period of their lives when their active years are past. The mere fact that they own a part of a company doing a national business in no way changes their individual character of their right to be protected from undue Government interference with their private affairs. United States Steel has outstanding 3,602,811 shares of preferred stock and 26,107,756 shares of common stock. The common stock was split 3 for 1 in May 1949. In every part of America and in every walk of American life, United States Steel stockholders are to be found. They include United States Steel's own employees, retired workers, widows, children, veterans, farmers, business and professional men and women. Many of them are small-business men. Whoever and wherever they are, they have exercised the democratic opportunity of free men and women to invest their money and share in the profits-or losses-of United States Steel. The management of United States Steel has a duty to conduct its affairs to the best of management's ability in protection of the interests of all stockholders, including these numerous individuals. United States Steel is owned, not by powerful financial interests, but rather principally by a large number of average citizens scattered throughout the United States. No individual stockholder of United States Steel holds as much as three-tenths of 1 percent of either its preferred or common stock. Nine out of every 10 stockholders are individuals. Nonindividual stockholders include charitable and religious organizations, foundations, hospitals, libraries, insurance companies, educational and fraternal organizations. Nine out of every 10 holders of preferred stock each own 100 shares or less. Three out of every four holders of common stock each own 100 shares or less. The average number of preferred shares held per stockholder is 47. The average number of common shares held per stockholder is 145. (After the 3-for-1 stock split of 1949.) There are United States Steel stockholders in each of the 48 States and in the District of Columbia. There are stockholders also in more than 50 foreign countries, many of them Americans residing abroad. In Pennsylvania and Illinois-areas of major United States Steel plant operations where many stockholding employees reside and in New York-an area of large population-the proportion of stock held is higher than in other States. A State-by-State comparison-even including these three States-shows that the relative number of shares of common stock held by those residing in each State is in close relationship to the population and to the national income of that State. As shown on the last page,' such comparisons emphasize the widespread representative ownership of United States Steel by the public. STATEMENT BY UNITED STATES STEEL CORP. CONCERNING ACQUISITION OF BOYLE MANUFACTURING CO., PETROLEUM IRON WORKS CO., AND BENNETT MANUFACTURING CO. The desirability of entry in to the drum and pail business had been considered prior to 1938, when as a result of starting up new hot strip mills and cold reduction mills at Birmingham, Ala., Gary, Ind., and Pittsburgh, Pa., problems of conversion from ingot to finished sheets and tin plate without excessive waste of material became significant to United States Steel. It had become clear that specifications for the new type products would require a substantial portion of otherwise perfectly good ingots to be wasted unless some outlet were developed for them. It was concluded that such an outlet would be available in the manufacture of drums, pails, and the like. When the Boyle, Petroleum, and Bennett properties were offered for sale, United States Steel took the opportunity to solve the problem which by 1943 had become of even greater importance because of the interim completion of additional continuous rolling facilities. In the working out of the continuous rolling program, United States Steel sold to others 15 plants which were no longer suitable for its purposes. Boyle Manufacting Co., fabricator of steel barrels, drums and pails with plants at Los Angeles and Alameda, Calif., was acquired in 1939. These plants had been obtaining sheets from United States Steel's mills at Birmingham, Los Angeles, and Pittsburg, Calif. 1 The tables which appeared on the last pages of this statement are in exhibits S-306 and S-307 in Steel Exhibits, pp. 657-658. STUDY OF MONOPOLY POWER WEDNESDAY, MAY 3, 1950 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON THE STUDY OF MONOPOLY Washington, D. C. The special subcommittee met, pursuant to adjournment, at 10 a. m., in room 346, Old House Office Building, Hon. Emanuel Celler (chairman), presiding. Present: Representatives Celler, Wilson, Michener, Keating, and McCulloch. Also present: Edward H. Levi, counsel to the subcommittee. The CHAIRMAN. The meeting of the committee will now be in order. Our first witness this morning is Mr. Ward S. Bowman, Mr. Bowman is a member of our staff, an economist now on leave from the University of Chicago. The material Mr. Bowman is going to summarize and submit to the committee has been compiled from data furnished by the United States Steel Corp. This summary is in accordance with an agreement between myself, as chairman of the committee, and the United States Steel Corp., in order to minimize the amount of disclosure of company files while still satisfying the purposes of the committee. We, of course, have reserved for the corporation the right to correct, criticize, or comment upon any of the material which Mr. Bowman presents for us here. The data covered, I understand, is in two broad categories, one having to do with capacity production and shipments of steel products, and the other with financial operations, including investment and earnings of the United States Steel's operating subsidiaries. We will be very glad to hear from Mr. Bowman. STATEMENT OF WARD S. BOWMAN, MEMBER, SUBCOMMITTEE STAFF Mr. BOWMAN. Mr. Chairman, these tables have just been mimeographed and I understand that they will be ready any minute for members of the committee. As you stated, I am going to present two sets of tables. The first has to do with a summary of the relative participation of the United States Steel Corp., with regard to capacity production or shipments, and then there will be some indication of the relative position of the corporation in particular areas on certain products which have been 1 These two sets of tables are exhibits S-308, S-308A, S-308B, S-309, and S-309A to S-309C in Steel Exhibits, pp. 659–666. made available to us. The second set of tables deals with data that has been supplied by United States Steel Corp. This material relates to relative earnings of the various subsidiaries of the corporation and is also related to the investment in those same subsidiaries. Now, I would be glad to proceed, but what I had intended to do was to summarize the material on these tables, and I had hoped they would be before you. The CHAIRMAN. I am informed that they will be ready in about 4 minutes. Mr. BOWMAN. I will be glad to give you my set. Mr. WILSON. Haven't you something that you can go on with in the meantime? Mr. BOWMAN. My statement consists of a summary of these tables. I have this one set. The CHAIRMAN. You and I, Mr. Wilson, will sit together and look at this set. Mr. BOWMAN. The first table is a summary of capacity and production of the principal product categories, pig iron, ingots, and finished products, finished steel products.1 Line 1 of that table deals with pig iron, and the first column shows the capacity in 1938, and then the production for the years 1939-40; and then the capacity figure for 1948 is shown, and I believe if I remember correctly, production for the years 1946-48. Both capacity and production were relatively lower for the United States Steel after the last war than before as compared with the rest of the industry. The percent of capacity in pig iron declined from 39.8 in 1938 to 37 percent in 1948. The percent of production by the United States Steel Corp. was more than 38 percent in both 1939 and 1940, and was 33.5 percent in 1946, which was a strike year, and was 35.9 in 1948, slightly down. On line 2, ingots, the relative position, percent of total capacity or total production, of the United States Steel Corp. was slightly lower in basic steel than in pig iron, both before and after the last war. This makes possible either less dependence than the rest of the industry on scrap in steel making, or availability of pig iron for sale to others. I believe Mr. Fairless testified when he was before the committee that the corporation did use less scrap in the making of steel than the rest of the industry. Second, the relative amount of steel ingot capacity in the corporation The CHAIRMAN. We have the tabulations now. Mr. BOWMAN. Yes. The relative amount of steel ingot capacity in the corporation was slightly less in 1948 than in 1938, the relative position declining from about 35.3 to 33 percent. In terms of relative production, however, comparing 1939 to 1940 with 1947 and 1948, the position is about the same, 33.4 and 34.3 percent in the prior period, and 33.7 and 33.1 in the later period. The next line, line 3, deals with finished steel products. The CHAIRMAN. Will you tell us a little bit more about the relative uses of scrap iron and ore? 1 This table is exhibit S-308 in Steel Exhibits, p. 659. |