenberg, Jr., Gov- 
ernment Purchasins;— An Economic Commentary, T. N. E. C. Monograph No. 19. 

" United States Steel Corporation, op. cit. 

■2 Said Mr. Eugene G. Grace, president, Bethlehem Steel Co., in testimony before the Temporary 
National Economic Committee: 

"Our established prices were not prevailing nor obtainable nor controlling. In speaking of the price 
situation that existed at that time (1938), I naturally would have in mind the prices currently which we 
were obtaining for our product. They didn't tie into the published prices which you call official prices in 
any sense of the word."— (Hearings before the T. N. E. C., Part 19.) 



30 OONCENTRATION OF BCONOMIC POWER 

THE SIGNIFICANCE TO THE ECONOMIC ARGUMENTS OF THE STEEL 

INDUSTRY 

An incidental, though none the less interesting, aspect of these price 
concessions is their relation to the economic arguments advanced by 
spokesmen of the steel industry. 

The United States Steel Corporation submitted to the Temporary 
National Economic Committee a series of exhibits in the form of 
pamphlets. These exhibits were prepared by a special staff under the 
direction of Dr. Theodore Yntema, of the University of Chicago. In- 
asmuch as no refutation of the basic economic theses advanced therein 
has as yet been offered by other steel producers, it is assumed that the 
arguments expressed represent the opinion of the steel industry. 

One of the principal arguments advanced is that the industry, inso- 
far as variable costs are concerned, is one of constant costs. In every 
industry costs are divided between those which are fixed and those 
which are variable. As is stated by spokesmen of the United States 
Steel Corporation: 

Costs must of necessity fall into one of two categories. Some items of cost are 
the ^a,me regardless of the amount of steel and other products produced provid- 
ing there is not a complete shut-down. These costs are known as "fixed costs"' 
or "overhead costs." There are other items of cost termed "variable costs" or 
"incremental costs" or "additional costs" which are not the same regardless of 
volume but increase with increases in the volume of steel produced and sold. 
These costs can be diminished by cutting down the production of steel. The 
fixed costs, on the other hand, cannot be diminished except by complete shut- 
down, but they can be spread over a greater number of units of products by 
increasing production." 

After examining cost data of the United States Steel Coiporation 
and making numerous adjustments — the propriety of which need not 
be examined here-— the statisticians of the United States Steel Corpo- 
ration concluded that variable costs are constant. 

Taking the costs shown by the profit and loss statements of the corporation from 
1927 to 1938 and adjusting to 1938 wage, interest, and tax rates and to 1938 
prices and other operatmg conditions, this study shows that under 1938 condi- 
tions the costs of the first or fixed type amount to $182,100,000 per year while 
those of the second type, the additional costs, are approximately $55.73 per 
weighted ton of product shipped * * * 

Within the range of actual experience the additional costs, at 1938 wage and tax 
rates and 1938 material prices, arising with the shipment of each additional ton 
remained constant at $55.73. ■ This is true when production averages as high as 
90.4 percent and as low as 17.7 percent of capacity for the entire yesLT.^* 

Except when production is at very low rates of capacity, variable 
costs were found to bulk much larger than fixed costs. Thus in 
February 1939, when production was at approximately 55 percent of 
capacity, the percentage of fixed cost to total cost, according to the 
stud}" of the steel corporation, would be between 26.0 and 22.9 per- 
cent.'^ In other words, at the time the statistical data in this study 
were collected, variable costs were over 75 percent of total costs. 

While it is not the purpose of this report to inquire into the con- 
tention of the steel spokesmen that variable costs are constant,'^ the 
data on price concessions present this interesting situation. 

13 United States Steel Corporation, Steel Prices, Volume, and Costs.— (Hearings before the T. N. E. C, 
Part 2fi. Exhibits 1416, 1417.) 

'< Ibid. 

"5 Ibid., table 2S. 

" For an analysis of the cost data submitted by the Steel Corporation, see hearings before the T. N. E. C.^ 
Part 26 (testimony of Martin Taitel, Senior Consulting Economist of the Work Projects Administration). 



OONCENTBATION OF ECONOMIC POWER 31 

On one hand spokesmen for the steel industry state that variable 
costs in their industry are constant and that an increase in the volume 
of business would not result in a reduction of these unit variable costs, 
which, as noted, comprised in February 1939 over 75 percent of total 
costs. On the other hand, it is found that during that same month 
steel producers were granting very sizable price concessions for the 
apparent purpose of obtaining large orders. 

This inconsistency might be explained on the grounds that a differ- 
ence exists between the economic conclusions to be deduced from 
these data and the actual day-to-day operating behavior of a large' 
corporation. Thus, in the words of Dr. Yntema testifying before 
the Temporary National Economic Committee — 

Again Dr. deChazeau said, "If other things cannot be assumed equal, Dr. Yntema's 
analysis of price elasticity of demand canno.t be considered a criterion of desirable 
pricing policy even for the United States Steel Corporation." With this I should 
agree but I should point out that we never thought that it should be regarded a 
criterion of desirable pricing policy by the United States Steel Corporation. i^ 

Nevertheless, the granting of the price concessions, substantial as 
they are, would be much more understandable were the industry one 
of decreasing costs. On the basis of the assumption that variable 
costs are constant, the month of February 1939 saw large price con- 
cessions being made for the sole purpose of spreading fixed costs, 
amounting during that month to less than 25 percent of total costs, 
over a larger number of units. It seems at least questionable whether 
this greater diffusion of the distinctly minor element of fixed costs 
would constitute sufficient justification for the granting of price con- 
cessions so large that mill nets were reduced by amounts up to and 
over 50 percent. 

Actually there is some factual basis for assuming that in iron and 
steel variable costs per unit do decline as output is increased. In 
1935 the Bureau of Labor Statistics conducted a study of the effect 
of varying rates of capacity utilization in steel upon the number of 
man-hours required per unit of output. It was found that as the 
percent of capacity utilized rose from 20 to 25 percent to 55 to 60 
percent, the man-hours required per unit declined noticeably. That 
this behavior is not exceptional to the iron and steel industry is to be 
seen from a comparison with two other industries for which data of 
this nature are available — the cement industry and the brick and tile 
industry. The effect of increasing capacity utilization upon unit 
man-hour requirements in these three industries is shown in the 
following chart.^^ 

The behavior for the steel industry, as shown on the chart, may 
understate the decline which under present conditions actually 
takes place. That study was based upon data collected in 1935, a 
period .prior to the widespread adoption of the continuous process 
rolling mill. It is more than likely that the introduction of this new 
process has resulted in even greater reductions in unit man-hour 
requirements. Also, as ma^ be noted from the chart, the data extend 
only to 55 to 60 percent of capacity; if data were available for higher 
rates of capacity utilization, they might well show, up to almost the 
very highest rates, a still more substantial decline. 

" Hearings before the T. N. E. C, Part 10. 

■' It was not a purpose of these studies to separate man-hours worked into "fixed" and "variable" cate- 
gories. Arbitrary differentiations of that type, while attempted by spokesmen of the steel industry, are 
rarely to be found in statistical studies of the relationship between the quantity of labor and the rate of 
production. 



32 



CONCENTRATION OF EiOONOMIC POWER 



Chabt IX 



EFFECT OF VARIATIONS IN CAPACITY 

UTILIZATION UPON MAN-HOURS REQUIRED 

PER UNIT OF OUTPUT 



INDEX OF 

MAN-HOURS REQUIRED 

PER UNIT OF 

OUTPUT 



IRON AND STEEL ^ 

(55-60% CAPACITY UTILIZED- 100) 



130 
120 
110 

inn 


















^■^ 




































^^^1^^' 



30-35 35-40 40-45 45-50 

PERCENT OF CAPACITY UTILIZED 



« INDEX OF 

MAN-HOURS REQUIRED 

PER UNIT OF 

OUTPUT 

140 



130 
120 
110 



INDEX OF 

WAN-HOURS REQUIRED 

PER UMIT OF 

OUTPUT 

190 



180 
170 
I60 
ISO 
140 
130 
120 
110 



CEMENT^ 

(100% CAPACITY UTILIZED-IOO) 






INDEX OF 

MAN-HOURS REQUIRED 

PER UNIT OF 

OUTPUT 

190 



180 
170 
160 
150 
140 
130 
120 
110 



40 60 80 

PERCENT OF CAPACITY UTILIZED 



HiDEX OF 

MAN HOURS REQUIRED 

PER UNIT OF 

OUTPUT 

ISO 



BRICK AND TILE^ 

(70% CAPACITY UTILIZED" 100) 






INDEX OF 

MAN-HOURS REQUIRED 

PER UNIT OF 

OUTPUT 

ISO 



120 

no 



30-40 40-50 50-60 

PERCENT" OF CAPACITY UTILIZED 



' Bureau of labor Statistatics, Monthly Labor Review, vol. 40, May 1935, p. IIGI. 
' National Research Prgject, Mechanization in the Cement Industry, 1939, p. 23. 

' National Research Project, Productivity and Employment in Selected Industries, Brick and Tile, 1939, 
p. 117. 



CONCENTRATION OF ECONOMIC POWER 33 

A second economic argument advanced by spokesmen for the steel 
industry is that the existence of competition within the basing point 
system is indicated by the presence of freight absorption.'^ The 
reasoning beliind this contention is that the very act, by producers, 
of bearing part of the freight charges themselves indicates a sacrifice 
on their part which could be demanded only by competition. Thus, 
presumably, the greater the competition among producers, the greater 
the freight absorption. 

Reference is frequently made to this idea in testimony and exhibits 
offered by spokesmen for the steel industry. In concise form the 
argument even appears regularly in a caption introducing steel price 
information published by the trade journal, Iron Age. 

Steel prices on these pages are f. o. b. basing points (in cents per pound) unless 
otherwise indicated. On some products either quantity deductions or quantity 
extras apply. In many cases gage, width, cutting, physical, chemical extras, 
etc., apply to the base price. Actual realized prices to the mill, therefore, are 
affected by extras, deductions, and in most cases freight absorbed to meet com- 
petition.-'' 

Actually the data collected in tphis study indicate that the very, 
converse of this contention holds true. It is on small shipments with 
their limited price concessions that the amount of freight absorption 
is generally greatest; and, as the size of the shipment and the price 
concessions increase, the amount of freight absorption generally declines. 
This behavior is shown in chart X. 

What appears to happen in most cases is that lar^e buyers are 
successful in getting substantial price concessions from mills located 
nearby and, further, that as the distance from the mills to buj^ers 
increases producers are less able to reduce their mill nets to such an 
extent that the delivered price, including the greater freight, can 
meet the delivered price of the mills near to the buyer. On the other 
hand, small buyers, being unable to obtain these substantial price 
concessions, are more inclined to "shop around" in the hope of obtain- 
ing slightly better prices. A concession of almost any kind would 
frequently obtain the order of the small buyer. On these small orders 
the more distant mills are not faced with the competitive necessity 
of making substantial price concessions; this obviously gives them a 
greater margin in which they can include t\\e absorption of freight. 

If such is actually true, the contention that the degree of competi- 
tion varies with the amount of freight absorption must be discarded 
as untenable; otherwise, on the basis of the data presented in the 
following chart, it would follow that competition would generally be 
least intense in the case of the largest orders on which price concessions 
are greatest, whereas competition would be most intense on the 
smallest orders which bear only limited price concessions. 

" If a shipment is made from a mil! from which the freight rate to the point of delivery is greater than the 
freight rate from the governing basing point, the difference in these freight rates is called freight absorption. 
2i> Recent issues of Iron Age, e. g. that of August 22, 1940. (Source not italicized.) 



34 



CONCENTRATION OP BOONOMIC POWER 



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APPENDIX 



For further information as to these data please see Hearings before 
the Temporary National Economic Committee, Part 27. 



Form B. — Distribution and pricing of selected steel products 



•Company. 



'Month 

i^Year 

Name and location of works Basing point on which delivered price 

Product wa^s computed 



Period^ ^ 



Domestic shipments to con- 
suming districts > 

(1) 


Tonnage 
shipped, net 
or gross tons 
(state which) 

(2) 


Total in- 
voiced de- 
livered value 

(3) 


Freight 

charges 
added to base 

prices to 
arrive at in- 
voiced value 
per column 
(3) 

(4) 


Actual freight 
paid or al- 
lowed on 
shipments 
from mill to 
destination 

(5) 


Total extras 

included in 

invoice 

delivered 

value per 

column (S) 

(6) 


DISTRICT 


Tons 


Amount in 
dollars 


Amount in 
dollars 


Amount in 
dollars 


Amount in 
dollars 


















































•Connecticut (except Fairfield 










































































































































"^ 




























































































































































































































Maryland— all other pxcept 2 









































































■Georgia 













• Distribution of selected steel products by consuming districts is requested for all shipments direct to 
consumers excluding exports, f. o. b. inili sales, shipments to other plants or warehouses of the same or 
affiliated companies, and shipments to jobbers' warehouses. Consuming districts are defined in schedule 
enclosed with this form. . 

35 



36 aONCENTRATION OF ECONOMIC POWER 

Form B. — Distribution and pricing of selected steel products — Continued 



Domestic shipments to con- 
suming districts 

(1) 


Tonnage 
shipped, net 
or gross tons 
(state which) 

(2) 


Total in- 
voiced de- 
livered value 

(3) 


Freight 

charges 

added to base 

prices to 
arrive at in- 
voiced value 
per column 
(5) 

(4) 


Actual freight 
paid or al- 
lowed on 
shipments 

from mill to 
destination 

(5) 


Total extras 

included in 

invoice 

delivered 

value per 

column (S) 

(6) 


Florida 


Tons 


Amount in 
dollars 


Amount in 
dollars 


Amount in 
dollars 


Amount in 
dollars 










































































Louisiana 












Oklahoma 












Texas 
























Idaho 
























Colorado . . . -. 
























Arizona. ., .. 












Utah. 












Nevada. 












Washington 












Oregon 












California: 
Southern 












Northern 






^ 


















Total of above items .. 
























Other shipments: ' 

Exports .. 












F-o. b. mill sales' ... 












Shipments to plants or ware- 
houses of same or affiliated 
companies * 












Shipments to jobbers' ware- 
houses - . - 

























' These items need not be repeated on reports for each basing point. It is understood that they are not to 
be included in the distribution of shipments by consuming districts within the United States. 

3 *'F. 0. b. mill sale" means a sale priced at the mill and delivered to the customer at the mill without 
freight allowance. 

« "Afliliated company" means any company described as a parent, subsidiary, or affiliated company in 
the reporting company's annual reports or in any registration statement filed by it with the Securities and 
Exchange Commission. 



OONCENTRATION OF BCONOMIC POWER 



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^ O CO cT O co' O OO Tf^" 

C^;Du^-HtCCTiTtt<N 
1-t CO >— ' CD —I ':D 



OiOit^COOsOOOiOCO 

c^aicor--ioo*cco 
c^" TjT 00 ^^ TjT o 



lOOO-^t^C'lcDQO'-f 



O ro -H c 



&2 






^ m CO 



3- H =a. 






'oog 
J o o - 

S — 1 M ^ 



SS 
■^ a 

O 03 

■^ O 



•^ CO C0 05 cq 



COOMCOi-H 

r-^ o o as -^ 

-* — I 00(N CO 



Ol — 1 ooco ^ 
CO to 03 CO 



tooo t~.to oc 
CO ^ t^ CO o 



u^ »0 CD ■* CO 



■^ t^ t-^ Oi t^ 



CO •<»' c< >o t- 



, _ o o o 
T30oco-<oq« 

-^ w-^ CO ^H CO ^^ co^r-f CO — ' 



o 



OONCENTRATION OF ECONOMIC POWER 



39 



O CO 00 00 r-* ^ »o 
^ CO "rS O CC C*4 rP 
Tj< CO -^ ^ 1— I CO c^ 

O »0 CO* CO' 00*" o" V 

iO Oi »0 O CO <— t 

CO CO iO (N 



t^ » C^ 05 r-l CD CO 
CO O CO -^ CI •-' -^ 



O CO C^ Q CO C<l O 
CO i-H O ^ CO -* t- 
O CO t^ 00 lO O (N 

i-T -«j«' r-T CO ^ ci c^ 



t- CR '^ O r^ Oi CO 

N CO CD r- "0 00 c> 
00 Tt< a> CD CO oo CO 



Tj- o C^ CO o t 



S CO Q 00 00 



CD t^ r^ 

—•OS 00 

<M 1-H ^ 

co-^'o" 



o CO CD r- »o c^ lO 

lO r- M 00 Oi lO 03 
OO 00 lO CO Oi CD CO 

CS '^ M -^ -* CO 



CD 00 I-^ 

S coS 
oToo o' 



c» O r^ t^ ■* c^ (M 

r^ CD CO 00 00 00 t^ 

CO "^ oT lo" H*^ .— r 



o 05 o 00 r- t^ lo 

t^ Tf CO C^ Oi CD 1— I 
■«*♦ 05 ■-< OS CD CO lO 

o" oT •-'" cT oT n'cd" 
oo r- (N ^* 

t-H coco : 



1-1 lO o r- (N CO ^ 



Tt* ooo 



CO CO CD W 



C^ CD C5 CS Q CO C 
CD t- -^ t^ C5 1-1 



'SS 



1-H ■>»< 



loo 



'S^' 



*c^^ 



CD— •lOC^iffl.QCNift 

'^i-t'^QoaiSMcD 
cot^t^CSco-vc^— I 

lo ^^ i-T o CO irT GO 

CS O o* Oi CO »0 
r-t lO TJ< lO O 



-■^00Oi-'t^(Nir> 

J O Oi 00 C^J t^ t^ CO 
CO Oi t^ O CD CO C^ 

»—"■ rC q" oi" lo CO 



CO CO CO »ft c^ c^ c 



i C^ Ql CO 00 »C CO 

^ ift »o lA O 



f-H c-1 r^ CO Oi c 



CO r^ ■^ CO CD 



3 OJ ^ JO CS 00 Tf M 
» t> O CSl t^ *C Ol O 

N CO r^ lO o w o 

i-H CO ^^ Cfe 00 ^ 

^ ^Nc5co 



C0»0C0C^QiO-^O 

t^f-HTTCD^iTj-OieO 
COOt^CO-^^iOTj* 

tO^COOi o" co^c" —T 
N p r- c^ CD 00 



CS iC -'J' iC o 



co^ CO'"** 050 cow 

ll I-HCOMrH 



_ o o o 
o ^- o -c 

OCOr- Q 

'-< o o cc 

mesQ 



-^ _ M 



'-JO - O 73 

■ O o e^ ^ O o c3 

2"'" o o'^^'o 

OO-^^-tiOOO 

*:oooo - -o 



' _; o '=. O T3 
Ht- 00*^-t>QOO 

^ .=: ■" o o o 5 '=i°-o 



■Cts o 

53 g C -w 



gi-- 

Too 



c o 5 
oo o 

-o'-O 



c o S 



E- E- 






O Q> 



40 



OONCENTRATION OF ECONOMIC POWER 



0^0005(MOr-00 









OS O C3 ^ O O *-H C 



OiOO (£> ^ O 
O •— ' 00 03 CD CO 

CD "^ '<:^ W (N 00 



iC (^ lO W3 C 



Tf CO a> CD r-( 

CD CD (O iQ lO 



0^ o 



CO CO CO CO CO c*i ci 



CDOOOOOOSCDOl'-* 

OOCSIOSrHOlCDOOC^ 

1-1 CO CO CO cs c4 



O CN GC C^ CO t^ 

C4 r-K C^ CO r-4 ^ 



QO O CO i-H -H 
i-«0»OCOQO 

i-JcOMrHr-i 



.5P-2 



cDOi«— lOcDGOTf^H 
cO'^^-cocor^OJ-^ 



Ol-«*<iO»0»OCDC*<i-( 

coco—i^oir^cooi 



O C^Ci lO O -^ 

CO *o O ^ CI Oi 

lOcDCD^-^ Ci 



CD «— I Oi ^ «D 



C0i-»00i-'CDcD"*O 

c«Tf<cccoci-HC<i.-H 



CDCO-^t**OiOrH(N 

c4 ^ c^ ci —I ^* o o 



CO -^ O0iQ0»O 

Tt^ ci CO c^i o 00 



OiOOCXSCfl 



rHiO<MCO00C5I^C^ 
I-HOOOOCOOCOOSCD 



CD'tJ^CO-^uOTT'dCO 



•^OOCOOSTjl^-iOt^ 

^r^cooscooooso 



(M >0 CO CD CD OS 
CD Ol t- <M 1-1 t>- 

oi cs -^ c4 CO -H 



r-^io cDcDci 



coiooou:>OTf05t^ 

C^t^COOi'-ICOCirH 
o6cdcDT^'Tl«COr-Ji-5 



co-'^^r't^cDOcoo 

Tt*OiOO>*0<-HCOC^ 



00 ''J* »0 CO CO ^ 
CO iCJ <M Oi QO W 

t^ lo CO 1-i csi ^ 



OO »-l CD »0 ^ 
OOO'MQO'^ 

CDCD lO Tji CO 



COOOSOiOOOO— <os 

cDt--ococ»co-^r* 



CD»diO*0»0-^'*'^ 



00'*t^»O'«*'CXIcDO5 



CD*O*Ou0*O''a<'«S<"^ 



O t^QOi-" Tf -^ 
CO CO Oi »— < oo »o 

--H O O t^ CD ^ 
CO »o o ^ ■^ Tt* 



i-HOO-^ ^co 
lO 05 CD C^ lO 

(N lO I^C^CD 

t^ l>- CD CD *0 



i- O CO -• ^ ^ w 



OCO ^ Q 

-^ C O CO 



-; S" 



Si-, 0< 



> *- o o o 
>o .—. o 

I C5 ^CO ^ 



d§> 



OOM— '00<S "a 



C'-] !f o o o o °.^o 



oo o 

_ § o CO rH o 

O OCO "-I O O 03 
o o "" ~ 



M tjOCO-"-! ^ _ 

'O rf-1 ^ O O +J *2 O O O 

^ .i^ ** o o o o '=.=lo 



(-tirt 

■On 



CO 1-t CO ^-1 



CONCENTRATION OF ECONOMKj POWEH 



41 















* 1— I CO CO C^l M 1-H CO 



cor^-^cooi^ocoo 



ocooo o c^ 

'<*' cc c5oo w 

Oi 00 CO c^ ^ 

•—I CO O O OS 



c4 CO CO c^ <N c^ *-5 1-H 



500 OCi O 00 CO C CO »o 



coco(N(Noooor^ 
— 'cooo^ooioiocr^ 



O CS C^CO OS 

O iC CO 00 CO 



COCSJC^I .- ^ 



iOt--^'ffOOOOCD"«fO 
0>-^'-«OCOOO'^000 

OS OS oi t^ CO Tfl ^ CO 



t-HOsco^-oooeocD'^io 

COCOCOC^»Oi«OTPC*^iO 

■^ oi r^ CO lO Tf -^ io 



■-i'OOcOiOOOOOiCCOO 
lOCD-— 'COC^COiCCOO 

c4(Nc6odoo;oC:Cio 



OSiC-^O— iCOCOTt<CN 
t^00<NCOi-''«r'i*'— 'C^ 

c4(>ics(NOioioio-^ 

CDcOCOCDiOiO»OCOCO 



. lO CO OOCO O O t 



O CO CO i-H »-i 



ooooocooscocceoco 

.— 'lOI^COCOCOCSCOiO 
t^iOiOTf'cOC^COr-i 



lOcOOOiCOOcOOO 
OCSiO^OCOOSI-* 



ccc^eoOt^Tf^osTt* 
ect>.^r-.ioco.-'co 

i-^osoot^o-^cooi 



OOOOOCOCOO»COS 
TJ'COCSOOOSCOCO-^ 

WCO--icJCT3 0iOsO 
^'"^■^f'^COCOCO'tt* 



osO'^c^t^coosr^ 

OC^i-'CO'-HOiOcO 
Oi CO »C' Tt* 1-1 CO ^ i-H 



COOS'-'OOt^COOlt^ 
MOCO^OCOCOCOOO 



00 t^ CO lO CO CO c^ 



^f ^ OS iC oo 

o o r^ o CO 

CO ^00 t^ CO 



or- co^o 

.-. 1— I TT ■>«T' m 

<-H CO O ^ OS 
CO t^ CO CO i-Oi 



cs OO-**" C^iO 
CO CO IC C^ Tf* 

t-i Tji 00 CO CO 
CO CO Tf CO CO 



OOtJ^ M CO 
O OS CO »C Tjl 



os^oscoiMTf»oooe^ 

OSOSCOTf<C^COCMC*<C^ 

h-Iof5os(Ncoc6cot^co 

CO^OU^iO^OiO^O^-^ 



lOCOCCOOOrt^C^OOS 

1— o-i-^cococoeocvic^ 
co-^'ocd-^c^c^c^o 

COt^t^COCOCDCDCDCO 



OOSCOCOt^CMCOCO 

oooot~*t-*r'-cocoo 



OSCOMO'^OSCOCO 



CO CO CO CO i. 



CO t^ r* W5 O 

»iO 00 ■»*< 00 CO 

c^oswiosi^ 

CO*^ 1— I C3 05 






CO .-.CO r-l 






oo'- 
P"- o ' 

O 0^^^ 



•^ CO 



., ^ o o o o . .0 



„, . . _ o o '-I-; 

"•' , ' O O C<3 1-1 C 
"^ >-' CO 1-1 CO i-H CO r- 



T3>-'cO 



00 
co^3 
O 0+-' 



42 



dONCENTRATION OF ECONOMIC POWER 



■^00 00 



Oo6coc<ico<3i»oo6 



> M 1-H CO r^ o« — * .-H 

I -^ t^ (35 lO w CO 00 



^FHrH I CO 



!5S 



t^c5|COiOC^Oi»Oi-i 

cdioooooaiio-^cs 






^ COOCO 



2SS5!t 



CO— *r^to--*Nh*-H 



;:s 



?5=: 



»o.-i-*t*coeoooTrc^ 



CCC^f^r-»rt<N(NcO 



S^ O CO CM CO "** OO 
00 Oi CO t^ 00 1— I 0> 

cD-^CDcOr-'urioiO 












o>ooooooo 



o 

o 



O O 03 -JJ 

-_8 o 

-o 



•a— ' o o 



sooo 



' OO OO r^ O O <^ 



OS 



sl«-^ 



lOom -H o o 05 

Q.t-1 r: o o o o .^o 



as 



OJ3 



E« 



01 .5 



08 o 



CONCENTRATION OF ECONOMIC POWEH 



43 






1-1 -^ 00 t^ CO 



»00 



+J*C) 






^-^Oj3i(Nqococo 
i-tc^ooMt-<3c^« 

r-T ■^S^ Tj"*" Q CC t^ CS" 



M t^ o r^ to c^ 



r^ r- Tt* oi 00 lo 

CS .-H iO CO CO IM 

I CO Oi ^ OS »0 

^" of too 



ss 



— CO 05 '^ OOO 



O C^ 06 O »C CO » 



c^co<Nasr^c^or* 

r^-— (oor^eo^t--co 
coa;ooji>-coo»o 



■^ CD O) C^ CO 00 »o 

I-. TJ« .-H '^ CO r-l 



'SS§ 



OS »0 *0 CO 



CO —< OS 00 <N t^ 
CO C> ^ CM Tj< 

r-r-<jr:o'co''N 



C^COCOCMOCOQOCD 
TfWMiOCl—iCOO 

cm" oT cx5" ^ CO* '^'" »c o 
^.-it-oor^co^-«j^ 

CMCO i-hOS-^ 



OS^'«J"01COCO^OO 
-HCOCO!©000000 

i-T CM oi" i^o" t^ o r^ oT 

t-H Tj< o> CO r- CO »o 

1-H -^ OS t^ »o 



"^lO CO CM CO 



»-H CO r* »o CO 



cocMcorj4r-.t^Oieo 
»o-^osr^cooocor^ 

CMiO'<*«-^CMO00t^ 



■^ OS OS 00 o> o 
OCMOSQOOS^ 

rH t>» OS Tf Tjl O 



CM CD CO OS -H -**< 00 



f-i 00 CO CO *0 00 



•OCOOCOCO"*<-<t>- 

CO-HOS^CO'-H^'^ 

■<j<oosCMact*coio 
CO i-h" ic" — r oT fm cm" 

<— I CO t^ Oi lO 1-H 



CO O OS CO -^ *c t 



CO OSCM I^O CM O 

■^ 00 CO TT CO 



OS '^ ?0— 'QCM 
iO OS TT TP OS »0 

c) o r^ CM OS 



C4CS00 



>-2 



CM-<**t^tCOCOCOCO 

i-tOSOSh-O-— t'«t'^ 
fOi— iCOOOCMOlOOr- 

C0^TjJ"t^C0'"t^»O~o"'-H" 

^CMOSTt<CMiO'rOS 
COOOCOO^ 



OSCOiO'-'OSCMCD— « 

<©r^O'*f00cDc0»O 
t^OOOOiOiOCOOCO 

f-TirTcr^'-rostoar 

1-H CO '^ -f -V — ' •-» 
M *0 .-HO0CD 



t^ h* r* to i-H lo 

OS I— t 00 CO t^ ^-1 



^ ■^ 00 '-H CO 






■^ 00 ;^ o 00 c^i r^ 



^H CO «D t^ Ol O 



> O »0 t^ 05 -H M 
; Q t^ CD c? Tf C^ 

s « r^ 00 c5 CO oi 

^TiTo-^'oO cc" 



00 t^ 05 CO 00 CO 

Tt« r^ as fo W5 

CS 00 00 t- OS 



'^S 



■*co cs (N es 

coooojc^ o» 



S2' 



CTiC^CDM-HC3>C^CO 

PM lO '^ 00 CD Tf4 f-H 



rt rtco — 100 -^l 



io-o 

) o a 



S _r o o 

co-a _ o o-w<->ooc 



4 CO ^ CO »-i c 



o ox o - 
) o o o '-i - o 



- e<5 



■'COt-HCO'-iCOf-HCO<-< 



4^ 

2-0 _ o 
hP«,S 



44 



OONCENTRATION OF ECONOMIC POWER 



i-H CO 00 OC 1-H 1— . -^t* 



i-H ic CO lo en o 50 

fh M Oi O Ov 



C<I CM .— ' t- o 
C*4 t^ C^ CO 



c; o 
»-. en 



r^ ^H OS 

iO ^ lO 
1-1 cs ^ 

CO t^oT 



in Tj< OS 

O —(^ 

r^oTio 



iC-^t^-^'COtNuOCMCMiO 

i--r^c^ior--T}<iocsr-^ 

t-iCMt^CDiOCOOCOO 
f-T irT i>r CO (N" o" 1^ »4" 



CCOCMpOO-^COi-H 

*Oi-hco?5»oow:icm 

U3 -^J. CM r-H lO CO CM 



r^ CM CO CM t^ 

cMoot- '^ r- 

C^ lO (M OOCO 



-— 1 Tji 00 CO CM 



CM 40 CO CC CO -^ 



lOCMCMi-HOStOCO-^-^ 

r^ot^cc^cDoooi^ 

COO^cD.— t0sc0'«*<0 



^OSOGOTfOs<D«C 
^ uo o CKi OS CO <-< 



OO^COOUOCiCMco 

f-'^i— icOOSCOOO 
i-iOOCM»Ot~*Ir^— «00 



1-. CD CM -^ iO lO CM 
.-t CM t^CO O 



CO OS CD 00 '-I 
00 --I OS 00 t>-. 

CO O OS o 



ooooo 

(^COCM 
CS lO OS 

CM^OC "f 

f-H r^CO 



t>-ioosiococot--ooos 
i>.cocot^r^ocoooco 



5 00 •<*" 00 UO 00 
■ ^ ■ "IQC 00_ 

; coos -^ 



< OS O: ^ CO 00 00 ^ 



COt-HCOCO-^OOOSOs 
^CjOOSCMi-hlOCO 

osco^oo-^f^oco 

■^ cm" CO 00 o" O CO 

r-1 *C CO rf CM r-l r-t 

•-*CM O ^O 



OseoCM -H ■? 
OOt-H OOC<l 



CMOO •-< 

Tt< r- 00 

r~-roo'"oo*" 



uocoosuocD-^r^^oo 
cotocooocor— cDioco 
cooscD^or^cococo-*?* 

i-T TlT CM O CM O CO CO O 
CM 00 CM -^ OS r- 00 



h-ooscMt^eocoos 
COCScCOC<)cCCMCO 
t-(^t--CC»CC0TpcO 



^ N CM 00 --H 00 00 



o^ oooso 

Q O CO CO CO 
^ 00 CM ^- CO 

i-Tioo'o'cm'' 



9 ca 



00^:0 
O CO CO 
OSOSO 

CO t-Tco" 



OOOOOOOI^Q<-<CMOS 

lOt— TPOiOi-4COt--0 



CMCOCOtJ^CMOsOOO 

^ CO CO .— ' CO CO --H 



CMr-i.-^or^«^os»o 

CMcOOOMiCOCOrJ^OO 
rHCOt^CO^OC-JI^-iO 

1-4 CO t'^ ocT oT i-T ocT 



OS r^oo— ii— t 
O w 00 -^ •* 

CO coco O CO 

cm' 00* Tj-' 00 



g 3 

1^-^ 



q tjo c3 

O 03 OJD 



C^lCOCOCOOSOWO^HCO 

t-«^tCCD'X)OCOC'1^ 

osoo^Oi— "COt— r-o-— < 

•^ CO os" cm' — '* ^ — r 

CM CM --H O OS lO . 



,^ Tp O OCO C4 I 
r-TCMCM'r-r 



u:>CMCD>OOOCDr-<CO 
O»m0c000-^COCM 

C-l-^OOOCOCMCO 

r-n' t-^ a> co" tc — TcT o 
r-t uo Tt" r^ r-» Tf t^ 

1— I CM O 'O O 



•-H OS OOiO OS 
1-t TT O^CM 
»0 CO Tf'lCcM"" 



00 00 lO 

w 'tr CO 

OO lO T?* 

CM"C0C£r 



CMOOC^)OCOOS»COOO 

t~-»c — CMrrr-ioast— 

'^J'CMCMOSrJ^COCOO; 

CM r^r t>r oT '** lo o 

^ CO -f CM rt 



*OCC jOiOwOSOO"* 
•-•COTycOCMCOOOCM 



CO ^ CM ooo 
t^uOCM -^ C5 

coco CM CO 



ag 



m 00 N TO O t^ 04 



rH Tf T»< T»l CS CO 









oo o 



, ooo . 



oo o 
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CO r-l 



t^ ? 



5> S ' • 
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OT3 

O CO — I o O C3 

"^ o o ■^ ■^ O 
o-i- -Soo o 

"oo§8°- 
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CO — < CO '-H re rH 



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■Jh-'CO i-i 



oo s 
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So-o'-o 



oo CO -^ O O 03 

"- oo^;:fo 

o c *; ■►-^o oo 

* ^ CO T-( 



CONCENTRATION OF ECONOMIC POWER 



45 



«£) CO CS (TO " C5 
0> OiCO Oi C^ O 

lO Oi CO" Oi lO* lO" 
CO CO Tf Q "t' 

csc5 CM 



CO o »o 



COCOCO(NO-^C^— ' 

»o' o oi' ci cc »o" 00~ 

CS QO 3C 05 CO lO 

1-1 -^ Tf *Cl O 



t- CO r-. CM CO t- 

■^ CM ^ CM r-^ CO 



< lO O CO CO OS CM t-^ 

cvi r-. ^ — * r- CM 00 

CM OS t^ CO Tf- t^ 



OS -^ »o 

CO r-" — t 

CO -^CO 

T-Tco'co"" 



CO CO t^ CM r^ I-- 

CO to cc lo CM r- 

■^ lO lO tJ* O CO 
CM'-^I^'^OO 



r^.-«c>"0'-^r-CMira 

CMOt— r^osr^t^co 

CO 00 CO Tf CO CO CM 

i-rtC-fa^oTio CO 

r-i TPCMCMCM 



O CM l^ CO CO 00 
CD iO 00 CO OS CO 



CM O O CO O lO 

CM CO CO CO O 



■<*< r- ^ 

1— COI> 
Tp r-iCM 

coo"t-r 



COCOCOOCMCMOr* 
COCO-^COOSf-CMt^ 
C010.-HIOOC0C0G0 



S --^ t^ CO 00 tC CO 
CMOS O O -^ 00 

rH lO lO »0 O 



OO OS 00 CO .-H CO 

^:*< lO -^ ^H Tt< CM 

riOC CO O CM O 

CO as"t^oc"co''oo 

rH CM 00 t^CO 



■'j^TfOoO'-iiOOOS 
r-iCM'^CMTj'OOCMOl 

.-< »o Tr CO CM oC' Tj^ 

I I tjh'co -<**"co''co 



«oco t^ 

^ CM O 
OSCM 05 



CO O O O lO 00 

00 CO m CO o o 

CO CM 00 ■<** 00 O 



^coo 

COOiO 
OS CO 



CDcOiOCMiCOO-^Cl 
CM 1— Oi O t^ »0 OS *0 



CM CO to CM C3> 



cr. "^ crs 00 CO OS 

CO lO 00 CO CM CO 



TT CD CC " CO 



lO Tf CO 

t^ ^ oo 

TfCM-H 

co"'-r -^jT 



COiOCC TfCOiOTt^Q 
t^OOOCOCM'tJ'OSTO 
C0cO(N00»Ot-(IO'^ 

O CM* CO CD CO O '-'*" 

CM O CM CM CD 00 

CM lOiO UO O 



CO lO -rj- t* lO t^ 

■^ w "^ '^ ^ ^ 



r}<iOt~-CD00C^'-*OS 

»0 1— ' CO -^ 00 o o 

CM O OS OS CD r- 



^ ^ CO OS ^ t'™ 

CO lOCOTj- 1-t 



COOCMcOt-OeOCM 
,-1 i-H CO CM T-H 



oo o 

i o o ^.^ ^ a 

O O CO ^- O C C3 
r O O-M-^OOO 

■"COWCOr-lCOi-HCCf-l 



oo o 

.-.S'-io-a 
j§o,«wa 

^ O CO .-' O O CO 

' o o *^ "*~* o 
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ja 



jom -^ ^ 



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Q.^— 1 O O O 
'-^1-' CO r-1 CO ri 



S°.o-, 

OCO —1 I 
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e Eh 



46 



OONCENTRATION OF ECONOMIC POWER 






OOOOb-COCOOKNO 



CO »0 CO F-H CO t^ 

.-H rH t^ <© -H O 

CO -^ lO CO CO t>^ 
lOTf rp Tt< ^ CC 



^T? 



»ocoOM<ccr-oO'' 
cs' cs' c4 c4 c<i r-i 



CDQ0O>«D^»OOS— < 



i-H CS W T-H r-t 



1 9)00 00 



CO— I CS W —I 









OOSOit^t^^COT-H 



CO CO o o 00 o CO fi 



; c<i oor^ o - 



(N M rt 

0CO5>^ 



8CO OQ «-H lO r>. ^- o 
COM M o t-^ ^ o 

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Table 5. — Published base prices of selected steel products, February 1939 

[Dollars per ton] 



49 



Base points 




3 


-S 
2 


a 


— 
o 


i2 
1 

"o 

"o 
O 


Q 

-a 
1 
1 


a 

1 

2 
2 

o 

u 


.a 

■a as 

■So, 


O. 


Normal points: 
Bethlehem Pa 




42 
42 
42 




















42 


43 


■ 62 


43 
43 


"""64" 


43 








Buffalo N Y 




34 

34 
34 




Canton Ohio 














Chicago, 111 


42 

42 
42 
42 
42 


42 


43 


52 


43 


64 


43 




100 


Claymont, Del 




Cleveland, Ohio - 




43 


52 


43 


64 


43 


59 


34 




Coatsville, Pa 






42 






43 
43 
43 
43 
43 


64 
64 
64 


43 
43 
43 






ioo 














Pittsburgh, Pa 

Sparrows Point, Md 


42 
42 
42 


42 


43 


52 


59 


34 
34 
34 


100 


Youngstown, Ohio 








64 


43 


59 

61 
61 




Abnormal points: 




















45 
45 


66 
66 


45 






Granite City, 111 












102 


Gulf ports 


49 
52 


49 
54 




















53 


76 












52 
45 


























63 

























Note.— Wire rods and sheet and tin plate bars in gross tons; all others in net tons; tin plate is 100-pound 
quality. 

Source: The Iron Age, Feb. 2. 9, 16, 23, 1939. 



Table 6. — Effect of variations in capacity utilization upon man-hours required 

Man-hours 
T , , . .,• , required per 

Industry and percent of capacity utilized: unit of 

Iron and steel: " output 

55 to 60 100. 

60 to 55 105. 

45 to 50 111. 

40 to 45 118. 

35 to 40 123. 

30 to 35 127.0 

25 to 30 131. 

20 to 25 135. 

Cement: 

100 100. 

80 108. 6 

60 120. 8 

40 140.4 

20 181.4 

Brick and tile: 

70 and over 100. 

60 to 69.99^- 

50 to 59.99 101. 5 

40 to 49.99 . 109. 2 

30 to 39.99 115. 4 

20 to 29.99 130. 9 

Less than 20 145. 5 

Sources : 

Iron and steel. — Bureau of Labor Statistics, Monthly Labor Review, vol. 40, 
May 1935, p. 1161. 

Cement. — National Research Project, Mechanization in the Cement Industry, 
1949, p. 23. 

Brick and tile. — National Research Project, Productivity and Employment in 
Selected Industries, Brick and Tile, 1939, p. 117. 



INDEX 



Fsg« 

AUTOMOTIVE INDUSTRY: Strip consumption, 1939, tonnage 26 

BASE PRICE: Cutting of by steel companies, significance of 25 

Defined 5 

Published prices, discrimination in favor of large buyer 27-28 

BUYING POWER PRESSURE: Relationship to development of eco- 
nomic concentration 27 

CAPACITY UTILIZATION: Effect of variations upon man-hours re- 
quired per unit of output, iron and steel, cement and brick, and tile in- 
dustries ; comment, chart 9 and table 6 31-32, 49 

CONCENTRATION OF ECONOMIC POWER: Causes: price con- 
cessions granted to large buyers 25 

CONSTRUCTION INDUSTRY: Consumption of shapes and plates, 

1939, tonnage 26 

Least concentrated of Nation's industrial fields, absence of buying 

pressure 27 

COSTS: Steel industry, fixed, v. variable-costs argument submitted to 

T. N. E. C, summary 30-31 

DELIVERED PRICE: Defined 5 

DEPARTMENT OF JUSTICE: Questionnaire Form B; reduced fac- 
simile 35-36 

EXTRAPRICE: Defined 6 

FORD MOTOR CO. : Integrated steel works operated by 29 

FREIGHT ABSORPTION: Defined 5 

Indicator of competition . 33 

Variations in average freight absorbed per ton by size of shipment, 

February 1939; comment and chart 10 33-34 

GOVERNMENT PURCHASES: Price concessions to large buyers not 

off'ered to the Federal Government 28 

Structural and reinforcing steel, Federal Government leading buyer. _ 27 
INTERNATIONAL HARVESTER CO.: Integrated steel works op- 
erated by 29 

MILL NET PRICE: Defined 6 

PHANTOM FREIGHT: Defined 5 

PLASTICS : Steel replacement anticipated 25 

PLATES: Freight absorption: 

Variations, by size of shipment, February 1939; chart 10 34 

Price : 

Variations in average price per ton by size of shipment, Febru- 
ary 1938; chart 1 and table 8-9 

Variations in components, normal base point shipments, by 

size of shipment, Februaryj 1939; table 4 46 

Variations in price components by size of shipment, February 

1939; table 2 40 

Shipments : 

Tonnage and sales by size of shipment, February, 1939; table l.. 37 
Tonnage and sales, normal base point by size of shipment, 

February 1939; table 3 43 

PLATES AND SHAPES: Percentage purchased for use on projects 

financed by Federal funds 27 

PRICE CONCESSIONS: Large versus small buyer grants, relation- 
ship to development of economic concentration 25-28 

Relation to economic arguments of steel industry 30-31 

51 



52 INDEX 

PRICES: Pa&« 

Published prices: 

Selected products, February 1939, by base point normal and 

abnormal; table 5 1 49 

Variations in components of price, by size of shipment and product, 

February 1939; table 2 40-42 

Variations in components of price, normal base point shipments, by 

products and size of shipment, February 1939; table 4 46-48 

PROCUREMENT DIVISION, TREASURY DEPARTMENT: Pur- 
chasing policy and steel price concessions to Federal Government 29 

SHAPES, HEAVY STRUCTURAL: 
Freight absorption: 

Variations, by size of shipment, February 1939; chart 10 34 

Price : 

Variations in average price per ton by size of shipment, February 

1939; chart 2 and table 10-11 

Variations in price components by size of shipment, February 

1939;table2 . 40 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 46 

Shipments: 

Tonnage and sales by size of shipments, February 1939; table 1__ 37 
Tonnage and sales, normal base point, by- size of shipment, 

Februarv 1939; table 3 43 

SHEET AND TIN PLATE BARS: 
Price : 

Variations in price components, by size of shipment, February 

1939; table 2 - 42 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 ^ 48 

Shipments : 

Tonnage and sales by size of shipment, February 1939; table l-_ 39- 
Tonnage and sales, normal base point, by size of shipment, 

February 1939; table 3 - 45 

SHEETS, COLD ROLLED: 
Freight absorption : 

Variations, by size of shipment, February 1939; chart 10 34 

Price : 

Variations in average price per ton by size of shipment, February 

1939; chart 6 and table 18-19 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 47 

Variations in price components, by size of shipment, February 

1939; table 2 41 

Shipments : 

Tonnage and sales, by size of shipment, February 1939; table l.. 38 
Tonnage and sales, normal base point, by size of shipment, Feb- 
ruarv 1939; table 3 44 

SHEETS, HOT ROLLED: 
Freight absorption: 

Variations, by size of shipment, February 1939; chart 10 34 

Price : 

Variations in average price per ton by size of shipment, February 

1939; chart 5 and table 16-17 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 47 

Variations in price components, by size of shipment, February 

1939; table 2 41 

Shipments : 

Tonnage and sales, by size of shipment, February 1939; table 1_- 38 
Tonnage and sales, normal base point, by size of shipment, 

February 1939; table 3 44 



INDEX 53 

:SHIPMENTS, STEEL: , . ^ ^ ^ . ^*^ 

Aggregate tonnage and sales, by size of shipment and products, 

February 1939; table 1 37-39 

Aggregate tonnage and sales, normal base pomt shipments, by prod- 
ucts and size of shipment, February 1939; table 3 43-45 

Price average per ton, by size of shipment and products, February 

1939; table 2 40-42 

STEEL COMPANIES: Base price qutting, significance of /o 

STRIP: Automotive industry, largest consuming channel, tonnage con- 
sumed 1939 26 

STRIP, COLD ROLLED: 

Freight absorption : , ,« oa 

Variations, by size of shipment, February 1939; chart 10 34 

Price • 

Variations in average price per ton, by size of shipment, February 

1939; chart 8 and table C"'-~~ ^2-23 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 48 

Variations in price components, by size of shipment, February 

1939; table 2 41 

Shipments: ^ ,, -, on 

Tonnage and sales, by size of shipment, February 1939; table l._ 39 
Tonnage and sales, normal base point, by size of shipment, Feb- 

ruarv 1939; table 3 45 

STRIP, HOT ROLLED: 

Freight absorption: , ,rv oa 

Variations, by size of shipment, February 1939; chart 10 34 

Price: . x . • 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 47 

Variations in price components, by size of shipment, February 

1939; table 2 41 

Variations in average price per ton by size of shipment, February 

1939; chart 7 and table 20-21 

Shipments: n 1.1 i 00 
Tonnage and sales, by size of shipment, February 1939; table 1-- 38 
Tonnage and sales, normal base point, by size of shipment, Febru- 
ary 1939; table 3 44 

STRUCTURAL AND REINFORCING STEEL. -See Plates and Shapes. 
TIN PLATE: 
Price I 

Variations in components, normal base point shipments, by size of 

shipment, February 1939; table 4 48 

Variations in price components, by size of shipment, February 

1939; table 2 42 

Shipment: 

Tonnage and sales, normal base point, by size of shipment, l^ebru- 

ary 1939; table 3 45 

Tonnage and sales, by size of shipment, Feb. 1939; table 1 39 

UNITED STATES STEEL CORPORATION: Exhibits submitted to 

T. N. E. C, cost argument summary 30-31 

WIRE, PLAIN DRAWN: 
Freight absorption: 

Variations, by size of shipment, February 1939; chart 10 34 

Price: 

Variations in average price per ton by size of shipments, February 

1939; chart 4 and table 14-15 

Variations in price components, by size of shipment, February 

1939; table 2 .-- ^ ^^ 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 46 

Shipments: , , 1 0-7 
Tonnage and sales, by size of shipment, February 1939; table 1.- 37 
Tonnage and sales, normal base point, by size of shipment, Feb- 
ruary 1939; table 3 43 



54 INDEX 

WIRE RODS: Pa^e- 

Freight absorption: 

Variations, by size of shipment, February 1939; chart 10 34- 

Price : 

Variations in average price per ton by size of shipment, February 

1939; chart 3 and table 12-13 

Variations in price components, by size of shipment, February 

1939; table 2 , 40' 

Variations in components, normal base point shipments, by size 

of shipment, February 1939; table 4 46 

Shipments : 

Aggregate tonnage and sales by size of shipment, February 1939; 

table 1 37 

Tonnage and sales, normal base point, by size of shipment, Feb- 
ruary 1939, table 3 43 

YNTEMA, DR. THEODORE: United States Steel Corporation exhibits 

submitted to T. N. E. C, prepared by 30> 



...iSiSi,. , 

3 9999 06351 930 8 



mm.