Study of Monopoly Power

INTRODUCTION

The Subcommittee on Study of Monopoly Power has been in existence a little more than a year. It was created because of the deepseated feeling that the Sherman Act and other antitrust measures failed to square with the economic realities of this day.

During the summer and fall of 1949 two broad-gaged investigations were conducted by the subcommittee. These hearings explored the over-all problems of antitrust enforcement, high-lighted the most striking failings of the antitrust laws, and provided an open forum for the expression of the views of experts on monopoly problems.

The results of this general inquest have already been gratifying. The House of Representatives overwhelmingly passed H. R. 2734, the Celler bill, designed to cement a gaping hiatus in the Clayton Act of 1914, which had had, over the past 23 years, a frustrating legislative history. Without dissenting vote, the House likewise approved both H. R. 7827, the Walter bill, which increased the maximum criminal penalties that may be levied upon violators of the Sherman Act, and H. R. 8763, the Denton bill, which added a 6-year Federal statute of limitations to the triple-damage provisions of the present antitrust laws and bestowed upon the Government of the United States the role of private suitor in a treble-damage action.

But aside from the positive action which emerged directly or indirectly from these investigations, the general hearings provided fuel for much future study in the Congress. The more subtle problems of monopoly power belied attempts at prompt and facile solution; monopoly partnership, monopoly by buyers, and conglomerate integration are subjects profound and complex in nature.

It was with these facts in mind that the subcommittee inaugurated this, its first in a series of specific industry studies. In the course of its preliminary hearings, the subcommittee had been told by the president of the du Pont Corp. that—

the only power corporations have, whether they be large or small, is the right to stand in the market place and cry their wares. If the customers find those wares good, they will buy and the corporations will prosper. If they do not, the proprietor will soon be sitting on the curbstone, whether we are talking about a large manufacturer or a roadside market.

On the other hand, a respected student, teacher, and practitioner of the law warned that

the fusion of competing companies permanently eliminates the competition that theretofore existed between them and only by the drastic process of dissolution and divestiture can competition be reestablished. Without effective control over the process of industrial concentration, our antitrust laws are doomed to utter futility.

To find some reconciliation between these opposits poles of economic opinion, to discover the precise legal formula to curb further economic concentration, to encounter face to face the true nature of modern competition, it was necessary to examine in detail selected American industries.

Steel was the natural choice for the first study by this subcommittee. Its story begins in the iron ranges of the Mesabi and ends at Cerro Bolivar Mountain in Venezuela. In between, it touches such great industrial centers as Gary, Pittsburgh, Detroit, and Birmingham. Its leading characters are almost legendary-J. P. Morgan, Judge Albert T. Gary, Myron C. Taylor. The industry produces a variety of finished articles which range from giant bridges to thumb tacks. It has a vocabulary of its own-I-beams, blooms, billets, structural shapes, seamless tubes, sheets-hot- and cold-rolled, bright wire, and skelp. The entire world relies upon it to furnish the essential elements of war and peace. Steel is the staff of modern industrial life.

In conducting the steel hearings contained in this volume, no effort has been spared to obtain first hand all relevant material bearing on the problem of monopoly power in the steel industry. The long list of witnesses includes Government officials, independent fabricators, economists, legislators, and the leaders of the industry itself. The panorama of the steel industry presented in these hearings will constitute an important contribution to modern economic thought. That this is true is due in no small measure to the diligence and devotion of the members of the Subcommittee on Study of Monopoly Power and the efforts of counsel and his staff.

Books