Uncontradicted

German steel makers, last week, had cause to smile at reports, emanating from the U. S., of a proposed combine to control U. S. iron and steel exports.

According to the U. S. interpretation, the combine (including the U. S. and Bethlehem Steel Corps.) was to be organized under the provisions of the Export Trade Act to prevent competitive price-cutting between U. S. steelmen in European markets. Through consolidation of foreign offices, elimination of duplicate staffs, considerable economies might be effected. Thus the U. S. would be in a better position to compete with the rejuvenated German steel industry. (TIME, July 2.)

But German magnates thought they knew another and better story. First in their thoughts, foremost in their speculations, was James Augustine Farrell, president of the U. S. Steel Corp., for 35 years an expert in marketing U. S. steel abroad. In 1893, Germans recalled, it was the 30-year-old Farrell, then general manager of the Pittsburgh Wire Co., who brought his company through the panic by selling half the plant's output in foreign markets. By 1901, when the U. S. Steel Corp. was organized, Mr. Farrell was recognized as the outstanding candidate for the post of foreign sales agent. In 1903, he became head of the corporation's export subsidiary, the U. S. Steel Products Co., and increased foreign sales from $31,000,000 to $90,000,000 in 1912, to $200,000,000 in War time, to well over $85,000,000 in 1927.

This spring, Supersalesman Farrell, president of the corporation, went to Europe. Ostensibly, so far as financial writers could discover, he had no more subtle purpose than to "observe conditions." U. S. steelmen had been alarmed by the vigorous recovery of the German mills, which were threatening severe competition with U. S. industry. It was, therefore, no great surprise when the cryptic announcement of the export combine closely followed Mr. Farrell's return. The combine appeared as a typical Farrellian stroke in the campaign to develop the foreign market.

Mr. Farrell failed to contradict this interesting and plausible theory. German makers were equally discreet, equally silent. But the suspicion grew that in his latest pilgrimage abroad, Mr. Farrell had played a new role. He had been the reverse of a salesman. For once, he had studied, not how to sell more steel in European markets, but how to export less steel, more wisely.

In this light, the suggested combine took on a new color. Suppose Magnate Farrell had made agreements with German makers to keep greedy U. S. hands out of European markets, in return for promises to keep foreign steel from offering serious competition in U. S. markets. Suppose the export combine was for the purpose of making these agreements effective. Suppose the Federal Trade Commission, to whom the combine application was made, should view such agreements as potent and possibly dangerous aids toward controlling domestic as well as foreign prices.

These suppositions, both curious and piquant, last week were the subject of private, but not public, discussion.