"^^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.
GRAPHIC PRESENTATION
VARIATION IN AVERAGE PRICE
BY
SIZE OF SHIPMENT
8
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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
37
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CONCENTRATION OF ECONOMIC POWER
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. 0
60 to 55 105. 0
45 to 50 111. 0
40 to 45 118. 0
35 to 40 123. 0
30 to 35 127.0
25 to 30 131. 0
20 to 25 135. 0
Cement:
100 100. 0
80 108. 6
60 120. 8
40 140.4
20 181.4
Brick and tile:
70 and over 100. 0
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.
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