$36.37 1/2 Rails

President Wilson appointed Joseph Bartlett Eastman to the Interstate Commerce Commission as a Republican. In 1924 Mr. Eastman voted for La Follette. President Hoover reappointed him as a

Democrat. Mr. Eastman always admitted that he had no political affiliation, and almost everybody else admitted that the I. C. C. would be a far less potent body without Mr. Eastman. A hard-working bachelor and a patient, keen-nosed bear for grubbing out facts, he has long been known as the I. C. C.'s most brilliant dissenter. Though he is a frank advocate of Government control of the carriers, all railroadmen have a vast respect for Mr. Eastman's knowledge of their business. When President Hoover had misgivings about his reappointment, it was the railroadmen who became his stanchest supporters.

Last summer President Roosevelt borrowed Mr. Eastman from the I. C. C. temporarily to become his Federal Coordinator of Transportation. And when the President started to stir up the market for capital goods, he asked Coordinator Eastman to see if he could drum up enough orders for rails to tempt the four steel companies into shading their price from $40 a ton (TIME, Oct. 16). Efficient Mr. Eastman promptly came through with orders for 844,000 tons. U. S. Steel's Taylor, Bethlehem's Grace, Inland's Block and Colorado Fuel & Iron's Roeder, the only railmakers in the U. S., agreed to submit strictly independent bids. Rail rolling, however, is no cut-throat business. For eleven years the price never varied a cent from $43 a ton. Last year it was downed $3. No responsible steelman has ever volunteered an explanation of this amazing stability.

When all four steel companies handed Mr. Eastman their bids, they were all the same--not $35 a ton but $37.75. That was too much for Mr. Eastman, who has suspected for a long time that railmakers' profits have been inordinate. Last week he served notice on the railmakers that if they expected the Government to finance the carriers in large rail purchases, they could do one of two things: either cut the price to $35 or open their books to Government accountants to find out what rail costs really are. Said Mr. Eastman: "The facts that these letters bear a common date, that they name an identical price . . . and that this price is the odd figure of $37.75) point unmistakably to the con clusion that these letters were the result of consultation and collusion. ... It seems clear that these are noncompetitive prices lacking the safeguard to the consumer which competition provides. Manifestly . . . the [steel] code was not intended to eliminate competition. On the contrary, it is by its own terms a 'Code of Fair Competition.' "

While steelmen bitterly denied the charge of collusion, President Roosevelt stepped in to blast the deadlock in order to get men back to work. He proposed splitting the difference squarely in half with a price of $36.37 1/2a ton. The steelmen agreed. So did Mr. Eastman.

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