Steel Tsar?

Almost every U. S. business has its local and national trade association. At their best they are the American Bankers Association, the National Automobile Chamber of Commerce, the American Petroleum Institute. At their worst they are criminal rackets like Chicago's Master Cleaners & Dyers Association and the Greater New York Live Poultry Chamber of Com merce. Not much publicized are the Better Bedding Alliance of America, the Hickory Handle Association, the South western Peanut Shellers' Association. In the mighty realm of rolling mills and blast furnaces is the American Iron & Steel Institute. To head this trade group Rob ert Patterson Lament last week resigned as U. S. Secretary of Commerce. Presi dent Charles Michael Schwab will retire to an inactive chairmanship.

Longtime head of American Steel Foundries, President Lament well knows the highly competitive steel business. Un like his predecessors he will devote all his time to the Institute, will receive a large salary. Hitherto the Institute has played a passive role, gathering statis tics, urging standardized practices. Twice yearly its members convene to hear papers and, until his death, the scoldings (for price-cutting) of U. S. Steel's Judge Elbert Henry Gary. But with mills running at a fraction of capacity, steel companies have fought like jackals for what busi ness there was. Price-cutting, price-shading, concessions to favored customers, indirect rebates have demoralized the trade. Though steelmen testily deny that they are enthroning a "tsar," President Lament's chief job will be to whip steel companies into a strong and united price front, stamp out the buyer's notion that he can always wheedle a profit-sucking concession, encourage him to take on normal inventories. Said Myron Charles Taylor, biggest steelman of all: "... A decidedly progressive step. The Institute . . . should prove increasingly successful in its activities."

Forbidden by anti-trust laws to stabilize industries through monopolies or cartels, U. S. businessmen have turned to trade associations. If the industry is composed of numerous small and weak units (building, laundry, newsstands), racketeers often bring about stabilized conditions for a stiff price. In larger unit industries, the leadership comes from within. Though encouraged by the Department of Commerce and the Federal Trade Commission, trade associations are ever eyed suspiciously by the Attorney General's office. The potent Bolt, Nut & Rivet Manufacturers Association was dissolved. Famed suits are pending against the Asphalt Shingle & Roofing Institute, the Sugar Institute (TIME, Feb. 22). Charges brought are generally "combination and conspiracy" to restrain trade or efforts to fix prices.* Even the steel industry has drawn Governmental fire, for allegedly pegging the price of rails at $43 a ton since 1923. Through the twilight zone between legal co-operation and anti-trust law violation, President Lament will have to thread his way. Knowing that he will be supported by President Hoover in his efforts to resuscitate a prime industry, few steelmen doubted his surefootedness.

P: Steel ingot production in July was down from 1,799.409 tons last year to 792,533 tons, a low record. Steel mills operated at 14.66% of capacity against 34.17% last July.

P: Last week U. S. Steel announced that it had abandoned large ore reserves in the Lake Superior district. Reason: to avoid taxes. For the first half of the year taxes on all its Lake Superior ore reserves totaled $4,800,000.

P: Said Iron Age last week:

"Not withstanding such unfavorable factors as a further decline of 11.8% in pig iron production in July, a drop in steel ingot output this week to about 15%, a recession in the price of heavy melting steel scrap at Pittsburgh, a further falling off in automobile production, and the failure of steel and pig iron bookings to show any noticeable change for the better, sentiment in the iron and steel industry remains buoyant."

* Not to be confused with criminal suits brought against racketeering associations for restraint of trade, in which jail sentences are often secured.

This file is automatically generated by a robot program, so reader's discretion is required.